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Monthly Archives: September 2010

The Bankability of PV Tech: The New Key to Success

A decidedly non-technical term was in vogue this week at the very technical 25th European Photovoltaic Solar Energy Conference (EUPVSEC). The term “bankability” was often used to describe the likelihood of success of a given technology. In these days of scarce capital, the only projects that will be funded are those that banks and insurers have deemed to be fund-worthy (outside of China anyway). “Banks demand extensive performance and reliability data before funding major installations,” noted one presenter from Applied Materials, claiming that this was “critical for market penetration of a new PV technology.” This particular presenter was discussing the merits of thin film PV tech, but crystalline PV suppliers were making similar arguments regarding the bankability of their own technology, which is arguably more proven and certainly more mainstream.

How this will play out is anybody’s guess, since long-term reliability is somewhat of a guessing game based on an extrapolation of models and limited field tests, particularly when it comes to new materials. Almost all PV module suppliers offer 20-25 year warranties but nobody really knows how panels will withstand the test of time. Corrosion can creep in, plastics can yellow, dopants can move and electromigration can lead to increases in line resistance. Many PV proponents believe solar farms being installed today will live on in perpetuity, since the world will always need power and the sun will always shine, but materials do tend to wear out.

Maybe bankers can intuit the viability of given technology better than expert physicists, but I suspect their questions of bankability will only be answered by reams and reams of data which they are ill-prepared to decipher.

3 Facts from EUPVSEC

The one and only driving factor in the photovoltaics industry is cost per Watt. This is primarily a function of efficiency – how much of the sun’s power is converted to electricity — and the cost of manufacturing and installation. The ultimate goal of course is to achieve grid parity, where the cost of producing power with PV is the same or better than that achieved by traditional means (coal, hydro, nuclear, natural gas, etc.). That’s Fact #1 (with the obvious exceptions of odd applications such as PV in outerspace and on ladies’ handbags).

Fact #2 is that today’s PV boon is artificially driven by feed in tariffs, tax incentives, politics, unlike “real” market boons such as high brightness LED lighting. It is ironic that the 25th European Photovoltaic Solar Energy Conference (EUPVSEC) is being held in Spain, which just recently renounced FiTs after accruing billions of euros of debt (too much subsidized PV was brought on-line too quickly).

Fact #2 is of little long term significance, however, since billions of dollars (and euros) are being spent to advance PV technology, ultimately bringing about grid parity. This creates a real market for PV and eliminates CO2 emissions, thereby saving the world.

Fact #3 is that China is dominating the photovoltaics manufacturing business. Companies in China are able to manufacture photovoltaics more cost effectively than anywhere in the world, and by all accounts are also implementing new technologies very quickly and effectively. Never mind that their costs are low because they are able to feed energy-hungry manufacturing operations with cheap CO2-belching coal-fired power plants. Surely the CO2 reductions in Europe made possible by PV more than offset the increase in CO2 from China!? No? Well, I said never mind.