By Bill Scanlon, NREL
To catapult America to the global lead in solar manufacturing, the U.S. Department of Energy is turning to small start-ups with the kind of disruptive technology that has the potential to lower costs dramatically.
The stale and the satisfied need not apply for the $1 million to $4 million subcontracts awarded through an aggressive photovoltaics (PV) incubator program prodding entrepreneurs to help the United States reach the DOE’s SunShot Initiative goal of lowering the cost of utility-scale installations by about 75% to roughly $1 per watt by 2017.
But those with truly disruptive technologies that can greatly change solar-power economics, will find eager, albeit stern, partners in the PV Incubator program, an initiative of the DOE executed through its National Renewable Energy Laboratory.
By "disruptive" or "differentiated" technologies, scientists or business people are referring to new ways of doing things that overturn the traditional methods and practices, such as the steam engine in the age of sail or e-mail in the age of post-office mail.
The DOE has provided $50 million to small businesses under the PV Technology Incubator program, which started in 2007. The businesses in turn have created more than 1,000 jobs in the United States and have the potential to raise solar-energy capacity in the United States from hundreds of megawatts to thousands of megawatts.
To date, 20 small businesses have been awarded PV Technology Incubator subcontracts, with DOE’s Solar Energy Technologies Program investing about $3 million per company.
The returns on taxpayer dollars have been amazing, said NREL’s Martha Symko-Davies, the architect behind the PV Incubator program. The private sector subsequently has invested nearly $2 billion in the companies selected for the PV Incubator program, she said.
"It is even more impressive considering the recent difficult economic times faced by venture capitalists, making them much more selective about funding start-ups," she said. The $2 billion "provides clear evidence of the commercial value of these differentiated PV technologies."
The project represents a significant partnering with U.S. industry to help speed commercialization of PV research and development in the United States to meet the goals of the DOE SunShot Initiative.
"The object is to scale up capacity from prototypes to pilot scale in just 18 months," Symko-Davies said. "We target hard deliverables, firm-fixed price subcontracting. We want to make sure taxpayer money is well-utilized."
Prove Your Concepts or Get Shown the Door
The program works because the companies are pushed hard, Symko-Davies said.
If the companies don’t pass a Stage Gate review conducted nine months in, they’re dropped, they don’t get the remaining half of the subcontract dollars and that money is put back into the pot for the next year’s recruits. That happened to three of the 10 companies selected in the first round in 2007. For others, milestones are rewritten or tightened.
President Obama in his State of the Union Address of Jan. 25 set a goal of 80% clean energy by 2035. A key milestone in the minds of the DOE and the White House is to lower the installed cost of a photovoltaic system to $1 per watt by 2017.
If the installed cost of solar energy can plunge from $3 to $1 in six years, it likely will mean hundreds of thousands of new American jobs and lift the United States to global leadership in both solar innovation and solar manufacturing.
The $3 million or so awarded to the chosen companies often leverages much more, in terms of venture-capital dollars and federal loan guarantees.
The program has helped hatch companies such as Abound Solar of Longmont, Colo., which parlayed a $3 million PV Incubator subcontract and a simpler way to make cadmium-telluride solar cells into a manufacturing process that attracted several times that amount in venture capital money and a $400 million federal loan guaranty. The company expects to employ more than 1,000 when its plants in Colorado and Indiana are at full capacity.
And there’s CaliSolar, which attracted venture capital interest after NREL helped it work out the kinks in a process that allows it to use far less expensive silicon in its manufacturing process. CaliSolar now counts its employees in the hundreds and plans to greatly expand manufacturing capacity.
PV Incubator alumnus Solopower, which has a breakthrough electrochemistry process to fabricate copper-indium-gallium-selenide cells at a fraction of the typical cost, recently received a $200 million federal loan guarantee.
Low-Cost, Efficiency Attract Interest from Utilities
The PV Incubator program spun off from DOE’s Solar America Initiative, which provided money and expertise to some of the larger American companies.
DOE officials told Symko-Davies that they wanted to encourage game-changing innovations among small start-ups, but wanted to make sure the money was leveraged and spent on the most promising ventures.
Besides the financial resource, the companies get access to the facilities and expertise at NREL, which has been researching solar energy since 1977.
Setting Tough Goals Inspires Harder Work
Early on, NREL helps the companies write a statement of work with tough, specific goals, such as raising the efficiency of their cells to 15% or cutting manufacturing costs in half.
"We hold them to the plan. If you said you’re going to produce a cell with 15% efficiency by this date, you had better get it done," Symko-Davies said. NREL has the best testing facilities and experts to make sure that these companies are successful in meeting their aggressive goals.
"Initially, these companies are very unhappy with Martha, because they think the goals are too aggressive," Mowafak Al-Jassim, an NREL scientist who works with some of the companies, said. "But almost universally, they come back and say, ‘you guys pushed us so hard. Without you we wouldn’t have accomplished what we did.’"
Symko-Davies and her team of four oversee the program, but at least three or four NREL researchers are brought in to help each company–growing the size of the operation, reducing capital expenses, scaling up the efficiencies. "We’re in your face," Symko-Davies said. "If you don’t want to accept NREL as your partner, don’t apply. But we’ll help enable U.S. manufacturing quickly and reliably."
From Concept to Prototype; from Prototype to Pilot Production
Some of the money goes to companies that already have a prototype and need to lift it to a pilot-scale operation. And some of the money goes to companies that only have a concept but want to turn it into a prototype.
The start-ups’ proposals are reviewed by an external committee. The most promising ideas warrant a site visit.
"We’re looking to verify what they put in their proposals," Symko-Davies said. "Do they actually have a prototype? Sometimes there’s a tendency to boost up the proposal. How are they going to get from point A to Z?"
NREL helps the companies overcome R&D hurdles quickly. If a company has a breakthrough technology, but its super-thin wafer keeps bowing or can’t make contact with the substrate, NREL experts can help them toward a solution.
Symko-Davies said she is optimistic about the future of solar energy in the United States, "If we do it right, there are companies that can actually make this happen."
She points to PV Incubator graduate Innovalight, which invented a liquid form of silicon, Silicon Ink, which uses an ink-jet approach to depositing layers on solar cells. The innovation dramatically improves the performance of solar cells and can boost profits for a typical American manufacturer by 20%. Five of the world’s leading solar cell producers have signed licenses to use Silicon Ink in their production lines.
Grants Make the Difference in a Tight Lending Environment
The free-flowing venture capital of a few years ago has dried up.
Four or five years ago, "If you could spell the word ‘solar’ venture capitalists would give you money," Al-Jassim said. No more.
Today, the $3 million from the PV Incubator program is huge.
Abound, Solopower, and CaliSolar are prime examples of what America needs: startups that can make high-efficient solar cells in a non-labor-intensive way so America can compete with China and other countries in the manufacturing arena, say the NREL scientists involved in the PV Incubator program.
The PV Incubator program wouldn’t likely touch a company that proposes to make regular silicon solar cells, for example, because established companies already manufacturing these materials are trying to reduce costs. But if a company has a way to use a fraction of the usual amount of silicon, or simplify the manufacturing process, or use only abundant materials, then it can be a part of a growth-boom in good-paying U.S. clean energy jobs.
Testing Outside-the-Box Technologies at NREL
The companies make trips to NREL in Golden, Colo., or send samples to NREL’s Process Development Integration Laboratory which has huge bays devoted to different approaches to, or different materials for, making solar cells.
"We work on specific obstacles," Al-Jassim said. "We have sophisticated techniques, especially in measurement, that these guys couldn’t afford. We are their seeing-eye dogs. If this cell works, but that cell doesn’t, we can tell them why that is the case. We provide the intellectual guidance on why the product isn’t working up to par. We show them how they can tweak it."
The companies also take advantage of NREL’s state-of-the-art testing facilities, such as the Outdoor Test Facility and the Thermal Test Facility. Quality and reliability are huge issues. The NREL testing instruments can simulate the lifetime of a product by exposing it to several hundred suns of infrared, but not, ultraviolet, light. That way, they know in a few months whether they can give their product a five-year or 10-year or 50-year warranty. It gives them and their potential investors confidence that this is a bona fide product that will hold up over the years.
NREL’s Keith Emery, who is the manager of the Cell and Modular Performance team, oversees the testing of the PV Incubator technologies.
Without the PV Incubator program, "there would be no place where well-thought-out innovative ideas could be funded," Emery said. "We look for innovative ideas that aren’t ready for prime time, that aren’t ready for current manufacturing and are a little too high-risk for the venture capital community."
"Almost every successful solar program started at this level, with subcontracts at NREL."
NREL, which announced last month the four companies selected in the fourth round of the PV Incubator program, continues to look only for the most promising cost-cutters and efficiency-enhancers.
"Unless it has the potential of dramatically reducing cost, we’re not touching them," Symko-Davies said. "You’ve got to be doing something that is a game-changer. The ship is sailing. Are you going to be on the ship?"
Learn more about the PV Incubator program at NREL at the link below.
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