With the federal investment and production tax credits in limbo, the move to push solar technology toward grid parity is going into overdrive. Investors are getting antsy about the December 2008 expiration dates and the lengthy development period that the hard material science of solar requires. So when will this actually come to pass?
“10 cents in 2010 — we’ve got to be there,” said Eugenia Corrales, VP of engineering at SolFocus, referring to 10 cents per kilowatt/hour, which is considered a goal for solar power. Corrales’ remarks were made at the solar technology-themed SDForum and Astia’s cleantech breakfast series Tuesday morning. “There’ll be some thin-film, some concentrator, maybe some traditional silicon crystal,” she added. “I think 2010, 2011 we’ll start to see cross-over.”
Annie Hazlehurst, an analyst at Draper Fisher Jurvetson, was slightly less optimistic, estimating that utility-scale solar will hit the 10 cent point in five years.
Jason Matlof, a partner at Battery Ventures, was far more bearish, citing the prospects of huge new quantities of polysilicon coming out of China. While new polysilicon capacity is coming online, he estimates that prices will only drop 5 percent per year, nowhere near the 50 percent reduction many say is necessary to push solar toward grid parity. “I don’t think costs are actually going to come down,” Matlof concluded flatly.
Kieran Drain, president and CEO of NanoGram, concurred. “I think it’s the right target; I don’t know if we’ll get there in time. There will be innovation but I think the wafer industry will struggle.” Drain expects it will be electronics giants like Sharp and Samsung that will push costs down. Sharp has been very quiet about their work in thin film, Drain explained, adding that as Samsung retargets their LCD manufacturing facilities we could see some serious price reductions in manufacturing.
“If you’re a banker you’ve got to ask yourself why Suntech and Sunpower and Q-Cells, with their immense equity, aren’t buying these solar startups,” Matlof added. “If that doesn’t happen, I think we are screwed. We need those ecosystems of big acquirers,” he told a chuckling and nodding audience.
Between electronics companies looking to buy up intellectual capital and utilities needing to expand their renewables portfolios, it looks like solar acquisitions will serve to inject more capital into the sector over the next several years.