By David Biello
(Click here for original article.)
Entrepreneur is just a fancy French word for a salesman, and a sales pitch isn't necessarily constrained by the laws of physics or economics. These folks don't so much have a business as an argument -- or a business proposition as the cliche goes. Chris Gronet, the founder of Gronet Industries which became Solyndra and, more recently, defunct, was one such entrepreneur who visited the offices of Scientific American in the fall of 2008.
Much as Gronet's business alma mater Applied Materials has learned to perfect technological processes such as thermal processing at high speed, this entrepreneur had learned to perfect his rapid patter -- and to leave nothing out of place, whether the perfectly parted hair that remained undisturbed by the palpable downdraft of the ventilation system or the thank you e-mail sent the day after the meeting. Like most good, green entrepreneurs, he took a dash of optimism about the bright, clean future for solar energy and paired it with a dose of reality about continuing high prices for the purified silicon at the core of a photovoltaic (PV) device.
He also had a slogan -- "the new shape of solar" -- that encapsulated the idea, much as a cylinder of glass encapsulated the thin-film semiconducting material that made Gronet's solar tubes work. The shape even fed into the name -- Solyndra -- as well as promising half the installation cost in one third of the time, enabling "grid parity" (that is, a price competitive with electricity from fossil fuel–fired power plants) at some imminent date for the first time in the history of solar power. In the meantime, with feed-in tariffs in Germany and Spain as high as 44 euro cents per kilowatt-hour, "we do great," Gronet said.
But wait, there's more. On roofs that didn't line up with the sun's path across the sky, the cylindrical nature of the solar module allowed owners to get more power off the roof by capturing diffuse or reflected light. The panels did not require heavy racks that anchored deep in the roof for support but rather lay flat and spaced out to allow wind to flow through them, allowing them to withstand gusts up to 210 kilometers per hour as demonstrated during a test installation in Florida that survived a tropical storm. That also allowed more of the panels to fit on any given roof. "By covering the 30 billion square feet of large, flat roofs in the U.S. alone, Solyndra's new design has the ability to meaningfully impact the world's energy needs," Gronet wrote in that thank-you email. "Conventional flat PV solar panels are not optimized for large commercial rooftops."
German photovoltaic installers such as Munich-based Phoenix Solar AG loved the cylindrical devices, committing $615 million to purchase some of them. "We simply do not need any supporting structures or ballasts or roof penetrations," Phoenix's chief technology officer, Manfred Bachler, explained in 2008. "We see significant cost-savings."
But Solyndra was always a dicey technology proposition: Take a temperamental semiconducting film that must be perfectly applied at high speed and pair it with a shape that is both hard to manufacture and ship. Voila: a cylindrical solar cell that could either be a game-changer or a money-loser. "Some claims do not sound true," said environmental engineer Vasilis Fthenakis, a senior scientist at Brookhaven National Laboratory's National Photovoltaics Environmental Research Center, in 2008.
The Price of Power
As Mark Pinto, Applied Material's executive vice president for energy and environmental solutions, told me in the spring of 2009, "with solar, it's all about cost." And that was the promise of thin films, Solyndra's or otherwise. Simply put, by employing less expensive semiconducting material thin-film solar cells would be cheaper to make, a fact born out by thin-film solar manufacturer First Solar's world-beating module that costs 73 cents per watt in 2011, albeit before the expense of installing it on the roof. "Three to four dollars per watt installed is the magic number," Pinto said.
Solyndra employed a semiconducting substance known as CIGS (copper indium gallium diselenide), the layered materials that allow electrons to flow in a very thin film. In the lab, such combinations turned as much as 20 percent of sunlight into electricity, although panels produced in a factory under less than ideal lab conditions only managed 13 percent at best -- and Solyndra's averaged around 10 percent. For comparison, a conventional photovoltaic cell made of crystalline silicon turns nearly 20 percent of incoming photons to electricity, and lasts much longer because it is not as susceptible to corrosion by water vapor.
But in 2008 purified silicon or polysilicon -- the sine qua non of silicon solar panels -- retailed for as much as $450 per kilogram. The U.S. Department of Energy (DoE), Solyndra and even independent analysts such as Lux Research anticipated that prices would not ease for years as demand continued to grow. "Lux Research's comprehensive risk-weighting of 133 polysilicon construction projects finds that polysilicon constraints will last into 2010," the research firm wrote in a March 2008 press release.
That meant silicon solar cells, which comprised more than 80 percent of the global market for solar power, would not be cheap. "We're trying to compete with conventional sources of electricity with no subsidies," says Henry Kelly, assistant secretary for the DoE's Office of Energy Efficiency and Renewable Energy. "That means getting the price of solar down to around 6 cents per kilowatt-hour."
Therefore, thin-film solar cells seemed bright with promise, so bright that the DoE made Solyndra's effort to build a new 28,000-square-meter plant to manufacture the cylindrical modules the recipient of the first-ever loan guarantee for a renewable energy project -- $535 million. Gronet shook hands with President Barack Obama on May 26, 2010, and led him on a tour of the federally enabled factory. The DoE expected Solyndra's fabrication plant to produce as much as 7 gigawatts worth of the innovative solar cells in its lifetime, churning out 110 megawatts annually. "The true engine of economic growth will always be companies like Solyndra," Obama said on that occasion. "Government still has the responsibility to help create the conditions in which students can gain an education so they can work at Solyndra, and entrepreneurs can get financing so they can start a company, and new industries can take hold."
Instead, Solyndra produced only 500,000 panels before shuttering, a fraction of the promised potential. Nevertheless, Solyndra still stands by its technology and lays the blame elsewhere for its failure in the marketplace. "We believe that thin film was a great solution for the rooftop, and our ability to hermetically seal it in glass was a good way to ensure that you could use a CIGS material and not run into degradation with exposure to air or water," says Solyndra spokesman David Miller. "The pricing of polysilicon panels certainly was a big issue and the rapid drop in price."
The Cost of Power
Polysilicon has sold for as little as $50 per kilogram in recent months, part of an 89 percent drop in price in the past few years. The building block of silicon solar cells has dropped so much in price that the venerable solar technology actually increased its share of the solar market over thin films in 2010, now accounting for nearly 90 percent of the photovoltaic market at a cost of roughly $1.20 per watt, not including installation. Solyndra simply couldn't compete at a cost of more than $3 per watt, according to papers the company filed with the U.S. Securities and Exchange Commission.
U.S. companies are largely to blame. GT Advanced Technologies, Hemlock Semiconductor and REC Solar all produce vast quantities of solar-grade silicon and other ingredients for PV devices. That has led to the U.S. being a net exporter of solar-energy products, nearly $2 billion worth in 2010 (including a positive trade balance with China in solar). "It's refined rock but it's still very much a high-tech product," says Frank van Mierlo, co-founder and CEO of 1366 Technologies. "Even the Chinese, when they build it, they build it with American technology."
And the U.S. may yet do more: 1366 is working on a machine roughly the size of a dishwasher that will convert molten pure silicon directly into wafers for photovoltaics, rather than employing the process of sawing wafers from purified silicon logs as is commonly done today. "We [can] do in one step and 25 seconds what today takes the better part of a week and multiple steps," van Mierlo notes. The 1366 process of directly growing wafers also ends up doubling the effective use of a given piece of silicon.
Of course, China helped Solyndra's demise as well, pumping money into silicon solar panel–makers such as Suntech and Trina Solar. In 2010 alone Trina produced one gigawatt worth of silicon solar panels. Much like U.S. companies: "the goal is to achieve grid parity," Trina spokesman Jeffrey Fan said during a visit to the company's Beijing offices in 2010. "This industry is very policy driven," whether that policy be rich feed-in tariffs in Germany or subsidies for manufacturers in China.
In essence, China has been loaning Chinese solar module manufacturers in that country money at low-interest rates for both production and installation, even when installation takes place in other countries such as Germany, which makes Chinese products unbeatably cheap when paired with Chinese advantages in labor and logistics costs. "The cost of financing for U.S. and [European Union] production accounts for one third of the cost per kilowatt-hour," Fthenakis notes. In other words, easy financing makes China-made solar cells much cheaper than those from manufacturers who must pay interest on any money borrowed to build factories or install modules. "I would have more confidence in the U.S. solar industry if we take China to the [World Trade Organization] and slow down the unfair competition," Fthenakis adds.
In fact, U.S. Trade Representative Ron Kirk filed a complaint to the World Trade Organization on October 7 concerning roughly 200 subsidies that China has failed to report over the last five years, including to solar companies. According to Bloomberg New Energy Finance, the Chinese government in various forms has offered to loan solar companies like JA Solar, LDK Solar and Yingli Solar more than $30 billion in the past few years, although only a fraction of that money has actually been borrowed. "It is a challenge for companies [like Solyndra] to compete with that," Solyndra's Miller adds, because the U.S. does not provide as much financial support for its solar companies.
"China in particular has been a lot more aggressive" in its support of solar and other renewable energy technologies, DoE's Kelly notes. "They've figured out that clean-energy manufacturing will be an area of major growth and are investing vastly more than we are to support it."
In comparison, the U.S. spends roughly $1 billion a day importing oil. Diverting 10 percent of that money to supporting the solar industry would instantly put the U.S. ahead of China in terms of industrial support. "To walk away from what is one of the most promising areas of the future is insane," van Mierlo argues. "We have to compete. It would be profoundly un-American not to compete."
A better bet than Solyndra with CIGS technology may not be cylinders but rather more flexible arrangements, like a solar carpet being developed by Solopower with another DoE loan guarantee or PV shingles, such as those developed by Dow. "Twenty years from now, solar panels will be completely different. Our job is to enable that," says Ramamoorthy Ramesh, director of DoE's SunShot Initiative, a bid to make solar power as cheap as electricity from burning fossil fuels. "Worldwide, this is a market that will likely be worth trillions over the next four decades."
That means winning some and losing some when it comes to government investment, like Solyndra. Technology aside, the problem highlighted by Solyndra may be the temptation to put good money after bad in a bid to rescue a looming failure for political reasons, but that's hardly scientific. In 2010, before Solyndra failed, Gronet was replaced as CEO by Brian Harrison, because of the latter's background in perfecting manufacturing processes. Solyndra didn't need to sell itself as much as it needed to make massive amounts of solar cells -- and cheaply.
In the end Harrison's efforts weren't enough to save an idea that Gronet had while studying semiconductor processing and pondering less expensive ways to install solar panels. Gronet never shed his shares in his idea, nor the company it spawned in 2005. Of course, bankruptcy is no mark of shame in either Silicon Valley or the solar industry, where ideas can fail for any number of reasons, including the so-called "Valley of Death" between venture capital funding and a revenue stream from commercial sales.
In fact, Gronet failed only in a narrow sense. Solyndra turned out to be an answer to a problem that no longer exists: expensive silicon solar panels. That means Solyndra's bankruptcy is actually good news, like Gronet promised -- electricity derived from sunshine is getting cheaper. "Today, PV is about 18 cents per kilowatt-hour at the utility scale, without subsidies," says Ramesh of SunShot, which will bid to make solar electricity cost-competitive with coal and other fossil fuels on a budget that is less than 20 percent of Solyndra's loan guarantee. The falling price of highly refined sand may have doomed Solyndra, but it may also help fulfill the promise of solar power.
"The spill in the Gulf [of Mexico], which is just heartbreaking, only underscores the necessity of seeking alternative fuel sources," Obama said at Solyndra's facility in Fremont, Calif., as oil spewed from BP's blown out Macondo well. "It's the right thing to do for our environment, it's the right thing to do for our national security, but it's also the right thing to do for our economy."