As solar implementations increase in California, distributed generation gains a stronger hold, prompting the urgency of modernizing the electric grid. More solar systems have been deployed in the past 2.5 years than in the 50 years prior and are expected to double more over the next 2.5 years.
Richard Swanson, a consulting professor at Stanford University’s Precourt Institute for Energy (PIE) and the Founder and Former President and CTO at SunPower Corporation, shared at the GCEP symposium the lessons his team learned on the path from technology research to commercial markets. The Global Climate and Energy Project (GCEP) at Stanford University has focused the 2013 symposium on the application of latest clean energy and storage technologies economically, creating affordable low-carbon energy solutions in countries around the world. Thought leaders at the event talked about the transition from scientific centers, through technology launch, proof-of-concept, and eventual commercialization. To read more about GCEP, see Additional Information below.
Photovoltaic is a challenging technical sector, requiring a very large diode and expensive manufacturing processes. Technology efficiency plays a significant role in the search for practical solutions. Further, solar PV competes with an established fossil-fuel energy industry, which has the experience in electricity generation, scaling and infrastructure of over 100 years. At the same time, markets transform, user behavior changes, and technology advances. To go to mass market solar systems have to last twenty-plus years in an outdoor environment in various weather conditions.
Fundamentally, researchers and scientists face the challenge of moving from the laboratory environment into creating practical solutions. Further, discoveries need to be economically affordable in order to become viable solutions. Telling the story of SunPower and his teams' experiences, Swanson noted the following lessons they learned along the path to commercial success:
1. It takes a long time to establish a new energy technology; It requires significant capital investments.
Energy production technology takes a relatively long time to commercialize and requires intensive capital funding. In the past 3 decades, the investment in clean tech has been on a roller-coaster of ups and downs, with a positive outlook for 2013. In Q2 of 2013, pv-magazine.com indicated that a report of the venture capital (VC) investment in the photovoltaic industry showed investments were slightly improving, although funding remained at a low level.
Investments grew further in Q3: According to Mercom Capital, in its Q3 2013 Solar Funding and M&A Report, total corporate funding in the solar sector for the third quarter of this year was $2.18 billion, representing an increase of $1.27 billion from Q2 2013. The above figure includes venture capital, debt financing and other equity financing raised by public companies. Venture capital deals reached $207 million globally in the third quarter, showing an increase of $18 million from the previous quarter.
2. Keep things simple and be willing to pivot
Swanson said that although the original premise in developing practical photovoltaic cells in the 1970‘s was that efficiency was the key - a few years later it became clear that solutions needed to utilize a different approach: a concentrator technology. His team at SunPower was willing to pivot when prospects looked uneconomical and has focused in the 1980’s on developing concentrated PV technologies.
3. Recognize and embrace opportunities; Establish alliances.
Strategic relationships and partnerships are key due to the complex nature of the energy industry. Swanson talked about a remarkable opportunity presented to him in 1993: Honda sought his team’s solar technology and asked SunPower to build a high efficiency solar-cells system to power a Honda car. The vehicle came first in a car race across Australia, beating second place winner by one full day. Another SunPower technological success came in 1997 with NASA’s Pathfinder, an unmanned, remotely piloted, solar-powered, high altitude aircraft.
Several opportunities came along and you can read about SunPower Corporation history and the teams' achievements on the company website: http://us.sunpowercorp.com/about/history/
4. Know the market from experience
Team members need to have knowledge of the market from actual experience. Swanson described several Space-related projects that failed, making the company leaders realize they needed to get involved in markets they truly understood.
The cost of scaling up a new PV technology is huge and risky. The difference in cost among solutions is small. There is a big risk that the cost estimated will be different than what the future brings, especially in an ever evolving sector like solar. There are many stakeholders involved, adding to the complexity of developing and ‘doing’ business in this sector: from government agencies, regulation, manufacturing, suppliers, customers, utilities, grid modernization and more. At the bottom line, the biggest lesson is that it takes a long time to commercialize!
The Global Climate and Energy Project (GCEP) at Stanford University seeks new energy solutions to meet the changing needs of a growing world population in a way that protects the environment. GCEP mission is to conduct fundamental research on technologies that will permit the development of global energy systems with significantly lower greenhouse gas emissions. GCEP sponsors include several private corporations.
The organization develops and manages a portfolio of innovative energy research programs that could lead to technologies that are efficient, environmentally benign, and cost-effective when deployed on a large scale. GCEP supports projects at Stanford and in collaboration with leading institutions around the world.