Load research data shows how utilities can levy a demand charge to recover costs fairly from residential customers with rooftop solar.
Chris O’Brien is no starry-eyed idealist. An engineer with an MBA, he began his career developing fossil-fired power plants for the AES Corp. But in the 1990s his career took a different turn, when he launched the Energy Star program for the U.S. Environmental Protection Agency. After that, he went into the solar energy business, and never has looked back.
Before joining Oerlikon Solar, O’Brien developed markets for photovoltaic (PV) modules in positions at BP and Sharp. From 2003 through 2008, he chaired the Solar Energy Industries Association (SEIA), the national trade group for solar equipment manufacturers. Now he’s working to build a network of PV-module manufacturers using Oerlikon’s cell-production lines.
To discuss the outlook for utility solar investments, Fortnightly met with O’Brien in his Washington, D.C., offices early this year, and followed up by telephone in March.
Fortnightly: What does Oerlikon do?
O’Brien: We’re a leading global supplier of thin-film PV technology. We’re headquartered in Switzerland, but we have customers around the world. We don’t produce PV modules, but we supply turnkey manufacturing plants to customers that produce modules. In contrast to more vertically integrated PV suppliers, our approach is different. We have 10 customers who are now in production or construction, representing nearly 600 MW of cumulative PV manufacturing capacity.
Fortnightly: Where do you place PV in its evolution as a power source? Is it still a niche solution or is it entering the mainstream?
O’Brien: Solar has a long history of promise, for some good reasons. It’s environmentally benign, and the resource is abundant, dwarfing other energy resources. The challenge has been that it was significantly more expensive than other technologies.
There’s been a significant reduction in cost for PV technology since the 1970s. The economics are beginning to converge. With some of the incentives currently in place in the United States today, solar projects deliver a reasonable return on investment for private investors.
SEIA has set a very ambitious goal for solar to deliver up to 12 percent of U.S. energy demand by 2020. Whether we achieve that or not, I expect the amount of solar generation will increase several-fold over the next decade. There are some challenges in the short- and mid-term. It will require some well-designed policies that both provide some incentive to end-use customers and also provide a level playing field between solar and conventional energy sources, in terms of their environmental impact and the time of day when they deliver energy.
Fortnightly: I know PV technologies have improved, in terms of efficiency and cost. Where do they stand today?
O’Brien: We guarantee to our customers that their plants will produce modules with an average efficiency exceeding 9 percent, which is a 50 percent improvement on typical thin-film PV modules.
We’re aggressively pursuing a plan to reduce costs from about $1,500 per kilowatt DC in 2008 to $700 in 2011 or 2012. For large-scale PV projects in sunny sites in the United States, that will allow modules