First Solar Sets World Record and Hires an M&A Guy: Enough to Persuade the Street?

Heading into its 2Q 2011 earnings report this week, First Solar announced two pieces of news that may have an impact on its future, if not the past.

The company announced last week it set a new world record for cadmium-telluride (CdTe) photovoltaic (PV) solar cell efficiency at 17.3 percent.  The record was set using a test cell and was confirmed by the DOE’s National Renewable Energy Lab (NREL).  The previous record was 16.7 percent, set in 2001.

“This is a significant milestone that demonstrates the ongoing potential of our advanced thin-film technology,” said Dave Eaglesham, chief technology officer at First Solar in a press release. “This leap forward in R&D supports our efficiency roadmap for our production modules and will recalibrate industry expectations for the long-term efficiency potential of CdTe technology.”

The average efficiency of First Solar modules produced in the first quarter of 2011 was 11.7 percent, according to the company, up from 11.1 percent a year earlier.  First Solar has previously recorded full-module efficiencies over 13.5 percent, with a 13.4 percent module confirmed by NREL.

“First Solar’s innovation in both module technology and balance of systems engineering continues to drive us closer to grid parity,” said CEO Rob Gillette.
 
First Solar may lead in the CdTe thin film arena, but SunPower holds the title for silicon PV solar cells at 22.4 percent and Alta Devices' for gallium-arsenide (GaAs) thin film with efficiencies of 27.6 percent.
"The all-time winner," writes Jeanne Roberts in Energy Boom, "is likely Spire Semiconductor, which collaborated with NREL to produce a triple-junction solar cell with a 42.3-percent efficiency rating.   These ratings all represent how much sunlight (or the photons in sunlight) is converted to electricity."

It's also not the first record First Solar has set, according to Roberts, "In 2009, the company claimed it was manufacturing solar cells for $1 per watt, an industry milestone that represented the Holy Grail of solar cell costs, at least to fabricators."
 
Meanwhile, late last Friday came the news that First Solar hired Cory Steffek, a former investor at venture capital firm Altira Group, to help make strategic acquisitions and partnerships, a move that seems to hint at future M&A activity on the solar horizon.

FSLR will report earnings on Thursday after the close.  We'll see how the market reacts to their performance and whether these announcements of future potential will have any impact.


(Disclosure: I hold a long position in FSLR. This post is for informational purposes only and is neither intended to be investment advice nor an offer, or the solicitation of any offer, to buy or sell any securities.)

FiTs and Starts: Are Feed-in Tariffs Fit to Be Tried?

Image via Wikipedia

NREL, Golden, CO

With the death of Cap-and-Trade legislation in the Senate, Feed-in Tariffs (FiTs) are starting to become more and more attractive to renewable energy boosters.

But are FiTs all they are cracked up to be?

NREL, the National Renewable Energy Laboratory, recently released a A Policymaker's Guide to Feed-in Tariff Policy Design that largely sings the praises of various FiT schemes.

According to a Deutsche Bank study quoted in the NREL guide, 75 percent of global solar PV and 45 percent of wind development are directly related to FiT schemes. In the European Union alone, over the past ten years, FiTs have led to the deployment of 15,000 MW of solar PV and 55,000 MW of wind power.

The benefits of FiTs are obvious to the renewable energy (RE) industry, as NREL states, FiTs drive "market growth by providing developers long-term purchase agreements for the sale of electricity generated from RE sources. These purchase agreements, which aim to be both effective and cost-efficient, typically offer aspecified price for every kilowatt-hour (kWh) of electricity produced and are structured with contracts ranging from 10-25 years."

Furthermore, "payment level can be differentiated by technology type, project size, resource quality, and project location."

And therein lies the rub. FiTs do not a free market make: 1.) Fixing the price doesn't mean the best price for consumers or taxpayers and 2.) the government picks the technology, site or size of the project.

While you can't argue with success, we are already seeing that such success can lead to excess.

According to a renewable energy player familiar with a variety of country-based FiT policies, such schemes have led to an excess of solar development (viz. the German example) or prices that don't take into account future efficiencies and cost-savings, which can result in windfall profits for developers and manufacturers.

More of our focus needs to be on making renewables more efficient and cost-effective so they don't have to rely on government props and subsidies. The example of Spain should be a warning, where retroactive cuts to their FiT scheme due to the bad economy may endanger that country's solar industry and renewable production altogether.

Fixing prices and picking technologies shouldn't be the job of governments. I'm not saying that FiT schemes can't be properly designed to allow as free a market as possible, I just don't want to see us all go to Abilene yet again chasing the latest "Get FiT" fad.

 

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With Tesla IPO, Has the Age of Electric Vehicles Arrived?

Tesla Motors will have its IPO today. The Nissan LEAF electric vehicle sold out shortly after it was announced, many of the orders coming from first-time Nissan customers. The Chevy Volt may even hit the showroom later this year.

It certainly seems as if the age of the electric car is upon us. But hold on a minute. Let not all the hype keep us from seeing the speedbumps -- and maybe a few roadblocks in the way of a complete transition on our roadways.

Don't get me wrong, I believe the battery electric vehicle (or BEV for short) is the vehicle of the future. But this new generation of electric vehicles will have lots of challenges, including battery technology, range, and charging.

Let's take range. Today, we are used to driving 300 miles or so before having to pull into a gas station and, after inserting our credit card, choosing the grade, and popping the nozzle in the tank, we can be refueled and ready to go before we've had a chance to clean the windshield.

Contrast that with the currently planned charging experience for electric vehicles. Drive 100 miles and you need to charge it -- the LEAF will take 8 hours for a full charge at 200 volts -- and there is currently very little infrastructure to support electric vehicle charging.

You can get around this by increasing the number or density of batteries in a vehicle, which will add weight and cost, but as battery technology improves the weight and cost, life and range will increase.

Charging, however, still remains an issue. I'm concerned about the vision of the future that imagines hundreds of thousands of charging stations around the country, in cities, parking garages, and on-the-street parking (perhaps replacing the meters that have gone the way of the parking kiosk). That seems like an awful lot of infrastructure needing to be built.

And what about that volatile mix of bad weather and high voltage. Imagine the housewife, parking in the Whole Foods lot, plugging in while she goes in for groceries. She comes out, and some idiot parking next to her has dislodged the plug. Not only does she not have the charge she needs to go pick up Junior from day care, but now she's dealing with a live wire on a wet macadam. Doesn't sound like the way to go to me.

I've even seen plans for "battery replacement stations" where you drive in and your old battery is swapped out for a new one -- the batteries are on a huge circular conveyor. The Pep Boys, Manny, Moe, and Jack, are probably salivating at that prospect. But that doesn't seem feasible to me.

Which is why I was encouraged by this video from the UK-based HaloIPT of an alternative future featuring wireless, dynamic charging based upon inductive power transfer technology.



Momentum Dynamics, a Malvern, PA-based company I've written about before on this blog, also has a technology that may help advance the vision depicted above.

As Andy Daga, CEO of Momentum Dynamics said to me recently, the battery electric vehicle industry "Needs three things: improved battery technology (this is coming), improved vehicle integration of new technologies (also in the works), and finally, improvements in the technology and distribution of charging technology."

Of course, that is what Andy and his company are focused on, and which he feels "is absolutely critical to the industry."

I hope for the sake of the electric vehicle market that the Tesla IPO ($TSLA) goes well. I have concerns that, like $AONE, it will go from 0 to 60 and come to a screeching halt, like, well, a Tesla Roadster as it approaches a speed trap. (That won't be good for future cleantech IPOs -- some companies have already pulled their plans this year).

But I have larger concerns that we are ignoring the looming issues facing the electric vehicle industry that may well prevent it from going the distance.

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