SolAero: Mastering Vertical Integration
Acquisitions and investment enhance SolAero’s capabilities in solar power technologies for satellites.
BY RICHARD STEVENSON
Within our industry, several firms are vertically integrated. They include: Sony, a maker of GaN lasers that are used in its BluRay players; Samsung, a producer of LEDs that are incorporated into its TVs; and Infinera, a leading player within the optical communications market that produces systems based on photonic integrated circuits.
These three outfits were always vertically integrated. But that’s not the only path that can be taken – there are some companies that started off as chipmakers, and have now diversified. They include Cree, a pioneer of the LED that now manufacturers light bulbs; and SolAero, a firm formed in late 2014 through the sale of Emcore’s solar power business, that has recently expanded its capabilities through acquisitions and investment.
It is easy to label any firm operating within the compound semiconductor industry as either vertically integrated or not – and even judge them on this basis. But that’s folly. What matters is how successful a company is. If it is vertically integrated, its performance will hinge on how well its parts fit together, and how the resultant entity can support the market it serves.
In today’s satellite and aerospace market, there is a good case to be made for vertical integration. “With a change in focus from the traditional, large GEO telecom satellites to lower orbit constellations manufactured in high volume, vertical integration gives us an opportunity to realize economies of scale that will benefit our customers," explains SolAero President and CEO, Brad Clevenger.
Through three acquisitions, capability has extended from the production of solar cells that sport state-of-the-art efficiencies to initially the manufacture of solar panels and finally satellite structures. “That’s been important for us to go out and attack some of the opportunities in the industry," claims Clevenger, arguing that winning business can be harder when capabilities are narrower, as collaboration with other firms is then needed, possibly including coordination with prime contractors.
SolAero Technologies provided panel technology for OATK’s Cygnus OA-7 mission, which launched on 18 April 2017. For the OA-7 mission, Orbital ATK used the Enhanced Cygnus Pressurized Cargo Module (PCM) to deliver cargo to the International Space Station.
SolAero’s vertical integration originated in 2001 with the acquisition of the assets of TecStar, the US’ first supplier of space solar cells. Back then, Emcore had been making space solar cells for just four years. Following that acquisition, Emcore’s space solar power business grew to be one of the largest in the world, providing more than 300 kW of space solar power annually to satellite manufacturers around the globe.
The next big step came in the Spring of 2015 with the acquisition of Alliance Spacesystems, a maker of composite structures – these are the lightweight, carbon fibre-based frames used to build solar systems. According to Clevenger, that acquisition gave SolAero an edge over its peers that still exists today: “We are the only supplier in the world that can deliver, to customers, a satellite solar panel 100 percent integrated in house."
The acquisition of Alliance enabled SolAero to enter new markets. Since then, it has been able to draw on Alliance’s very strong track record in servicing the biggest, most complex satellites in the industry, such as Lockheed A2100s and Boeing high-power and medium-power 702 satellites. But that’s not all. At the time of the acquisition, about 20 percent of Alliance’s business came from sales of solar panel substrates, some of which were sent to SolAero, where the cells were integrated. Now all of this can be carried out by one company, in one location.
SolAero strengthened its business again in May 2016 via the acquisition of Vanguard Space Technologies. Although this firm also had experience building over 70 large satellite structures, the majority of its business came from its engineering expertise. This had been used to provide the likes of an instrument deck for a Mars Rover, stable optical structures, and over 100 satellite antennae reflectors. Armed with these capabilities, SolAero has enhanced the end-to-end design and manufacturing services that it can offer to its customers.
The most recent move at SolAero has been a $10 million investment at its headquarters in Albuquerque, NM. This is being used to construct a 40,000 ft2 manufacturing facility, primarily to supply solar panels for OneWeb, which has the ambitious goal of producing two-to-three satellites per day. To avoid moving parts around the country for the OneWeb contract, the technologies and knowhow at sites formerly owned by Alliance and Vanguard are being adopted in the new facility. “We can streamline the manufacturing of solar panels in a way that I don’t know any other company in the world has the capability to do today," says Clevenger.
Investment in the headquarters, while retaining expertise at its sites in California, will help SolAero compete in both the traditional GEO telecom and emerging satellite markets. It is a challenging environment, so companies in this sector must evolve their business models, including considering acquisitions. “We have our eyes to the horizon, but we have a lot of work on our plates."
It’s not easy to know if the owners of SolAero, Veritas Capital, are enjoying a good return on their investment because financial information is not disclosed. But, the signs are good, with major contracts being won and headcount increasing. “We were 250," says Clevenger. “We’re now 375, and with OneWeb we expect that to climb – certainly over 400, but perhaps to 450 when we’re in full production."
While SolAero’s shift toward greater levels of integration has increased its technology portfolio, the most complex part remains that with which it first began – the multi-junction solar cell. Over the years, production volumes have mushroomed, which risks driving the cell toward commodity status. “It may be a fancy component, but it’s a component," says Clevenger. “What customer’s need, especially at the satellite level, is solutions which is why we have made the strategic moves that we have."
Despite this shift of emphasis, SolAero still prides itself on the quality and the performance of the multi-junction device. “The solar cell is still the biggest knob to manage and improve the performance of the solar array," explains Clevenger.
SolAero’s headquarters are in Albuquerque, New Mexico.
To improve performance, the company has commercialized an inverted metamorphic (IMM) device architecture. This trims weight by 30 percent and delivers a substantial increase in efficiency. “Production-scale sales that we are making right now – first generation IMM – are 32 percent efficient, which is about 10 percent higher relative efficiency than what state of the practice is in satellite power today."
There are many benefits associated with this gain in efficiency. For a given power requirement, a panel can be smaller, making it lighter, more compact and cheaper to launch. What’s more, its reduction in size and weight can benefit the dynamics of the satellite.
The IMM cell is relatively mature, with more than 30,000 produced, and adoption for multiple flights. However, SolAero is only half-way through qualification by the American Institute of Aeronautics and Astronautics (AIAA) standards. It could take up to another 9 months or so to win approval.
Clevenger points out that the lengthy qualification period has applied the brakes to the pace of advancement in solar cell technology, in an industry that has beome more conservative over the last 20 years. Back in the late 1990s, when Emcore broke new-ground with the launch of the first dual junction cell, the company released a new technology every 18 months and now it takes that long for qualification.
“You should only develop at no more than about half that pace – about every 3 years – or you’ll never realise any return on your R&D investment, because you’ll be parasitic towards you own last product," explains Clevenger. This means that it could be many years before the six-junction cell demonstrated by SolAero enters production.
An emerging, promising market for the company is that of providing solar power for unmanned aerial vehicles (UAVs). For this application cells need to bend to the shape of the wing, but that’s not a problem. “Frankly, we have products that can bend around a pencil," says Clevenger, adding that devices developed for space can provide efficiencies of above 30 percent in high-altitude conditions.
Clevenger is willing to accept that the company’s multi-junction cells might not be the best devices for some forms of UAV: “Some UAVs have a tremendous wing area, which means that high efficiency solar cells are not necessarily the right solution." But he points out that with smaller UVAs, typically requiring 100 W or less, SolAero’s cells are ideal for excelling in two key areas: watts-per-kilogram and watt-per-square-metre. “We have some great partnerships on-going, and in just the past three months we have done two outstanding demonstrations of electric power of UAVs with our products.
The solar cell market for UAVs could be huge, but it presents challenges, including the supply of materials and products. “We saw that in concentrating photovoltaics, where a lot of people were worried by germanium wafer supply," says Clevenger, who is now witnessing similar concerns in the UAV sector. In his view, if sales are to take off, the whole supply chain must work hard to reduce costs, as this will hold the key to enabling the technology to flourish competitive market. An unanticipated benefit of SolAero’s steps to greater vertical integration is that its capabilities in carbon composites are an asset in the UAV industry. “We are making aircraft parts, whether it be a fuselage or a wing," says Clevenger. “We are able to integrate the solar process, which we believe will set us apart in our capability to service the UAV industry."
Given this state of affairs, it is clear that there are many benefits associated with the mastering of vertical integration. Some of these are clear at the outset, while others emerge as new opportunities arise.
Test launch of the Silent Falcon. It has SolAero UAV-tunnel-junction solar cells integrated onto its wings.