News Article

CPV Market Is Tipped For Take-off

The concentrated photovoltaics industry should deliver massive growth over the next few years, according to market analyst Carlos Márquez from CPV Today. But this success requires recent installations to demonstrate that this technology can generate electricity reliably, while offering investors a good return on their money. Richard Stevenson reports.


For many people the recent economic downturn will be the toughest that they have ever lived through. While it may not have been as bad as the depression of the 1930s, when thousands and thousands queued on the streets for hours for food, many people have lost their job, seen the value of their investments plummet and are now facing a reduction in the services provided by their government, which is squeezing its belt.

It’s not just individuals that have suffered over the last few years. Industry has also taken a battering, with the lack of available capital hitting the emerging technology sector hard. This includes the concentrated photovoltaics (CPV) sector, a fledgling industry that was widely tipped to take off in the days before the phrase “credit crunch" had been coined.

The lack of capital available to CPV start-ups has hampered their efforts to promote themselves; accelerate their research and development; and expand their manufacturing capacity. It has also been a contributing factor to acquisitions, such as that of Sol3G, which has gone under the wing on Abengoa Solar. In addition, capital constraints have led to postponement of some installations, including the world’s biggest CPV deployment, a 154 MW project in Mildura, Australia. This was caused by a Chinese investor withdrawing funding from Solar Systems.

However, some of the CPV system builders have made progress over the last few years. Carlos Márquez, an analyst at CPV Today, points outs that Concentrix scaled up in 2008, which was right in the middle of the whole credit storm. And at the start of this year Amonix announced that it aimed to increase its annual production capacity from 30 MW to 100 MW per annum. By the end of this year this US outfit may well have topped that figure, because this July it also signed a lease on a manufacturing facility in North Las Vegas, Nevada, creating nearly 300 jobs and the opportunity to add a further 150 MW of production capacity. Márquez believes that this hike in capacity will pay dividends, allowing Amonix to attain economies of scale.

 



Concentrix Solar GmbH, a spin-off of Fraunhofer Institute for Solar Energy Systems, was founded in 2005 and is located in Freiburg, Germany. It expanded its production capacity in 2008, and is now actively pursuing a development of a 50 MW utility-scale power plant in the Western Cape, South Africa. Credit: Concentrix

 

It’s not just the likes of Amonix that have a positive view of the future. Despite concerns over double-dipped recessions and very slow recovery rates, investors are showing an increasing interest in CPV technology. Deployment of these systems is also on the up, and Márquez calculates that there has been more than 70 MW of new project announcements scheduled for 2010.

By far the biggest of these is a 59 MW installation in Taiwan that will be undertaken by Guascor Fotfin and Ya- Fei Green Energy. Once completed, this will be the largest CPV installation in the world. There have also been announcements of 1 MW projects by Concentrix Solar, Sol Focus and Opel, which will lead to CPV deployments in Questa, New Mexico, Victorville, California, and Portugal.

Looking further ahead, Márquez is tipping the industry for tremendous growth over the next few years, estimating that installations could approach 1 GW by 2016. However, he openly admits that there is a high degree of uncertainty in that headline figure.

Crunch time


Márquez believes that the future of CPV rests on the outcome of projects currently being deployed, which typically range in size from several hundred kilowatts to one megawatt. “These projects will set the track record for CPV. I think that the market will take off in terms of revenue if companies can prove that those projects have been successful; were built on-time, on-budget; produce an amount of electricity that they were meant to produce; and that they made investors a decent return."

It is possible that the CPV market could top the 1 GW mark by 2016 because Márquez has only considered deployments of grid-connected solar farms with an output of at least 500 kW. There are also opportunities for CPV systems to provide power for either companies, or for rural communities that are not connected to their nation’s electrical infrastructure. “Those installations require smaller capital costs, which makes them a good way for companies to get started and upgrade their technology," says Márquez.

If Márquez’s prediction for a tremendous ramp in CPV system deployment happens, it should not put undue strain on this industry. That’s because a good supply chain has fallen into place over the last few years. The vast majority of firms involved in CPV are specializing in one area, such as the manufacture of solar cells, the building of modules, or the construction of solar systems. “The only company that I am aware of that is completely integrated is Emcore," says Márquez.

Cell multiplication


One of the key components in every CPV system is the triple-junction solar cell. According to Márquez, no concerns have been reported regarding the reliability or performance of these cells, which are typically used with light concentration factors of 500. The thermal load on the cell is preventing progression to even higher concentrations, which promise a cut in electrical generation costs. However, there are ongoing efforts at improving thermal management, including research at IBM.

CPV system manufacturers now have far more sources for obtaining their triple junction cells. For many years the choice was between two US suppliers, Emcore and Spectrolab, and the European photovoltaic manufacturer Azur Space Solar Power. Now the likes of Cyrium Technologies, Spire Semiconductor, Solar Junction, Microlink Devices, Arima and Sharp can be added to this growing list, which will soon be strengthened by III-V stalwarts RF Micro Devices and JDSU.

Márquez is adamant that increased competition will be good for the CPV industry. A couple of years ago there were fears that cell production would fail to keep pace with a sharp increase in demand for CPV systems. “With the new entrants I don’t think that there is a chance that there is either going to be a shortage, or a situation where a few suppliers control the market."

 



Sol Focus is winning contracts for larger and larger CPV deployments. In 2008 it completed a 200 kW installation in Puertollano, Castilla-La Mancha, Spain, and this year it finished a 1 MW facility in Victor Valley College in Victorville, California. While many CPV system manufacturers use Fresnel lenses to focus the sun’s rays, Sol Focus prefers to use mirrors for this purpose. Credit: Sol Focus

Triple-junction solar cell costs should fall thanks to greater competition between their manufacturers. In turn, this should help to reduce system costs, but it will not make a huge impact. To really drive down the cost of CPV systems requires a significant cut in the cost of the tracker, which is the most expensive component.

The high cost of these trackers, which tend to be a dual axis design, stems from the level of engineering employed to create an incredibly precise tool for focusing the light onto the cell. What’s needed, according to Márquez, is the introduction of “clever optics" that will cut costs by allowing tracking systems to be less precise without compromising performance; easier and cheaper to manufacture; and easier to repair and maintain.

Lenses or mirrors?


The tracker adjusts the angle of the modules that contain either mirrors or Fresnel lenses for focusing light onto the cells. Of these two technologies, the latter is becoming increasingly popular. “It is tried and tested. It does the job, and there is a good supply of lenses," says Márquez.

A choice of lenses will help to reduce the CPV systems’ cost, which can be measured in several ways. Calculating the cost-per-Watt is a very common approach throughout the solar industry, but one that Márquez dislikes, because it ignores the lifetime of the system.

“The lifetime cost of the system is more important than the cost-per-Watt installed," argues Márquez. In his opinion, a system that is more expensive on a cost-per-Watt basis but produces more electricity and lasts for 40 years is likely to yield more profit than a cheaper system that fails after 20 years. “The cost of energy is probably a more useful metric."

On that basis, a CPV system already offers the cheapest way to generate electricity in some parts of the world. On islands such as Hawaii most of the electricity is currently produced by diesel generators, a relatively expensive way to generate power.

Most people don’t live in such remote locations, however burning coal produces most of the electricity consumed by humanity. Today this electricity generating process is significantly cheaper than that associated with CPV systems, but this margin does not have to be eliminated to make the greener technology an attractive option for some companies. That’s because the utilities have to make a profit. If a company can install a CPV system on its grounds, and the cost of the electricity produced is comparable to the price it pays the utility, then it may decide to invest in this technology.



This summer Amonix completed its 240 kW CPV system deployment at the River Mountains Water Treatment Facility, Nevada. Recent efforts by this company also include a substantial expansion to its manufacturing capacity. Credit: Amonix.

 

It is expected that there will come a time when CPV reaches grid parity in most places. Márquez expects that to take four to five years, by which time the generating costs of a typical CPV system will be around $0.08/kWhr.

As electricity generating costs for CPV systems fall and deployment rockets, many of the 35 or so system manufacturers in this sector will flourish. But it will probably not be a wonderful time for all. “In the solar industry in general there seems to be a trend for larger, more established companies acquiring smaller companies with specialist technologies," says Márquez. “I think we will see that happening in CPV as well."

Carlos Márquez is the author of The Concentrated Photovoltaics Industry Report 2010. See www.cpvtoday.com/cpv-report
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