Dr. Peter Borden, a Distinguished Member of the Technical Staff with the Solar Business Group of Applied Materials, recently shared several insights from his history in solar power. Long involved professionally with solar power, Dr. Borden has installed a SunPower solar system and a flash water heater at his home to facilitate an end-user perspective for his work”
Flat Panels Have the First Form Factor Advantage.
Dr. Borden observed that an industry’s first technology often produces the prevailing form factor to be adopted. There is a scaling curve and a familiarity throughout the supply chain that arises from the first technology. Given that the first solar cells were flat panels, Dr. Borden believes that the future will belong to flat panel solar cells. Unless there is a quantum leap in technology, like the jet engine to the propeller, flat panels will rule. Other technologies will have an uphill battle because flat panels are so entrenched with this first form factor advantage.
Established Companies Have Inherent Competitive Advantages.
Applied Material’s entry into the solar business is a natural, synergistic outgrowth of its existing businesses and domain expertise. Applied can leverage its expertise in semiconductors and thin film in both flat panel solar cells and thin film solar technologies. The solar cell business is not dramatically different from Applied’s existing business; it’s merely an application of its core technology into a different market/segment. Applied has an annual R&D budget of $1.2 billion, which is more than the capital budget of the entire solar cell business. This financial strength allows Applied to pursue areas for improvement that are beyond the capabilities of smaller companies. Similarly, since General Electric makes turbines, the wind turbine power business is a natural outgrowth of its existing business. Companies like Applied Materials with their existing technology bases, large R&D budgets, and established service and support have a competitive advantage over smaller businesses in markets that are scaling to large volume, such as PV.
Flat Panels Have a Track Record of Dependability.
The proven reliability of existing flat panel technology creates another barrier for entry into new solar technologies. Solar panels must survive harsh outdoor conditions for 25 years. Silicon panels are already proven over that period of time. First Solar, for example, worked for a decade to establish the reliability of its cadmium telluride panels. Dr. Borden believes that proving reliability of a new solar power technology to the market is a stiff challenge, especially if the design is significantly different from proven flat panels.
Installation is a Big Opportunity.
Currently, about 40% of the cost of a solar system is in the panels and 60% is in installation and other costs. Dr. Borden believes that a big financial opportunity is in creating greater efficiencies in installation. Germany, for example has figured out the formula: there, 70% of the cost of solar systems is in the panels and 30% in installation and other costs. In the US, the process is very inefficient. Each solar installation is custom, requires local permits which require engineering drawings, and needs union electricians and other contractors. Dr. Borden observes that we can’t outsource installation and ship houses to India or China to have this done at a lower cost or higher savings.
Thin Film’s Market Share Will Increase.
Currently 93% of the market is for wafer-based silicon flat panels and 7% is for thin films. Dr. Borden predicts that the use of thin film technology will grow as it develops more reliability, as prices drop and as the business scales. He predicts that it will become 20% of the market by 2011.
Renewable Energy Will Enjoy 50 Years of Consistent Growth.
Dr. Borden believes that the future is very bright for solar power. If you study the adoption rate of every major type of energy it takes 40-50 years for an energy source to increase from 1% of total usage to its peak usage. Renewable energy, particularly solar and wind, would provide lifetime careers for anyone starting a career now. It is a growing market which incorporates many academic and professional disciplines, including electrical engineering, physics, mechanical engineering, and aeronautics.
Because of the urgency of global warming and increasing energy prices, Dr. Borden believes that the adoption of renewable energy technologies show strong growth. Also, since energy has become a national security issue, Dr. Borden expects that a national energy policy will ultimately help drive adoption.
The Solar Era Has Just Begun.
Photovoltaics currently provide only 0.04% of global energy, and are produced at the rate of about two gigawatts a year, the equivalent of two nuclear or 10 coal fired power plants.
“To really be depressing,” says Dr. Borden, “this is roughly the equivalent of new Chinese coal fired power plants in production for a month.”
Product Panache Could Help Drive Adoption.
Cost-per-watt is not the issue. The largest market is the home. Unfortunately, rooftop solar panels lack curb appeal. There are two reasons a consumer pays $10-20K for something like a solar array: He has to or he gets something out of it. Dr. Borden believes that the main impediment to faster adoption is that no one wants to spend money on something you want to hide. Better product design could put some panache into flat panels. For example, Google has designed pleasing solar-powered car ports at its main campus.
Dr. Borden suggests that California could issue carpool lane permits to everyone with a solar system as an inducement and to give early adopters social status.
The Economics Will Get More Compelling.
The fact that homes with solar systems enjoy higher home values will help speed adoption. The tiered-rate structure in California, which makes electricity more expensive for large homes that are energy hogs, will help drive adoption because solar is cost effective for these consumers. There is a good payback for photovoltaic systems
Government Will Be a Prime Mover.
Dr. Borden is optimistic that Congress will pass a long-term extension of the 30-percent federal solar investment tax credit and it will be signed into law by the President. Both want to have some visible accomplishment in this area. Congress is also considering whether to eliminate the $2,000 cap on the tax credit for residential systems. This would allow homeowners to claim the full 30-percent credit and would be a significant boost to residential solar installations. Federal, state and local government will also become big consumers of renewable energy. The Department of Defense is considering purchase $2 billion of photovoltaic systems.
Storage May be the Next Big Thing.
Dr. Borden believes that energy storage could be the next big opportunity. Easy, reliable energy storage could enable a fleet of plug-in hybrid automobiles. There is enough excess power generation in the US to charge a fleet of 180 to 190 million plug-in hybrids. You could charge these cars at night using off-peak power and plug in these cars at work where they could serve as a source of extra energy for the grid – an idea being promoted by PG&E.
Done right, it should be much more convenient to recharge a plug-in hybrid than visiting a gas station.
About Dr. Borden
Dr. Borden joined Applied Materials in 2003 with its acquisition of Boxer Cross, Inc., which he co-founded and led as CTO to develop, market and sell metrology systems for VLSI process control. Previously, he served as vice president and co-founder of High Yield Technology, where he pioneered the first commercially successful in situ particle monitoring systems for VLSI process equipment. Earlier, Dr. Borden worked for Varian Associates where he led the Photovoltaics Group, working on III-V and silicon concentrator cells and systems.
Dr. Borden holds Ph.D. and MS degrees in Applied Physics from Stanford and BS degrees in Physics and EE from MIT, where he graduated Phi Beta Kappa. Dr. Borden is the author of over 80 publications in the fields of photovoltaics, silicon and III-V devices and processing, and VLSI process monitoring, and has over 30 patents.