March 27, 2008
Solar Start-Up Expects Cost Competitive With Coal By 2012

A spin-off from MIT expects to achieve $1 per watt solar photovoltaic cells by 2012.

An MIT researcher has found a way to significantly improve the efficiently of an important type of silicon solar cells while keeping costs about the same. The technology is being commercialized by a startup in Lexington, MA, called 1366 Technologies, which today announced its first round of funding. Venture capitalists invested $12.4 million in the company.

1366 Technologies claims that it improves the efficiency--a measure of the electricity generated from a given amount of light--of multicrystalline silicon solar cells by 27 percent compared with conventional ones.

The company expects other improvements to combine to get it to its $1/watt goal by 2012.

They expect to achieve a 25% conversion efficiency of photonic energy into electricity.

MIT Professor, 1366 founder and CTO, Ely Sachs, noted that 1366 Technologies will be combining innovations in silicon cell architecture with manufacturing process improvements to bring multi-crystalline silicon solar cells to cost parity with coal-based electricity.

Sachs added, "The science is understood, the raw materials are abundant and the products work. All that is left to do is innovate in manufacturing and scale up volume production, and that's just what we intend to do." The company has just taken space in Lexington to build its pilot solar cell manufacturing facility.

1366 Technologies' roadmap includes a new cell architecture that uses innovative, low-cost fabrication methods to increase the efficiency of multi-crystalline solar cells. This architecture, developed at MIT, improves surface texture and metallization to enhance silicon solar cell efficiency by 25% (from 15 - 19%) while lowering costs.

1366 has some heavyweight competitors.

And what will happen if 1366ís claims pan out, and silicon-based solar cells really drop below $1 per watt within the next few years? If the costs for those cells, solar PV, drop more rapidly than expected, thin-film solar based on other materials could face more challenges than expected. However, companies that make thin-film cells like First Solar (NASDAQ: FSLR) and Nanosolar (coverage here) are working on their own process improvements, and itís difficult to tell when breakthroughs will come.

As of this writing First Solar (FSLR) has a market capitalization of almost $18 billion. So the markets think First Solar could be the winner. So will 1366 score an upset? Photovoltaics makers can raise the capital needed if they can just come up with plausible technologies for lowering photovoltaics costs.

Share |      Randall Parker, 2008 March 27 10:35 PM  Energy Solar

cancer_man said at March 27, 2008 11:03 PM:

But we are dooooooomed! Peak Oil in 2012!

Wolf-Dog said at March 28, 2008 12:18 AM:

The excellent news is that according to Nanosolar, it takes less than 12 months to finish building a complete solar electric power station, which is much faster than the coal and nuclear plants which can take many long years. Instead of small solar panels for buildings, the new companies like Nanosolar are building large panels intended for solar power stations. The rivals of this company are claiming that that solar panels will become competitive with coal by the end of 2009.

The reason this is important is because solar power would allow the existing coal fired plants to be used to charge electric cars at night.

David Govett said at March 28, 2008 9:30 AM:

Heard it for 30 years. Tell me when it's switched on.
Saudis can drop oil to under $10 per barrel and profit, at least for a few decades. No tweaking of technology can compete economically with that.

Boogaloo said at March 28, 2008 10:25 AM:

Solar thermal is a better bet right now than PV, since it matches peak demand far better than PV using inexpensive thermal storage methods. Give it 20 years, though, and PV's gonna kick coal out of the electric power business (with advanced large scale electrical storage).

No, David. The Saudis have to have high oil prices to keep the kingdom solvent, even if they do have enough oil to drive prices down.

Scott said at March 28, 2008 12:04 PM:

David makes a good point though....promises from a startup looking for investors is one thing, production is another thing entirely. When I see solar actually displacing coal, I will believe it. Until then it is simply wishful thinking, albeit wishful thinking I devoutly hope comes to pass.

Wolf-Dog said at March 28, 2008 12:22 PM:

Scott and David:

Nanosolar is already building actual power stations that are intended to scale up, not just for roofs. They are already building a small power station in Germany, but later on much larger stations will be built:

Wolf-Dog said at March 28, 2008 12:38 PM:

Addendum: There is also a 40 Megawatt solar power station built on a former military base in Germany, this time by using the thin film panels of First Solar.

It is only a matter of time until the solar panels become competitive with coal. Once the price is below $1 per watt, the trend will be established within a couple of years.

Randall Parker said at March 28, 2008 5:24 PM:

David Govett,

The Saudis would need to have another extra 10-20 million barrels per day of spare capacity to drive the prices of oil down a whole order of magnitude. Well, they do not have much spare capacity at all.

Ken said at March 28, 2008 6:37 PM:

With demand skyrocketing and supply flattening, oil is not going to come down in price (except for shortlived fluctuations), even with more output from current producers. Still, why would they increase output when prices are headed for the stratosphere? In the ground the value of reserves keeps going higher. Just where those profits get invested could be crucial - Middle East to Europe HDVC and big investments in solar thermal and PV could see Saudi Arabia and others profit from energy well past when the oil flow drops to a trickle. Coal probably has more room to come down in price but I suspect it won't be by upping production that it stifles the development of alternatives (it's happening anyway)- their considerable influence will be used to delay and dilute any legislative efforts re CO2 emissions, maintaining the apparent cost advantage they have. As long as the future, external costs of high emissions are kept off their books, their position is very strong. By buying out the upstart startups and failing to follow them through they could delay things even further. Even so there are some very promising solar technologies in the pipeline and the solar thermal ones will have the storage to even out the day/night fluctuations. Better if they invest in the upstarts and follow them through aggressively.

Ken said at March 28, 2008 6:40 PM:

Correction - that should have been HVDC (as in High Voltage Direct Current)!!

David Govett said at March 28, 2008 7:19 PM:

The quintupling of oil revenues over the past few years would enable the Saudis to give away their oil, at least long enough to drive out undercapitalized competitors. The few million Saudis have hundreds of billions of dollars in their many banks, enough to support SA for a decade without charging a penny for oil exports. America alone is importing about a billion dollars worth of oil every day, and not one of those dollars is going to a country that wishes the U.S. well.

Fat Man said at March 28, 2008 7:27 PM:

The $1/W is misleading. Without storage there is no solar electricity for more than half the time.

Randall Parker said at March 28, 2008 7:41 PM:

David Govett,

Your reasoning makes no sense. Why do the Saudis need to drive their competitors out of business? They already sell their oil at high prices. The prices keep going up because their competitors are either unable or unwilling to boost production even as Asian demand rises.

If the Saudis gave away their oil that would not lower the price of oil from other suppliers unless the Saudis produced far more oil than they are producing now. But they lack the ability to produce far more oil than they are producing now.

Randall Parker said at March 28, 2008 7:56 PM:

Fat Man,

Solar competes against more expensive day time electricity. Its availability isn't a perfect match with high prices since peak pricing comes in the late afternoon. But solar will compete against natural gas electricity even more than against coal. Natural gas has become expensive and will become much more expensive in coming years.

Also, solar is cheaper in sunnier climes. At $1/Watt the cost per kwh it will be very competitive in the US Southwest and up into the low cloud plains states. Southern California, Arizona, and Nevada will do well with solar electric during daytime hours.

Engineer-Poet said at March 28, 2008 7:56 PM:

Quoth Fat Man:

The $1/W is misleading.
Those in the know realize it means $1/W(peak), but the real impact is that energy-intensive tasks can be scheduled for daylight hours because power will be in greatest supply (and cheapest) then.

If large amounts of cheap PV became available, we'd do things like charge electric cars in the morning and schedule electric steel furnaces to run loads at 9 AM and 1 PM.  We wouldn't need natural-gas peaking plants for summer afternoons.  Tons of things would be different, and better.

Fat Man said at March 28, 2008 8:56 PM:

"energy-intensive tasks can be scheduled for daylight hours"

Spoken like a man who does not live where the most energy-intensive task is keeping the house warm on a -10 winter night.

"Solar competes against more expensive day time electricity. "

If Solar is only good for peaking, it cannot make a material contribution to solving the whole energy problem.

David Govett said at March 28, 2008 9:35 PM:

Re: "Why do the Saudis need to drive their competitors out of business? They already sell their oil at high prices."
Evidently you've never heard of monopolistic business practices. Why do you suppose Microsoft has targeted dozens of companies for extinction over the years? When you're the only one selling popsicles on a summer day, you set the price as high as customers will pay. Basic economics.

Randall Parker said at March 28, 2008 10:23 PM:

Fat Man,

E-P lives in one of the ice box states unless he's moved in the last few years.

Solar power that reduces natural gas usage for electric generation frees up more natural gas for heating.

David Govett,

Saudi Arabia won't drive competitors out of the oil industry for a few reasons:

1) The Saudis do not have enough oil to do it.

2) If they tried to do it they'd reduce their revenues.

3) If they even could drive out the competitors temporarily they couldn't then buy the oil fields of the competitors. The competitors are also mostly national governments. Those national governments won't sell out. As soon as the price of oil would go back up again the competitors would start producing again.

Monopoly only works if you can keep out competitors. Saudi Arabia can't establish a monopoly let alone defend one.

Brett Bellmore said at March 29, 2008 5:48 AM:

"Spoken like a man who does not live where the most energy-intensive task is keeping the house warm on a -10 winter night."

They sell this nifty electric furnace which heats a pile of bricks during off peak pricing, and heats your house by blowing air through the stack. Heat IS relatively cheap to store, for purposes like home heating.

Engineer-Poet said at March 29, 2008 7:18 AM:
Spoken like a man who does not live where the most energy-intensive task is keeping the house warm on a -10 winter night.
Am there (SE Michigan), do that.  State-of-the-art insulation and thermal mass practically eliminates that difficulty, and cogenerating furnaces can help a great deal for those buildings which can't be brought up to those specs right away.
If Solar is only good for peaking, it cannot make a material contribution to solving the whole energy problem.
Two errors in that:
  • Solar isn't only good for peaking; the fact that sunny-day output tracks the demand curve fairly closely is a bonus.
  • Anything which can generate enough watt-hours can make a material contribution.  Wind is up to 0.6% of US electric generation as of 2006, and is doubling about every 2 years.  500 GW of PV at $1/watt would supply roughly half of peak demand, and create markets for electric vehicles and ice-storage A/C for DSM and price arbitrage.
Innovation Catalyst said at April 1, 2008 8:43 AM:

Regarding storage - some states are 'net metering' which gives you credit for the excess solar energy you produce during the day by letting you use it at night. For a house or building in a net metering state, the model might be to size your system to produce 24 hours worth of energy during the day, and draw upon the day excess you produced at night.

Regarding $1/W - to me, why it's misleading is it doesn't include the cost of inverter, switch, etc that make up the whole system. I've seen those costs at $3-5 per watt for small home systems.

Engineer-Poet said at April 6, 2008 7:39 AM:

There's no great difference between an inverter and a switching power supply.  Computer power supplies sell for less than 10¢/W.  The difference is the manufacturing volume; if we start buying inverters in quantitites of 1/household or even 1 per small number of panels, the price will come way down.

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