Inventions in Solar Industry

The solar industry is seeing new applications and innovation by industry veterans as the industry grows out of its infancy stage. The industry is already reaching an annual revenue target of $100 billion, which makes it a fairly large one. For example the semiconductor industry is of $250 billion size, while the electronics industry is estimated to be $1 trillion. The industry is now becoming more standardized as it moves up the maturity curve. This is making new applications and innovations targeting efficiency and cost improvements quite lucrative. Note solar industry has always seen a lot of money being invested into new applications and products. But this was during the infancy stage when the industry had not come around a common technology and platform. Now the industry is pretty much centered around the crystalline silicon technology, with even thin film rock star First Solar buying this technology. Other forms such as solar thermal and CPV have become fringe technologies.

New startups have started sprouting up in unexpected areas such as automation of system installation and cleaning solar panels. Note giant solar panel farms have millions of panels installed covering hundreds of acres. Cleaning up the massive solar panel installations is time consuming and costly work for human workers. Now a startup called Alion Energy is automating this tedious repetitive task, with the help of robots. Not only will this technology help in reducing the time, but also the costs involved in installing the systems and maintaining them. Note system installation costs have now become equal to, if not bigger than the solar equipment costs. Relentless cost cutting and competition have drastically reduced the prices of solar panels, which have now become less than 50% of the total system costs. Even solar inverter prices have also gone down. But the BOS costs of installing, permitting and developing have remained high. Though mature markets such as Germany have dramatically reduced the prices of system installation, USA and Japan lag far behind.

Solar manufacturing has recently seen the pace of innovation decline as most companies were fighting to survive rather than look to invest in newer fancier technology. However, cost has continued to come down with process and productivity improvements. Some startups continue to invest in disruptive technologies such as 1366 Technologies (making direct wafers without ingots and wafering). Many of the thin film startups have shut down or sold themselves for pennies. However, companies which are investing in improving efficiency and reducing costs of silicon crystalline technology have flourished. I think that the best PE and VC investment in solar will be those which help improve the crystalline silicon technology without spending huge amounts of capex. An asset light technology focused strategy will be the best one for solar startups. Getting into manufacturing will probably land you in bankruptcy like Solyndra or Nanosolar.