The Race

EcoWorld - Upward Trend Who will be the first to manufacture truly cost-competitive Photovoltaic cells?

In a small lab in sunny Inglewood, California, EcoWorld has discovered Dr. Vijay Kapur, who for 29 years has been at the forefront of research and development of photovoltaics. Formerly Director of Research for Arco Solar, with a PHD in Chemistry, Kapur’s current venture is International Solar Electric Technology, Inc.

Investors take note, when we caught up with Dr. Kapur, he was in the lab working on systems which he says are ready for deployment and only require an infusion of capital. He believes he his patented “copper indium gallium selenide” technology can yield photovoltaic panels that will produce electricity at a production cost of $.60 per watt. If he was to sell these to distributors for $1.20 per watt, that would still be nearly 70% cheaper than anything currently available, since present day prices hover around $4.00 per watt to distributors.

ISET PV Mini-Module

For a long, long time, environmentalists and solar power enthusiasts were telling us that the price of electricity generated by fossil fueled power plants would keep rising and the cost of electricity from photovoltaics would continue to fall, and that the day would come when PVs could economically compete with fossil fuels. That day has been a long time coming indeed. “Even ten years ago, $4.00 per watt modules were unthinkable,” said Kapur, “wireless and space communication systems have driven demand way up and advanced the technology for PVs.”

Bringing the cost down far enough to help faciliate the revolution in satellite communications was the first leap forward for PVs, but the next one, bringing the cost down enough to compete with your local utility is an even greater leap. Before going further, how does the cost per watt translate to cost per kilowatt hour?

First of all, recognize that the cost of the PV panels is only about half the cost to install a working system. The complete costs must include the power converter, grounding, panel support structures, and installation costs. Therefore the true cost, currently, for PV systems is about $10 per watt. A simplistic but helpful formula to turn this into cost per kilowatt hour requires the following steps:

(1) Convert $10 per watt to $10,000 per kilowatt, and assume a 1 kilowatt system.

(2) Figure an average of 6 hours of full sun per day for 25 years. This means your system will generate 54,750 kilowatts during its lifetime. ( 25 years x 365 days/year x 6 hours/day = 54,750 hours )

(3) This means a $10 per watt system will produce electricity for $.18 per kilowatt hour ( $10,000 / 54,750 = $.18 ), BEFORE factoring installation and subsystem costs. That should roughly double the price, meaning that photovoltaic power currently costs about $.35 per kilowatt hour.

On this basis, today’s price for photovoltaics makes them nonviable for commercial power generation when they have to compete head-to-head with power utilities burning fossil fuels, at least in a normal market. Costs per kilowatt hour from conventional sources, notwithstanding peak costs and price spikes brought on by temporary bottlenecks in the system, are about $.10 per kilowatt hour, less than a third the cost of PV systems.

If the costs for photovoltaic panels to the consumer comes down to around $1.50 per watt, and subsystem costs don’t also fall, PVs will still have a hard time being competitive. But subsystem costs will drop, especially inverters (power converters) which are benefitting from increasing demand not only for use with photovoltaics but also with fuel cells and windmills. Moreover, “volume and standardization will lower costs to install systems, current prices are $1.00 or more per watt for installation, which is ridiculous,” said Kapur.

“Costs of around $2.00 to $2.50 per watt for delivered systems are feasible,” said Kapur, which would translate to a cost to the consumer per kilowatt hour of about $.07. When this happens, the idea of an energy crisis could be a thing of the past.

Who will win the race to build dramatically cheaper photovoltaics? Will it be Vijay Kapur at ISET Inc.?

According to the directory in the “PV Power Resource Site,” there are 97 companies in the world manufacturing photovoltaic panels. The true number of organizations involved in this effort, when including companies that are pre-manufacturing, and research labs, is undoubtedly much higher. The race is on. The stakes are high.

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