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Why Scaling the Solar Market Depends on Solar Technology Companies

This article was originally published in EnerG Magazine.

The solar power industry has set some ambitious goals for the coming years, and a number of initiatives are helping to move solar power forward, despite the challenging situation of COVID-19. It is helpful to look at some of the major factors driving the industry and some of the challenges that need to be overcome.

Distributed energy generation is key to enabling growth in global renewable energy consumption and an important opportunity to provide energy access to over one billion people who still do not have access to electricity.

Solar energy availability is ubiquitous and unbiased across the globe. And, the prices of renewable energy and batteries have been on a steady downward trajectory for decades now, outpacing analyst expectations. That means that – unlike capital intensive central power plants – generating energy at or close to the point of consumption will enable new populations to be served cost-effectively, reducing energy poverty and unshackling economic potential.

Access to energy stimulates local business opportunities, leading to newer and stickier energy consumption models, as well as improved living conditions and better livelihoods. Through these mechanisms, the renewable energy industry has the potential to lift the economic fortunes of developing countries.

Another positive outcome of local generation and on-site consumption of renewables is distribution efficiency; this reduces the cost of grid modernization, cuts transmission losses and in developing countries mitigates energy theft. All of these factors are leading to improved economics for renewable energy and resulting growth in the industry.

Solar companies can help with the transition to renewables

Technology advancement is key to successful adoption of renewable energy, and engineering and materials improvements have been a critical factor in driving prices in a continuous downward trajectory. According to the Solar Energy Industries Association (SEIA), the cost of installed solar has dropped by 70% in the last decade.

Solar technology companies are in the best position to lead this transition. The main providers are companies that supply modules, different types of racking, energy harvesting and conversion equipment, evacuation and grid-integration equipment and the sensors and software that monitor the production of solar plants.

An integrated and collaborative business and technical ecosystem is also essential to keep driving the solar transition forward. Key relationships between various members of this ecosystem – including developers, researchers, EPCs, supply chain experts, manufacturers, logistics managers and consumers – will help power its ongoing evolution.

Another critical factor in the momentum of the solar business is that deployment of large renewable energy power plants will be the fastest way to scale the industry. For example, solar accounted for 37% all new electric generating capacity added in the U.S. in the first half of 2020, but while residential and commercial solar growth have been stalled by the COVID epidemic, utility-scale solar has proved to be more resilient, accounting for 71% of new solar capacity coming online in Q2 of 2020.

IN 2018, utility-scale solar accounted for 60% of market share, and until the middle of this new decade, the utility sector is expected to continue leading the renewable energy market with similar growth rates. According to projections by Wood McKenzie, the U.S. solar market is expected to install 100 GW between now and 2025, a 42% increase over the next five years.

Another key projection is that in 2020 is that solar energy is expected to bypass wind on a cumulative installed basis.

New technology leads to new cost efficiencies

The solar industry cannot achieve its projected scale unless new cost efficiencies continue to be introduced into the ecosystem. At the same time, as the industry grows, costs do go down, creating important economies of scale. In the case of solar, all the necessary ingredients for a solar plant, starting from modules onwards, have seen significant manufacturing efficiencies in recent years, leading to lower costs.

Also, many solar companies have invested in LEAN construction practices to address the labor side of project costs, namely the assembly and construction of solar plants.  Derived from superior Japanese auto production systems, lean construction drives labor costs down and improves return on investment (ROI) through superior management and greater productivity.

Newer technologies such as cleaning robots have also improved Operations & Maintenance (O&M), leading to better upkeep of solar facilities and higher energy production.

Meanwhile sophisticated AI platforms are finding their way into distributed energy management, helping to drive production up while ensuring safety, especially during extreme weather events.

One key limitation in the renewable energy industry thus far has been the variability of solar and wind resources. The thinking has been that since solar is not dispatchable, or “firm,” it can’t be a reliable component of a power portfolio, at least not reliable enough to entirely replace fossil generation.

Now we are seeing the elimination of that last barrier to the solar industry. The availability of improved energy-storage technologies and a rapid decline in battery prices like the trajectory of solar modules themselves, is helping to “firm” solar power. Low cost batteries are paving the way for 24/7 dispatchable renewable energy, and it is the ultimate game changer.

All these interdependencies are evolving together to drive scale and improve the Levelized Cost of Energy (LCOE), or the lifetime cost of distributed renewable energy, leading to quicker adoption.

Voyager: A cost-efficient next-generation single axis tracker

On the equipment side, an example of technology advancement in the industry is FTC Solar’s Voyager, a next generation, single-axis tracker that requires fewer posts/modules, less DC cabling, and enables industry-leading installation processes, driving the lowest total installed cost.  

Voyager’s single row, double portrait (2P) architecture enables optimized performance for bifacial modules and allows the optimization of available land, while maintaining suitable accessibility for O&M in high Ground Coverage Ratio (GCR) designs. FTC Solar provides a proprietary controller system with Voyager, enabling granular controls with row-level backtracking capabilities. As a result, Voyager delivers among the best LCOE in the industry.

SunDAT PV software facilitates design of utility-scale projects

Meanwhile, FTC Solar’s SunDAT PV design software enables rapid, partially automated design, engineering and cost analysis of utility-scale and C&I projects. The software complements the Voyager tracker, and along with engineering services, provides a complete package of necessary tools for solar customers, with superior engineering and  competitive costs.

This versatile tool facilitates rapid generation and analysis of hundreds of options for a potential site. SunDAT integrates with PV Bid and SunFig to include project cost estimation and project financial returns, enabling users to perform a complete economic optimization of their projects.

Starting with only a ground or rooftop boundary, SunDAT can model virtually every combination of design parameter: module/inverter types, ground coverage ratio, string size, tracking vs. fixed-tilt, azimuth, and more, producing complete site layouts and energy estimates in minutes.

Combined with the power of PV Bid, each design configuration can be analyzed financially and compared, providing direct visibility into project economics. With the ability to connect technical site design, energy estimation, and cost, SunDat users can quickly see which option produces the best LCOE, IRR, and NPV

Government incentives have played a large role in getting us to where we are today in the solar industry. But, with PV technology getting less expensive and more efficient all the time, the more important role for governments to play now would be to establish challenging renewable energy goals and see to it that they are met.

With advances such as these, and many others developed by business and government, the solar industry can look forward to meeting ambitious goals—and powering the U.S. to a cleaner energy future.

Nagendra Cherukupalli is Chief Technology Officer at FTC Solar (www.ftcsolar.com). Trained as a computer science professional, he has worked extensively in software, semiconductor, solar, and energy platforms.

Nagendra Cherukupalli

Nagendra Cherukupalli is Chief Technology Officer at FTC Solar. Trained as a computer science professional, he has worked extensively in software, semiconductor, solar, and energy platforms.

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