Concentrated PV

The CPV sector has made significant strides in the first eight months or so of 2013. Be it for new efficiency records at both the cell and module-level, novel financing deals for construction of projects or showing signs of leaving the tag of a niche market, the industry is moving forward.

The CPV sector is making progress, with the market showing signs of developing from a niche market with a few MWs to a market for utility-scale solar power plants.

Soitec’s 44 MW project in Touwsrivier, South Africa exemplifies this trend. The power plant is under construction now. This development proves that the CPV industry is gaining momentum while at the same time – and like for all markets that get mature – there was market consolidation on the module and system supplier side.

“The high potential for efficiency increases makes CPV very attractive for markets with high DNI. We are constantly improving the efficiency of our CPV modules,” says Hansjörg Lerchenmüller, Senior VP Product Strategy, Solar Energy Business Unit, Soitec.

Overall, CPV system companies have been diligently pursuing improvements in certain areas to establish competitive attributes of this technology. If on one hand, the focus has been on securing of new projects and successful deployment of systems in the field; on the other entities have been targeting the efficiency quotient, which is a strong lever for cost reductions. The objective is to also significantly reduce material costs per system, and curtail installation costs.

Jeff Allen, vice president of business development, Solar Junction, refers to the following developments that stand out as for this year so far:

-Soitec securing the project and delivering against their 44 MW deployment in South Africa

-Continued deployment of CPV in large quantities in China by Suncore.

-New efficiency records at both the cell and module-level (Amonix) with continued expectation in the near-term to propel CPV to LCOE equivalence and likely advantage within the next 18 months.

It was in April this year when Soitec finalised its circa $110m solar financing bond to finance the construction of its CPV solar power plant in Touwsrivier, scheduled for completion by June 2014. This has been termed as the first publicly-listed project bond ever issued to finance a solar power plant based on CPV technology. In fact, the deal featuring Soitec is expected to pave the way for a new field of project funding to the solar industry in South Africa.

Referring to this project, Lerchenmüllersays, “Today Soitec CPV projects can already be financed like traditional infrastructure projects.”

Approaches to attractiveness

Allen says the industry has adopted several approaches to improve upon on its attractiveness.

He refers to following developments:

-Good warranty underwriting. In September, Soitec signed a performance-warranty insurance contract with Munich Re. This contract will cover all CPV modules manufactured by Soitec. This will result in a greater degree of business certainty, which will help entities to lock financing for projects based on Soitec’s CPV technology. 

-Partner with large strategic companies for a healthy balance sheet – as multiple parties are attempting to do now.

-Continued deployment at larger and larger scales.

-Publish performance track records of these deployment to demonstrate to the investor, financial community and developers that CPV is mature and competitive with other forms of energy production from fracking-generated natural gas to other renewable approaches.

CPV is very attractive due to the outstanding efficiency and the great potential for efficiency increases, emphasises Lerchenmüller. He adds that Soitec has a solid track record of CPV installations in 18 countries and is constantly monitoring their performances.

He adds, “The measurements show that Soitec CPV modules deliver high performance and show no significant degradation over the years. The high reliability of Soitec’s CPV technology is also reflected in the performance-warranty insurance contract recently signed with Munich Re, one of the world’s leading reinsurers. This contract will cover all CPV modules manufactured by Soitec. Investors will therefore benefit from a greater degree of business certainty.”

In addition, Soitec’s customers will have the option of directly taking out insurance policies for specific projects with Munich Re, allowing the projects to become direct beneficiaries of the insurance. Since this insurance contract provides additional risk protection, it may also allow banks and financing institutions to provide project financing at more attractive conditions.

Focusing on LCOE

Efficiency increase is a major lever to improve LCOE.

With increased efficiency, equipment costs, construction costs and O&M costs will be further reduced, simply because fewer CPV systems are needed to build up the same capacity.

Since the CPV market is gaining momentum, the economies-of-scale in volume manufacturing also helps to reduce the equipment costs significantly.

Allen points out that the cost of single-axis PV is “incredibly cheap” in comparison to just 24 months ago, therefore, multiple areas need maximum attention, these include:

-O&M

-Full module costs

-Ensuring that every photon going into the primary is delivered to the cell so that the cell can produce as many Watts as possible since the power produced impacts the entire solar farm – thereby reducing wiring, pedestals, modules, land etc.

Markets to focus on

As for which market suppliers should focus on for sales in 2014, Allen recommends China, Saudi Arabia, South Africa and Chile.

Lerchenmüllersaysthe majority of growth in the PV industry is about to shift from the traditional markets in Europe to sunnier regions around the globe. Soitec is targeting sunny regions with high DNI.

“The most attractive regions for CPV installations are the southwestern areas of the USA, parts of South America, Africa, the Middle East, Australia and China,” he says.

Next Frontier

Taking a call on how this industry can improve further, Allen believes that the next frontier for the CPV sector would be:

-Proven track record data to retire the technology risk premium that most financiers put on the system (thereby making the projects less competitive).

-Improved module-level cost and module optical throughput to the cell - the key LCOE drivers.