Concentrated PV

Utilities are still wary of putting their cash into concentrated PV projects while crystalline silicon remains a cheaper and perhaps safer bet.

By Jason Deign

Last year’s PV Insider CPV World Map listed 35 operational high concentration PV plants in the US, plus 10 further pre-operational installations. Not bad for an emerging technology. 

Zoom in to the detail, however, and very few of the installations listed were of real utility dimensions… and even fewer actually had much to do with utilities. Amonix, a market leader in the CPV space with 10 projects, for example, only has a handful of power company developments. 

These include the Clark Generating Station run by NV Energy in Las Vegas; the Hatch plant belonging to NextEra Energy Resources in New Mexico; and the 30MW Alamosa Solar Generating Plant, operated by Cogentrix Energy for Excel Energy.

SolFocus had even more projects, but nothing much above 1MW in scale. What has happened since last year? The CPV project pipeline has stagnated and manufacturers, including SolFocus, are battling for survival.

The source of the malaise is well known: cheap crystalline-silicon panels knocked CPV’s levelised cost of electricity (LCOE) advantage for six a couple of years ago, leaving companies flailing in a bid to scale up manufacturing capacity while simultaneously running out of capital. 

The list of CPV companies that have failed since 2009 includes SV Solar, Energy Innovations, GreenVolts, Skyline Solar and Concentrator Optics. Among those remaining there is still a firm belief that CPV has something to offer utilities, however. 

High DNI

The case for CPV is particularly strong in regions with high direct normal irradiance (DNI), says Vahan Garboushian, founder and chief technology officer at Amonix.

“Utilities group CPV with PV, with CPV providing the added benefit of a better generation profile than silicon-based technologies due to CPV’s two-axis tracking and far lower power degradation in high-temperature environments,” he states.

“Price matters most, and here CPV competes well today in high DNI areas, delivering world-leading efficiencies, allowing the use of less land and less water, all while generating more power per unit of capacity.”

To prove the point, Garboushian remembers that the US National Renewable Energy Laboratory not long ago verified an Amonix module as having 36.2% instantaneous efficiency and 34.9% average efficiency, a world record he says is double the level of other technologies.   

Unfortunately, however, Ed Cahill, an associate with Lux Research, thinks it will take more than headline-grabbing efficiency stats to convince electric company customers of the value of CPV. “US utilities are generally still wary of all PV,” he believes. 

“Most utilities prefer to purchase power from PV plants, as opposed to owning PV plants themselves, through a power purchase agreement.” 

Solar investments

Using power purchase agreements (PPAs) may not allow utilities to profit from solar investments, but on the other hand it is a way of satisfying state renewable portfolio standards without risking a bet on a particular technology. 

Cahill: “While utilities may sign more favourable PPAs based on the technology, for example concentrating solar thermal with energy storage, for the most part demand for PV and CPV comes from project developers which build, own and operate installations.”

This perhaps means CPV companies need to be wooing project developers instead of utilities in the US. Even there, though, they could have an uphill battle for as long as crystalline silicon beats them on LCOE. 

“Project developers focus on the lowest LCOE, which has resulted in significant PV installations, over 3GW in the US in 2012, and very few CPV installations; less than 10MW in the US in 2012,” says Cahill. 

“If CPV were to lower costs and achieve a LCOE competitive with PV, CPV’s dual-axis trackers enable more power production later in the day, which is more valuable to utilities. Still, it is not valuable enough to warrant a higher LCOE.”

Manufacturing scale

This, then, is the challenge for CPV in a nutshell. For all its efficiency, it has yet to achieve a manufacturing scale that will allow it to outgun crystalline silicon in terms of LCOE. And that means utilities and project developers will not be too inclined to give it a second thought—as yet. 

As MJ Shiao, senior solar analyst with GTM Research, sums up: “Utilities are generally technology agnostic when it comes to solar, and are looking for the lowest bankable LCOE; not a metric that favours CPV currently.”

Industry insiders at the 5th Concentrated Photovoltaic Summit USA this year will need to think hard about how to tackle this problem. A slow correction in the dynamics of the crystalline silicon market, as over-supply dwindles, might help. But it is unlikely to be the whole answer. 

And for companies that are relying on investor largesse in order to keep going, time is of the essence. 

So far the CPV sector has not accrued quite the level of losses as, say, thin-film PV; but utilities and developers are hardly likely to warm to the technology if they sense it will not be around for much longer. That is why success stories on the ground, on the grid and more importantly on the factory line are much needed over the next two years.