Photovoltaic Cost Reduction

Ontario’s Green Energy Act includes electricity produced by photovoltaics, at premium prices. The theory of the price premium was that, over time, as processes and manufacturing improved, and costs reduced, the price premium could be lowered. There is compelling evidence that this is occurring. Three such cost reduction methods recently caught my eye.

The National Renewable Energy Laboratory in the US has developed an Optical Cavity Furnace, which basically uses concentrated light instead of heat in the production of solar cells. Concentrated light of course creates heat, but more precisely concentrated than conventional heat. The process of making solar cells uses a lot of heat in purifying, diffusing, etching and layering of solar cells. The new furnace improves the accuracy of the processes, thereby increasing the efficiency of the solar cell from converting an average of 16% of the sun’s energy to electricity to 20%, giving an increase in output of 25%, while using half of the energy input of conventional furnaces. The capital cost of the furnace is also expected to be lower than conventional ones. This one invention, once deployed, could reduce the cost per kWh of cell based photovoltaic installations (90% of the market) by 10%-20%.

Meanwhile, Stanford university researchers have demonstrated new materials that allow photovoltaics to capture a greater portion of light spectrum. Solar cells today generate electricity only from the visible light spectrum. But over half the energy from the sun is found in the invisible infrared spectrum, which today simply makes heat. The new materials offer the possibility of developing cells that are twice as efficient as today’s. This development is a long way from commecialization, but once commercial, offers substantial cost reductions.

Canadian Solar has made a small step forward in reducing the cost of installation. They have announced a product that integrates the AC converter and smart electronics into the panel. The result is less installation time, less wiring, and less losses compared to centralized inverters. While not revolutionary, this type of system integration offers the chance to reduce installation time and costs, which are a significant part of system costs.

The rate of innovation in the solar industry is truly astounding. It is driven by the promise of markets in jurisdictions like Ontario, that have progressive procurement policies, bringing us closer to day when solar energy is at grid parity, where its cost is the same as other new sources of power.

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