Executive Viewpoint

Solar technologies benchmark: comparing apples with pears?

27 May 2010

CPV Today talks to Dr Andrew Skumanich, founder and CEO of SolarVision Co (SVC), a Silicon Valley based renewable energy consultancy, about the burgeoning demand for solar technologies consulting and SolarVision’s master plan to benchmark the solar sectors.

By Katherine Steiner-Dicks

CPV Today: Which client base (i.e., government, venture capital firms, universities, etc.) is demanding more research and consultancy for solar technologies and is this just from the US or from other countries?

Dr Andrew Skumanich: Our client base is quite varied. Businesses make up the largest segment of our clients and includes both established companies already in solar, and in addition, companies which are looking to enter the energy sector and have no prior connection. 

Most often they are interested in an assessment of their potential opportunity – “does it make sense to enter this segment”, what is the value proposition, and what is the best strategy. 

Another major segment includes the venture capital firms who want reliable due diligence on a technology or a company’s marketability.   

The demand is world-wide with engagements also in Asia and Europe reflecting the global nature of this market.   

The government segment is also global and reflects the increasing focus on the inclusion of renewable as an energy source in developing countries.   

We have been asked by the government segment to advise them on a spectrum of issues – from energy micro-grids, to types of solar and other renewables for diversification of their energy resources.

Universities enter the picture in case we identify a state-of-the-art research program at a particular University that is a good match with a company’s targeted activity.  In that case we explore how to establish a relationship between the two entities for a mutual benefit. 

CPV Today: Which criteria do you believe you will use to compare the solar technologies of PV, CPV, Thin Film and CSP?

Dr Andrew Skumanich: There are only a few key criteria needed to compare the various solar technologies.

Of course, the primary one is the overall LCOE (levelized cost of energy) in $/kWh - or the overall cost of the electricity produced against the input costs - but of course this is a highly simplified view and involves multiple assumptions, and doesn’t fully reflect high initial start-up costs, or market uncertainty (e.g. the current potential issue of Spain retro-actively reducing the FIT).

The other simple metric is $/W for installation, but again this gives a less complete picture than LCOE and oversimplifies the comparison. 

The $/W installation neglects several key considerations:

• The O&M costs, which can vary dramatically across technology and application
  
• The need for storage and control of fluctuations
  
• The particulars of the location and specific application requirements (e.g. weight, aesthetics, etc.)

That said, the key criteria are the following:

• $/W installation (panels or generation elements, the BOS, and the installation)
• $/W O & M (operations and maintenance)  - what it costs to run after the preliminary set-up
• the Capacity factor – an indicator of actual vs potential energy production
• the Site specific requirements: e.g. footprint, or co-location with other energy sources

The market is not a one-size-fits-all, but has varying constraints and requirements.

And finally there is a not-so-hidden aspect of “bankability”. This is a re-occurring theme where the sources of investment capital are more or less likely to finance a given project depending on the technology and the level of commercial risk.

CPV Today: How and from where will you be gathering the data and analysing it?

Dr Andrew Skumanich: The data comes from multiple primary sources -- in particular the final user - and very much depends on which flavor of "solar" is being evaluated: i.e. the commercial sector, the residential sector, and the utility sector.  These sources are directly interviewed or queried by a survey. 

The analysis consists of collecting a representative set of inputs and establishing the database with a typical average.  The use of multiple sources provides for triangulation to ensure reliability.

Note for instance that there are some “hidden” markets – in particular the micro-grid energy utility for rural development which does not really show up on the radar at this time. 

However, we are getting numerous hits for guidance on this application in developing counties. In this case, the research is based on evaluating the common market demands from the individual sources and analyzing the implications.   

CPV Today: Will you be working with other partners and how can solar companies get involved with the research?

Dr Andrew Skumanich: At this time we do primary research which means that we directly contact the necessary market players ourselves without using a partner. 

However, there are indeed opportunities for solar companies to get involved -- in particular they can provide their perspectives on "Market Pull" i.e. what demand they are hearing from the market.

CPV Today: What do you hope the published papers will accomplish?

Dr Andrew Skumanich: The hope is two-fold:  to provide an agnostic baseline for productive discussion, and second, to ground the various segments of the industry on reality, not just optimistic thinking which can be prevalent within the renewable energy community.   

In the end the goal is to help keep the industry elements centered on their legitimate value propositions so that the creativity and resources go in the directions which will help the overall industry of alternative energy accomplish the challenge of providing a significant part of the energy supply equation.

To respond to this article, please write to the editor:

Katherine Steiner-Dicks: steinercommunications@yahoo.co.uk