Back in February 2011, the U.S. Department of Energy announced the launch of the SunShot Initiative, a collaborative national initiative to make solar energy technologies cost-competitive with other forms of energy by reducing the cost of solar energy systems by about 75 percent before 2020.
SunSpot was the first phase of the DOE’s Photovoltaic Manufacturing Initiative (PVMI) that is designed to accelerate cost reduction and commercialization of solar technologies. The initiative was also designed to improve the domestic PV manufacturing base and develop a workforce with the critical skills needed to further establish a solid sustainable “green” energy industry in the U.S.
DOE has now set an October 2011 deadline for applications to tap its $50 million "SUNPATH" (Scaling Up Nascent PV At Home) Innovative Manufacturing Initiative, which is Phase 2 of the PVMI. While SunShot focuses on the cost reduction of the solar technology itself, SUNPATH aims to grow the domestic solar manufacturing market and help make it a driver as an economic engine by ensuring that the technologies developed during the first phase are manufactured domestically.
What is making the U.S. government and solar industry nervous is America’s steady drop in solar market share globally. The United States had maintained a dominant global solar market share in 1995, manufacturing 43 percent of the world's PV panels. But the U.S. market share shrank to 27 percent by 2000 and to 7 percent by 2010, according to the DOE. This new round of funding is designed to jump-start the industry.
SunShot –Phase 1
The goal of the original SunShot was to overcome current technological barriers and lower the cost of PV installations. The theory is that by reducing the total installed cost for utility-scale solar electricity to roughly 6 cents per kilowatt hour will result in rapid, large-scale adoption of solar electricity within the United States. SunShot’s goal of making unsubsidized, utility-scale solar cost-competitive with other forms of energy by the end of the decade was initiated to “re-establish American technological leadership, improve the nation's energy security, and strengthen U.S. economic competitiveness in the global clean energy race.”
In the first phase of the Photovoltaic Manufacturing Initiative in February 2011, DOE’s “Sunshot Advanced Manufacturing Partnerships” initially committed $20 million in funding to support PV projects at 1366 Technologies, 3M, PPG, Varian Semiconductor and Veeco, as well as $7 million to support the DOE National Renewable Energy Laboratory’s (NREL) Photovoltaic Incubator program.
In April 2011, another $112.5 million over five years was distributed to three industry and academic groups to enable "substantial" reduction in the cost of manufacturing PV modules. The recipients were: the U.S. Photovoltaic Manufacturing Consortium ($62.5 million); the Bay Area PV Consortium, managed by Stanford University and the University of California ($25 million); San Jose, California-based SVTC Technologies, a partnership of SEMATECH, the College of Nanoscale Science and Engineering (CNSE) at the State University of New York at Albany and the University of Southern Florida ($25 million) for the development of advanced solar PV manufacturing processes.
The current round of SunSpot funding is DOE’s $12.5 million “Rooftop Solar Challenge,” which aims to achieve “measurable improvements” in market conditions for rooftop PVs in the U.S. The focus of the funding, which has an August 31, 2011 deadline, is to streamline and standardize the permitting and interconnection process for rooftop installations.
SUNPATH – Phase 2
For the new SUNPATH program, phase 2 of the PMI, the DOE plans to inject another $50 million over two years to close the funding gap and help solar energy companies at a critical stage with pilot-scale projects to ramp-up to large-scale manufacturing and production operations. By bridging this gap, DOE hopes to ensure that these newly developed solar technologies are actually manufactured in the United States.
The projects that SUNPATH seeks to fund will be those that have “sustainable, competitive cost and performance advantages,” according to the DOE.
Testing Labs Getting Ready for SUNPATH
Over the past few months, U.S. solar testing and validation laboratories have stepped up their upgrades to ensure that the new technologies developed in phase 1 and 2 of the PMI can be tested quickly at scale in multiple climates in the United States in order to speed their entry into the market place.
The National Renewable Energy Laboratory, located in Colorado, and the TÜV Rheinland PTL lab located, in Arizona have both seen recent expansions this year.
On April 7, 2011, the new CFV Solar Test Laboratory in Albuquerque, New Mexico opened to offer certification for PVs and concentrating solar power devices. The CFV Lab is jointly run by Toronto-based CSA Group, the VDE Testing and Certification Institute (Offenbach, Germany), the Fraunhofer Institute for Solar Energy Systems (Freiburg, Germany) and the Fraunhofer Center for Sustainable Energy Systems (Cambridge, Massachusetts).
Fraunhofer-Gesellschaftalso announced in May 2011 it was opening the Center for Sustainable Energy Systems (CSE) in Boston. The 50,000-square-foot CSE facility will house R&D labs for development, testing and evaluation of solar energy technologies.
SUNPATH Applications due in October
The DOE is making available another $50 million investment over two years for the SUNPATH program and is seeking applicants by October 28, 2011 - with “industrial-scale demonstrations of PV modules, cells, or substrates that offer lower-cost solutions,” which is part of the SunShot goal.
”Significant non-federal cost share is required, to be achieved in partnership with sources of private capital and state and regional funds. This funding opportunity will address the currently unfulfilled and urgent need for a significant investment to assist the first industrial-scale manufacturing of a new PV technology,” according to the DOE.
Foreign Grant Participants
According to the DOE’s Funding Opportunity Announcement (FOA) for eligibility criteria, all entities incorporated in the United States are eligible to apply for the SUNPATH funding as prime recipients, while companies not incorporated in the United States are not eligible to apply as the prime recipient.
However, according to the DOE, “foreign participants are allowed as sub-recipients to a domestic entity provided that:
- The foreign sub-recipient(s), in aggregate, shall not receive more than 20 percent of the total estimated DOE funding and
- The foreign participant must provide at least 75 percent cost sharing (2/3 of that in form of cash) of their portion of the total project cost.”
DOE Funding Compliments Venture Capital
An August 3, 2011 report fromErnst and Young LLPrevealed that during 2011’s second financial quarter, U.S. venture capital investment in green energy technology was driven by solar investment, according to the firms analysis of data from Dow Jones VentureSource. Although the firm's analysis shows a 44 percent dip in overall green tech investment from the record breaking $1.9 billion duringQ2 2010, the $1.1 billion invested during Q2 2011 still represents a strong quarterly showing compared to previous quarters. The $234.2 million in solar financing represented 21 percent of the overall green tech investment in Q2 2011.
The big winner was California-based BrightSource Energy, which scored $168 million from Google Inc.for its 392 MW solar thermal Ivanpah project in California. In February 2010, BrightSource had received a conditional commitment from the DOE for $1.37 billion in loan guarantees to support financing of the Ivanpah project.