CPV – The Zero Billion Dollar Market
Morethan one hundred people gathered last night at an EBC (EnvironmentalBusiness Cluster) event at the Tech Museum in downtown San Jose to hearthe story of GreenVolts, a Venture Capital-funded start-up aiming totake HCPV (High Concentration Photovoltaics) to market.
Therereally isn’t a CPV market – it’s a new technology, yet to be deployedin any meaningful scale. Companies like Amonix, SolFocus, andConcentrix have managed to deploy a few megawatts here and there butthe power being generated is negligible in comparison to other solartechnologies like flat panel silicon-based PV or solar thermal. Thereal metric in question with CPV, as with any energy source, isLevelized Cost of Energy (LCOE) and CPV has no track record to proveits’ LCOE advantage. The price of triple junction solar cells andtwo-axis trackers, maintenance, installation and other costs remainunproven and risk-laden for CPV.
CPVminimizes the use of silicon, which was a reasonable value propositionwhen the price of polysilicon was $500 per kilogram a few years ago. But today, with the price of polysilicon stabilizing at between $50and $70 per kilogram – CPV’s value proposition starts to evaporate. That makes life for a CPV start-up pretty challenging.
I’m on a Boat (Featuring B-Cart)
Aboutfour years ago Bob Cart was on a sailboat in the Pacific with apregnant woman, his wife, when his solar epiphany occurred. The boatused solar panels, big, bulky, and inefficient and he asked himself"Why not pick the biggest problem to solve?" and he decided to enterthe renewable energy market to try to solve the "big, gnarly problem"of energy.
Moonlighting in his garage, he filed for a $95,000grant with the CEC (California Energy Commission) and filed a patent. While the grant percolated – he entered the California Cleantech Open(CCTO ) and won in the renewable category and swimsuit competition -$50,000, office space and some other goodies that allowed them to getgoing. He also eventually received the $95,000 grant. Cart was nowthe CEO of a modestly-funded CPV start-up.
Since then GreenVolts has raised more than $45 million from Oak Investment Partners and other investors in three rounds:
$10M Series A
$34M Series B
PG&E and the CPUC Encounter GreenVolts
HalLaFlash of PG&E encountered GreenVolts as a judge on the CCTO. Hehas since favorably scored GreenVolts’ RFO application for a 2MW energyproject on project viability, believing that "this was a viabletechnology that could make a difference." The 2MW project was deemedof sufficient size to prove the technology and help GreenVolts reducetheir costs. In Hal’s words, "It was more a qualitative thumbs-up, nota quantitative thumbs-up."
Paul Douglas of the CPUC wasinitially somewhat less enthusiastic. The CPUC looks for least cost,best bids and all bids are ranked by those metrics, while viability isa soft metric. He viewed PV as a subsidized technology suitable forrooftops and not a really a utility project. Since then he seems tohave come around, believing that, "To get to the aggressive CaliforniaRPS we need to diversify our portfolio with 10MW and below projects onthe distribution network, not in the desert." And GreenVolts does meetthose requirements.
2012: Something Completely Different
On a slightly different note, unrelated to GreenVolts, the ubiquitous Hal LaFlash flashed-forward to 2012 and saw the following:
* PG&E’s smart meter roll-out will be complete by 2012
* Up to 4500 MW of wind power will be online from the Tehachapi wind farm project
* The need for big time energy storage to cope with that much wind power and other renwables on the grid
Small Matter of Actually Executing
Thiswas a heartwarming story about a smart start-up that was able to raisecash from the state, from business plan competitions and fromVC-investors. They filed patents and won small contracts with majorutility players. They’ve had the requisite board room shake-up. Nowall GreenVolts has to do is build a reliable and innovative product,deploy it in an economical fashion, and generate energy at grid-parityand a competitive LCOE.