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Pacific Gas & Electric, the utility that services much of northern and central California, has announced plans to buy electricity from an 800 megawatt solar panel installation, a vast project many times the size of anything currently existing.

The move is somewhat surprising, because the expectation was that utilities would first work on building more solar thermal plants, which focus sunlight with mirrors to drive steam turbines, before building large plants with costly solar panels. At around the output of a nuclear plant, the PG&E project should provide power to several hundred thousand homes.

Economics usually drive such purchasing decisions, and they don’t always make sense for solar. Solar panels are generally expected to produce power for costs of over 15 cents per kilowatt hour when set up en masse (in smaller installations, like rooftops, the figure is higher). Roughly speaking, that’s at least three times what coal plants cost. Wind power goes for well under 10 cents per kWh, and solar thermal producers usually claim to be at 8-12 cents per kWh. Some estimates are listed here.

Thus the unusual aspect of PG&E’s deal. It would seemingly make more sense to work with other types of renewables to reach the 20 percent requirement for renewable energy the utility needs to reach by 2010. While costs for solar panels have been dropping, most companies would prefer to test smaller projects first. No numbers have been released for the installations, which will be in San Luis Obispo County.

One possible reason for PG&E pulling the trigger on the deal is that there is very little time left until the 2010 requirement. Solar thermal and wind require not only building the plants, but also erecting costly transmission lines from the site, sometimes several hundred miles worth. San Luis is close to the center of PG&E’s territory.

However, there’s also an existing deal with solar thermal provider Ausra to build a 177MW plant in the county, which suggests that PG&E could have contracted for more solar thermal in the same location. Instead, it went with Optisolar, a secretive thin-film solar firm that will build out a previously rumored 550MW of panels, and SunPower, a public corporation that makes standard panels, and will have 250MW of generating capacity.

Optisolar, which still says little about its technology, is also building about 100MW of capacity in Ontario, which offers hefty incentives for solar power. The thin-film silicon panels the company makes are likely very inefficient at converting sunlight to electricity, but very cheap to make.

The obvious conclusion to draw is that the economics of solar panels have changed drastically in a short time, such that giant solar farms make sense. And that seems to be the impression that all three companies are attempting to give off; for instance, a PG&E spokesperson told the NYT that the plant would be “competitive with wind power”.

However, there’s likely more to the story than is being admitted. PG&E obviously has some strong motivations to buy solar power. The question is what its contract with the two companies looks like. A standard contract involves a set purchase rate for electricity, say 12 cents per kWh for ten years, rising with inflation. That limits risk for the utility; and the risk, in turn, generally falls on the owner of the generating capacity.

What’s nearly certain is that the plants will not be competitive with wind power, which is not only very cheap, but also proven at very large scales. Solar is not yet proven at the scale PG&E is working on — and that may remain the case until the plants are built. And in the meantime, to be built at all, the plants will require a renewal of the investment tax credit, which still doesn’t look likely.

While the United States has remained at an impasse over the extension of its clean energy tax credits, the Canadian province of Ontario has been busy positioning itself as a go-to destination for cleantech’s mountains of cash.

Ontario initiated a flurry of incentive programs aimed at increasing its overall renewable energy production capacity in early 2004 through its 20-year energy plan, dubbed the Integrated Power System Plan (IPSP). Its goals were to obtain an extra 5 percent, or 1,350 megawatts, from renewable sources by 2007 and 10 percent, 2,700 megawatts, by 2010.

Optisolar, 6N Silicon, Cyrium Technologies and Verdant Power are but a handful of companies that are either based in Ontario or that have plans to build projects there. Several of these have received generous backing from the government, with Mississauga-based 6N Silicon, a manufacturer of low-grade silicon, securing nearly $8 million. Hayward, Calif.-based Optisolar has begun construction on a 50 megawatt plant in Sarnia and plans on adding two more 20 megawatt projects in nearby Petrolia and Tilbury.

Its first initiative was to launch the Request for Proposals (RFP) program, through which the government purchased power directly from renewable energy projects. In 2005, it started ReNew Ontario, a five-year, $30 billion plus plan to renovate and rebuild the province’s ageing infrastructure.

It also began to provide a number of tax incentives for businesses and homeowners and started funds aimed at encouraging research into alternative fuels and growing the northern economy by creating new jobs and subsidizing clean energy siting. The Next Generation of Jobs Fund, a 5-year, $1.15 billion program, supports companies’ efforts to train and create a new generation of highly skilled green-collar workers.

The Renewable Energy Standard Offer Program (RESOP), started in late 2006 and managed by the Ontario Power Authority (OPA), has become the province’s real ace in the hole. Similar to the feed-in laws that have made Spain and other European countries such dominant cleantech players, it provides a standard pricing regime, simplified eligibility and streamlined contracting requirements for small renewable projects — wind, solar, biofuel or other.

Producers of solar photovoltaic energy are offered a fixed rate of 42 cents per kilowatt hour. To give you some perspective, that is more than 4 times as much as the 20-year fixed feed-in tariff offered by the California Public Utilities Commission (CPUC) for small renewable projects started in 2008.

Initially, all other producers were paid at a base rate of 11 cents per kilowatt hour. The government soon made the rate more attractive by awarding an extra 3.52 cents per kWh to projects that operated reliably during peak hours. It has also made 20 percent of the base rate subject to annual indexing for inflation, with the rate adjusted every May.

To become eligible, the projects must be located in Ontario and have an installed capacity of 10 megawatts or less — roughly enough to supply 10,000 homes — which they supply through the local grid. The producers must also enter into a 20-year, fixed rate contract.

By comparison, only small installations that are less than 1.5 megawatts in size can qualify for California’s feed-in rates. These can also be derived from a variety of renewable sources, however, including solar, geothermal, biogas, fuel cells and others.

The Ontario government has handily beaten its renewable targets, contracting for over 2,500 megawatts of clean energy since the programs’ inception, and is well on its way toward reaching 4,000 megawatts in signed contracts by the end of 2008. There are now 43 projects that are either planned, under construction or already online. It plans to double its renewable energy capacity to 15,700 megawatts by 2025, which would be enough to provide around 48 percent of Ontario’s energy needs; its current capacity supplies roughly 22 percent of its needs.

A large proportion of its current needs, around 52 percent, is being satisfied by its large nuclear capacity, which it will maintain at its existing 14,000 megawatts. The government plans on meeting another 6,300 megawatts in demand through conservation by 2025.

Despite Ontario’s aggressive expansion into the cleantech space, it remains to be seen whether it will be able to wrest the crown from Silicon Valley or European countries like Spain and Germany, which leads the world in solar energy capacity.

Because U.S.-based companies will have a harder time breaking into its extremely competitive markets, they may decide to keep their projects stateside in the hopes that Congress or a future administration enact a more favorable tax and investment regime. Faced with a gloomy investment climate at home, however, many companies may be lured by Ontario’s attractive tax and financial incentives package.

HelioVolt CEO BJ Stanbery is set to announce that his company has set a new speed record for CIGS conversion efficiency, ratcheting up the pressure in the competitive, high-stakes thin-film solar cell sector. The Austin, Texas, start-up, which raked in a cool $101 million in second round funding last October, claims its proprietary FASST reactive transfer printing process can produce cells with a 12.2% conversion efficiency in a mere 6 minutes.

This latest technological breakthrough comes as HelioVolt and competitors such as Nanosolar, Miasole, Solyndra and OptiSolar race to bring the cheapest, most efficient solar cells to market. All are competing to lower the cost of solar cells by using copper indium gallium selenide (CIGS) instead of the costlier, but more efficient, crystalline silicon material. Silicon solar cells have a conversion efficiency of around 14-20%.

Nanosolar, the most heavily-funded thin film firm outside of the public market and one of the first to commercially sell its cells, broke the crucial $1 a watt price point in December — an important metric because it means cells can become competitive with conventional sources of electricity — and First Solar (NASDAQ: FSLR), the largest publicly traded thin-film firm, is close to doing so.

HelioVolt’s FASST process helps reduce costs by building CIGS cells 10-100 times faster than its competitors’ processes, Stanbery says. The 12.2% efficiency figure was independently confirmed by scientists at Colorado State University. Stanbery added that there was still much room for improvement, and that his company was focusing on squeezing a higher efficiency out of its cells.

The FASST printing process can directly apply (or “print”) thin film layers to a variety of substrates, including glass substrates for solar modules, roofing tiles and other construction materials. HelioVolt said last Tuesday that it would partner with Architectural Glass & Aluminum to develop building-integrated photovoltaic (BIPV) products.

Stanbery hopes to make a dent in silicon’s once indomitable lead in the industry by accelerating the commercialization of the high-throughput printing process to scale production at its soon-to-be completed 20 MW plant in Austin, after which it plans to aggressively expand its operations overseas.

Though it remains to be seen whether HelioVolt remains on schedule to get its cells out by the end of 2008, the company says its record breaking technology will put it out in front of its much bigger rival, First Solar, which uses cadmium telluride to build its cells, from the get-go. Even assuming its technology is superior, HelioVolt will have a lot of ground to make up if it ever hopes to catch First Solar, which already has over a gigawatt of production capacity, and some of its other rivals, which have announced more ambitious construction plans.

Nanosolar CEO Martin Rosecheisen, whose first plant’s capacity exceeds 400 MW, scoffs that HelioVolt’s plant looks more like a pilot project than a commercial-scale one. OptiSolar recently announced plans to build a 550 MW plant in San Luis Obispo County, California. It has already started construction on a 50 MW plant in Sarnia, Ontario, with two additional 20 MW plants to come in nearby Petrolia and Tilbury.

Firms need attention to thrive, right? Well, no, not always — some companies prefer to remain in stealth until they’ve reached some milestone, or maybe just indefinitely.

Put Optisolar, a manufacturer of thin-film solar panels, in that latter category. When we first reported on Optisolar a year ago, it was planning to build one of the world’s biggest solar farms in sunny Ontario, Canada and it was doing it quietly. Now it appears that business is booming and the company is expanding at least as quickly as others we regularly report on, like Nanosolar.

That’s evidenced by the one announcement Optisolar made recently, of plans to build a solar plant capable of producing 550 megawatts on land in San Luis Obispo County, Calif. For reference, that’s a monstrous size, unheard-of for any project using solar panels (rather than alternate technologies like solar thermal). The company says the project will power about 190,000 homes.

The original plan in Sarnia, Ontario was for a 40MW plant, which has since been expanded to 50MW, with construction just started, according to Celsias. Two additional 20MW projects will be placed nearby in Petrolia and Tilbury. Another project was rumored to be under consideration in nearby Detroit.

It sounds odd for Optisolar, which is based in Hayward, Calif., to have chosen to build first in Ontario, but that’s likely because of the artificially high prices it can receive there — 42 cents per kilowatt hour, according to the Toronto Star. However, the market is more competitive in California, and the company will need to offer a low enough price to convince the local utilities to buy its power, over that of other renewable sources.

A separate question is where all these panels will come from. For that, the company will stay close to home. It just leased 650,000 square feet in a former Air Force base, according to the Sacramento Business Journal. That’s about as much space as Nanosolar planned for both of its two facilities, in San Jose, Calif. and Germany. However, Optisolar plans to go even larger, expanding to occupy over a million square feet and employ 500 people by 2011. There’s an extra incentive for Optisolar to grow quickly — if it fails to meet expectations, it may have to forfeit part of the $20 million in tax breaks offered by the local government.

Right now, the company’s website claims a staff of 270, making it a rather large startup. But it’s also recruiting at a good clip. On Jobster, for instance, there are 23 positions listed, all white-collar (in other words, they aren’t listing their manufacturing positions online). Most are for engineers, but tellingly, three are for various human resources positions, indicating that the company is already expanding its support services for an ever-larger staff.

The next logical question is where the funding for all these projects and facilities is coming from. The source almost certainly isn’t Silicon Valley venture capitalists — another reason the company can keep a low profile. It did recently take in a $38.3 million funding from a Canadian private equity fund, according to Earth2Tech. But more is certainly required to grow a company to the size Optisolar seems to be aiming for. Luckily, several top execs at the company seem to have connections to other private equity firms, as well as oil companies, as we pointed out last year.

A picture is forming, but there are lots of questions remaining about Optisolar. For instance, how efficient are its solar cells? What’s their cost per watt? Repeated inquiries to the company over the past few weeks have been fobbed off or ignored, so I’ll leave it in your hands — if you’ve know more, drop me a line.

Writing on Nanosolar’s blog, CEO Martin Roscheisen has unveiled the next prong in his firm’s business plan — a focus on municipal solar power plants of 2 - 10 megawatts in size. The idea is to build 10 acre lots on the outskirts of small cities that could feed into the municipal power grid directly.

Each lot, consisting of several rows of solar panels mounted on rails above ground, could provide up to 2 megawatts, enough to serve 1,000 homes. The panels would be mounted on rails to prevent them from affecting the surrounding wildlife and vegetation.

Nanosolar’s scheme could be scaled up to supply the needs of larger cities — for instance, 5 lots, which would generate 10 megawatts of electricity, could serve 5,000 homes. Unlike coal-fired plants, which typically take 10 - 15 years to build, solar power plants can be done in as little as 12 months — and much more cheaply.

Though Rosencheisen acknowledged the appeal of rooftop arrays, which solar installers like SolarCity, Sun Run and Sungevity focus on, he also criticized them as a business “that’s difficult to scale rapidly in a truly meaningful way,” and “a somewhat more expensive proposition.” Imagine having to hire a contractor to crawl around your roof to install an expensive array or — worse yet — having to set it up yourself, he noted irreverentially.

This small plant approach, though new to the U.S., has already been widely implemented throughout Europe and Asia in what Rosencheisen called a “silent revolution” that has yet to be picked up on by the mainstream press, and that is too often criticized by utility executives as being too costly or unrealistic. “It works, it is economic, and it is possible now,” he said.

Nanosolar has gotten plenty of attention for its claim that it can sell its cells for as low as 99 cents per watt, low enough to be competitive with non-renewable energy sources, as well as recently raising over $50 million more from EDF Energies Nouvelles. However, there are a number of other, less-sung companies that have either implied or outright stated that they have a similar game plan for small-scale power plants.

SolFocus, for example, makes large solar concentrator panels, which use mirrors to focus more light onto highly efficient solar photovoltaics. Its initial product isn’t designed for rooftop installation, but would work perfectly on open spaces near facilities that need modest amounts of power — such as universities or off-grid villages. It raised $63.6 million last year to build its panels in the U.S. and, through its new subsidiary SolFocus Europe, across the Atlantic.

In fact, the move to build small has swept most categories of solar power, as companies have come to realize that they can thus avoid most of the bureaucratic snags involved in building plants that produce over 50 megawatts. Furthermore, by grouping their panels into small lots, they’ve been able to grab small tracts of land on the edges of cities and towns, or on land that can be dual-purposed like farms. A secondary advantage is the ability to hook into the existing power grid without the modifications required to channel power from a large plant.

Another example is Cool Earth Solar, a startup based in Livermore, Calif. that hews to the “cheaper is better” model, using inexpensive reflective balloons to concentrate light on cells. It plans to suspend its balloons on cable-bound arrays 12-14 feet above active farmland, letting sunlight strike both the solar cells and crops beneath. The firm claims that it can produce electricity for 18 cents a watt, and hopes to ramp up its production of balloon concentrators to 50 megawatts by next year.

And there’s Infinia, a company that just raised its second round to $57 million, which specializes in the production of 3 kilowatt dishes that, lumped into groups, will generate 1-10 megawatts in small-scale projects. Finally, in the solar thermal category, there’s eSolar, which just snagged $130 million from Google, Oak Investment and Idealab to pursue a similar approach — building a number of small plants that produce up to 33 megawatts each.

The only category to have mostly stayed away from this trend is expensive silicon-based solar, which is generally relegated to rooftop installations. Yet even there a few exceptions are already starting to appear. OptiSolar, for example, a Hayward, Calif., based startup, makes somewhat less expensive thin-film solar cells. It last year announced plans to build a 40 megawatt solar power installation near Sarnia, in Ontario, Canada, and has since announced several more of a similar size.

A secretive Hayward, Calif. company has just announced it will build the largest solar power “farm” in North America, using solar cells manufactured in Silicon Valley.

The site, near Sarnia in Ontario, Canada, will be enough to power between 10,000 and 15,000 homes on sunny days, drawing on a monstrous 40-megawatt capacity. The company, called OptiSolar, is backed by private equity firms apparently with oil connections. It has studiously avoided saying anything until this announcement.

The deal is significant, not merely for its size, but because it was scooped by such an unknown company. Why wasn’t public company SunPower in the mix, for example? One clue is OptiSolar’s model, which does soup to nuts, unlike most others. It does everything, from manufacturing the solar cells to generating the power on-site and then selling the power through the regional grid. Usually, the manufacturing and sales processes are separate. It also uses thin-film silicon technology, which gives it an advantage because it uses less amounts of expensive silicon.

This breakthrough deal raises questions about the progress of other start-ups, such as Nanosolar and Miasole, that have gained buzz for dispensing with traditional use of silicon, in favor of a more flexible material called CIGS. Most of these have yet to announce any deals, though we’ve heard some are in the works. Their solar ink can be printed and distributed easier than can bulkier silicon panels. Several of these start-ups have been working away for at least as long as OptiSolar; one question remains how efficient their solar cells are.

The Ontario Power Authority has purchased electricity from the company under a 20-year contract. The world’s largest farm is the 12-megawatt Erlasee solar park in Germany (image below left courtesy of the Toronto Star and Daniel Karmann, shows what these farms look like). The OptiSolar farm will stretch across nearly 365 hectares, and estimates are that the cells cost at least $300 million to product, according to the Star. OptiSolar chose Ontario because of the subsidies if offered. If all goes according to plan, the farm will be up and running by 2010.

A spokesman declined to say much about the company’s other plans, and wouldn’t disclose the identity of the investors. One clue is the chairman on the board, who appears to be the only person affiliated with big money, and oil money at that: Geoff Cumming, of Gardiner Group Capital, who is also affiliated with Emerald Capital, Zeus Capital. He’s also “Director for OPTI Canada, for Western Oil Sands.” He is chairman of OptiSolar, and so it would make sense if he represented the major investor.

The company’s solar cells will be built at a plant being constructed in Hayward, we’ve confirmed. OptiSolar, a two-year-old company formerly known as Gen 3 Solar, recently moved to more than double its 33,406 square foot space at an industrial part of south Hayward.

The company has also agreed to build a large project outside of Detroit.

Even as the nation’s Environmental Protection Agency remains cowed and inactive, various solar projects are surging forward. Kohl’s just announced it will convert most of its California department stores to solar power starting next month.

We’re seeing job listings for this OptiSolar, which suggest it is using sputtering technology of some kind and laser scribing, perhaps on glass. We’ve listed them below (sorry, not very pretty):

http://sfbay.craigslist.org/eby/egr/317446212.html
http://72.14.253.104/search?q=cache:CpAXRSNLj94J:www.textilejobsite.com/jobsearch/jobs.asp%3Fco%3DOptiSolar+OptiSolar&hl=en&ct=clnk&cd=27&gl=us
http://72.14.253.104/search?q=cache:9Te3ArLmHiYJ:www.jobscareers24.com/c-cvjxnx-optisolar-jobs.html+OptiSolar&hl=en&ct=clnk&cd=18&gl=us
http://groups.google.com/group/REBN/browse_thread/thread/889116cbdfe26aa1

http://www.humboldt.edu/~resu/xoops/modules/wordpress/2007/03/13/solar-job-in-bay-area-optisolar/
http://72.14.253.104/search?q=cache:ESkJtqKMMfQJ:www.misjobsite.com/jobsearch/jobs.asp%3Fco%3DOptiSolar+OptiSolar&hl=en&ct=clnk&cd=26&gl=us

http://72.14.253.104/search?q=cache:CpAXRSNLj94J:www.textilejobsite.com/jobsearch/jobs.asp%3Fco%3DOptiSolar+OptiSolar&hl=en&ct=clnk&cd=27&gl=us
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20070426/solar_farm_070426/20070426?hub=SciTech
http://www.linkedin.com/in/davidtaggart
http://www.theglobeandmail.com/servlet/story/RTGAM.20070425.wsolarfarm0426/BNStory/National
http://www.jobs4careers.com/c-rizybm-optisolar-jobs.html