Green Chip Stocks

Green Chip Stocks Index:

ABB (ABB) - 22.97 ↑ 0.20

Canadian Solar (CSIQ) - 38.34 ↑ 2.90

Capstone Turbine (CPST) - 1.23 -0.02

Chipotle Mexican Grill (CMG) - 682.90 ↑ 4.25

Daqo New Energy (DQ) - 34.77 -0.63

First Solar (FSLR) - 69.41 -0.28

General Electric (GE) - 25.85 -0.13

Hannon Armstrong (HASI) - 14.50 ↑ 0.01

Hanwha SolarOne (HSOL) - 2.18 -0.01

JA Solar (JASO) - 9.49 ↑ 0.24

Maxwell Technologies (MXWL) - 10.35 ↑ 0.08

NRG, Inc. (NRG) - 30.47 -0.31

NRG Yield, Inc. (NYLD) - 52.88 -1.51

Ormat (ORA) - 27.77 ↑ 0.24

Pattern Energy Group (PEGI) - 31.71 -0.53

SolarCity (SCTY) - 67.64 -1.04

SunEdison (SUNE) - 21.57 -0.46

SunPower (SPWR) - 38.40 ↑ 0.18

TerraForm Power (TERP) - 31.52 ↑ 0.28

Tesla (TSLA) - 284.12 ↑ 14.42

TransAlta Renewables, Inc. (RNW) - 11.34 ↑ 0.00

Trina Solar (TSL) - 13.23 ↑ 0.70

U.S. Geothermal (HTM) - 0.60 ↑ -0.00

Whole Foods Market (WFM) - 39.09 -0.05

Yingli Green Energy (YGE) - 3.36 ↑ 0.00

Nanosolar's New Solar Technology

New Modules Could Be the Cheapest in the World

By Chris Nelder   

There was a very exciting announcement in the world of energy this week, and I've been taking a hard look at it.

No, it wasn't the Tiber field find by BP. Although peak oil deniers seized on the discovery as validation of their argument that technology will continue to make vast new reserves of oil accessible and solve the peak oil problem, the hype was typically overblown. It reminded me of the initial excitement over the Jack field in 2006, which is east of the Tiber field and part of the same Lower Tertiary trend in deepwater Gulf of Mexico.

Perhaps I'll write on Tiber when there is more hard information about it, but on the basis of the very scant data currently available, I would speculate that first oil from it might be produced in 10 years, at a cost in the low billions of dollars, and that it might achieve a maximum flow rate of 200,000 - 300,000 barrels per day (bpd) some years later.

In other words, in the context of the peak oil problem, where we're worried losing 4 mbpd of oil production capacity each year starting somewhere around 2012, a discovery like Tiber is a good thing. . . but it's hardly a solution. We'd need to continually make similar discoveries roughly once a month in order to significantly change the global supply curve, and that simply isn't happening.

Rather, what had me excited was an announcement from Nanosolar that it was finally ending its "quiet period" after seven years of development, and had completed a new solar panel assembly plant near Berlin. The plant is fully automated using state-of-the-art equipment, and can reportedly sustain a production rate of one panel every 10 seconds, or 640 MW (megawatts) a year if operated 24/7.

The company claims to be churning out 1 million solar cells (about 1 MW) per month now, including production from its San Jose, California, plant which opened earlier this year and is expected to eventually reach 430-MW capacity. When both plants are operating at capacity, Nanosolar would be getting close to thin-film king First Solar's (NASDAQ: FSLR) manufacturing capacity, which is expected to reach 1,189 MW by the end of the year.

Nanosolar has taken a few hits in the press for keeping the wraps on its technology for so long. Founded in 2002, it gained early notoriety for raising a $150 million startup war chest — which rose to $500 million last year — before publicly divulging any real details about its technology, its strategy, or its anticipated production capability. The company is still privately held (much to the dismay of your editors here at Green Chip Stocks!).

Now we have an idea why the company was so careful to play close to the chest. . . and why their unveiling is truly a big deal.

Groundbreaking Technology

I first became aware of Nanosolar in late 2005, when a couple of their engineers gave a dog-and-pony show of their technology to the solar company where I was working at the time. I was immediately impressed by their visionary approach of "printing" solar material using a printing-press technology, which had the potential to achieve enormous savings in manufacturing cost.

But there were some problems to be solved first, like how to deposit a nice even coat only one-micron thick of their CIGS (Copper-Indium-Gallium-Selenium) "solar ink" on the substrate, and to do so at high speed, while still producing cells that were electrically matched so they could be wired together into high-efficiency panels.

There were also uncertainties about whether they should try to produce something revolutionary — like giant solar wrappers that could cover a bus or a building — or more evolutionary, like traditional rectangular modules that could be mounted using the same hardware as standard silicon modules.

Now, it appears they have solved those problems, tested their modules thoroughly, and gotten everything approved by UL, the International Electrotechnical Commission, and other regulatory agencies.

Here are a few of the advantages that Nanosolar's technology has over other types of photovoltaics.

  • Instead of using glass as a substrate, like First Solar and other thin film manufacturers do, Nanosolar uses aluminum foil. This has three advantages: One, foil is much cheaper (one or two cents per square foot and mil thickness). Two, it enables them to make the cells in a "roll-to-roll" process, turning a roll of foil into a roll of 50,000 cells in one continuous loop. (Check out their video to see their process in action.) Three, the end result is very lightweight and adaptable to many applications.
  • Nanosolar may be able to produce its modules more cheaply than any other manufacturer.
Until now, First Solar's module manufacturing cost has been the lowest in the industry, at about 87 cents per watt. Nanosolar has not yet announced its manufacturing cost or module pricing because it is only targeting utility-scale projects where the price is customarily undisclosed. (At this time, the company does not have a product for the retail market, but reports that one is in development.) But in an e-mail response to my inquiry, Nanosolar CEO Martin Roscheisen stated that his company is "planning to demonstrate that our capital efficiency is three times as good as First Solar's."
"Capital efficiency" is a broader metric than cost per watt, including the cost of building a fabrication plant and other costs. As recently as last year, Nanosolar believed it could potentially deliver product to the market at 1/10th the cost of traditional silicon, and build physical plants with roughly 1/10th the capital. I did not receive a direct answer on whether this is still their claimed. But it does seem plausible that Nanosolar will be the cheapest manufacturer in the industry.
  • The efficiency of Nanosolar's cells is now the highest in the thin-film industry. The National Renewable Energy Laboratory has independently verified that Nanosolar's cells can convert a maximum of 16.4% of the solar energy hitting them into electricity. When the cells are sorted and matched and turned into modules, Nanosolar's median efficiency is higher than 11%, just edging out First Solar's average efficiency of 10.9%. By comparison, traditional silicon modules are about 16% efficient, and hybrid modules like those from SunPower (NASDAQ: SPWRA), are 19.3% efficient — but both types cost more than twice as much as thin-film modules.
  • Nanosolar has incorporated several important innovations in the design of their Nanosolar Utility PanelTM modules.

    With their solar foil hermetically sealed between two sheets of tempered glass, their modules are mechanically stronger, more durable, and more lightweight than other thin-film modules, so they can be made in larger sizes and eliminate the need for bulky aluminum frames. They claim their modules are able to span 1.7 times the distance between rails that First Solar's modules can, reducing the need for mounting rails by 41% and significantly reducing the installation labor. Their thin profile also allows the company to ship more than three times as many kilowatts-worth in a shipping container as First Solar can, reducing shipping costs.

    Nanosolar's panels can carry six to seven Amps of current, compared with one Amp for First Solar's panels, which minimizes resistive losses and puts them on par with silicon modules. Consequently, the panels can be strung together in much longer strings before hitting the inverter's voltage input limit. This can reduce the need for cables running back to the inverter — a significant part of the balance-of-system costs — by as much as 73%, and allows arrays as long as 64 meters (versus a 12-meter maximum for First Solar), further reducing installation and cabling costs. The panels are also designed and certified to handle a system voltage of 1500V — 50% higher than the industry standard.

    Finally, the modules have an electrical connector on the edge of the module, rather than inside the back of the module, so only a short cable between modules is needed to make the electrical strings.  This reduces the labor cost of interconnection by 85%, according to independent third-party testing. Having personally spent many an hour crawling around under arrays fiddling with the wires (and occasionally making costly mistakes in the process), I can tell you this is a terrific innovation.

    In total, Nansolar believes the advantages of its module design will bring the balance-of-system costs for their installations in line with that of traditional high-efficiency silicon modules.

A Very Promising Future

Now, you might be wondering why I'd spend this week's column talking about a company that isn't publicly traded. The answer is simple: Nanosolar's technology could be a game-changer for solar PV, pushing the industry ever closer to the point where watt-hours generated from solar are as cheap — or cheaper — than those from coal. Its production process also offers the tantalizing possibility of churning out solar cells almost as easily as we print newspapers.

As the company matures and increases the consistency and rate of its output, and its product cost becomes more fully-known, the rest of the world will get a glimpse of just how effective solar power can be in addressing our energy challenge. With a reported $4.1 billion backlog of orders to fulfill (outside the U.S.), a strong balance sheet, and a bright future ahead, Nanosolar is emerging as a serious player. . . and they haven't even started on the retail market, let alone groundbreaking applications beyond rectangular rail-mounted modules.

In time, maybe we'll even get a chance to jump in on an IPO, and ride the next big wave of technological evolution in solar.

Until next time,

chris sig

Chris

P.S. While you can't invest in Nanosolar just yet, there are plenty of available solar plays turning profits for investors. In fact, Nick's readers at the Alternative Energy Speculator are finding ample opportunity for profit. Of the nearly 40 winners they've closed so far this year, 17 of them have been from solar companies. And that doesn't include the open winners in his portfolio! Click here to see how Nick is closing more than a winner per week and what his next move will be.

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