Driving US solar adoption forward

Prior to Trina Solar, Herrero worked for BP Solar for five years, first as Global Procurement Manager for PV Systems and later became Global Procurement Manager for Strategic Raw Materials.

NGP&E. What potential does solar energy have in the US, particularly in comparison to other sources of renewable and sustainable energy? What are the specific benefits of solar energy?

AH. In his State of the Union address, President Bush set a goal for a mandatory fuels standard requiring 35 billion gallons of renewable and alternative fuels in 2017 – nearly five times the current target. With growing concern about America’s dependence on foreign oil, there has been renewed interest in alternative energy, including solar.

Today, several US states, most notably California and New Jersey, have implemented incentive programs to encourage consumers and businesses to use solar power. For example, in California, the state’s Public Utilities Commission currently provides rebates to the amount of $2.50 per watt installed. And in August 2006, California enacted a law with a goal of installing 3000MW of solar capacity by 2017. In New Jersey, the New Jersey Clean Energy Program has set of goal of reaching 90MW of installed solar generation capacity by 2009 through rebates, grants and low interest project financing. In addition, the federal Energy Policy Act of 2005 provides tax credits for residential and commercial systems. According to the market research firm Solarbuzz, the overall US market for solar installation grew from 84MW of new installation in 2004 to 105MW in 2005. We think this will continue to grow.

There are numerous advantages to solar power compared to conventional and other forms of alternative energy. Most obviously, solar energy is unlimited and it’s free. Fossil and nuclear-fueled power generation, on the other hand, require additional fuel and are therefore susceptible to rising fuel prices and delivery interruptions. Secondly, solar power systems are reliable. Once they have been installed, there is little maintenance required other than an occasional cleaning of the solar module surface and there are no moving parts that can be broken or need repair. In fact, accelerated aging tests have shown that solar modules can operate for more than 20 years without the need for major maintenance.

Of course, there is also the environmental advantage. Solar power is one of the cleanest electric generation sources around and is capable of generating electricity without creating air or water emissions, noise or vibration, and with little impact on a habitat or waste creation. Solar power is ideally suited to match peak energy needs as maximum sunlight hours generally correspond to peak energy periods when electricity prices are at their highest. This is compared to other renewable energy sources that do not align power generation with peak demand periods.

Finally, solar power products come in a variety of sizes and configurations and can be deployed at the point of consumption – on the roof of a house or office – which means they don’t require additional infrastructure to deliver power directly to the consumer.

NGP&E. The cost of solar equipment is constantly falling. What new developments have there been in solar energy R&D to bring its widespread uptake a step closer to reality?

AH. The majority of R&D efforts at Trina Solar and other solar power companies are concentrated on reducing manufacturing costs and improving the performance of the solar power product. At Trina Solar, for example, we are working on increasing the size of ingots to raise productivity in the wafer production plant, increasing the proportion of reclaimable silicon to lower material costs, and reducing the thickness of the silicon wafers to 200 micron thickness from 220 micron thickness to improve overall efficiency and lower costs.

As it stands, we have developed a proprietary method for utilizing up to 80 percent reclaimable silicon – broken wafers, tops and tails and pot scrap – in our manufacturing process. As a result, we boast one of the lowest silicon use per watt ratio in the industry, at approximately 8.0 grams/watt compared to an industry average of 9.5. Our R&D team works closely with our customers to improve our solar module and system designs, including integrating construction elements with our modules for use in system integration projects that require our modules to be built for certain applications, such as roof tiles and glass panels.

As we ramp up our solar cell production facility in 2007, we are also developing process technology to make full use of conversion efficiency advantages of monocrystalline silicon over other solar power technologies while simultaneously reducing manufacturing costs. We expect that our vertically integrated manufacturing capabilities will also enable us to realize additional technical and cost synergies. We have a technology committee that meets regularly to review current development progress and identify new research and development areas of focus. The committee is spearheaded by senior management and includes both employees and external solar power experts. We also cooperate with our peers in the solar power industry. In fact, we recently announced a deal with Q-Cells, the world’s second largest PV cell manufacturer, to exchange technical know-how in connection with the ongoing ramp up of our solar cell production facility.

NGP&E. What policy frameworks currently exist to help solar adoption? Are these sufficient? How much room is there for improvement?

AH. Several governments around the world have implemented policy initiatives to accelerate the development and adoption of solar power. In fact, according to a recent study by Photon Consulting, government support globally for solar power will increase from $1.8 billion in 2005 to $7.2 billion in 2008. Some of these incentives include capital cost rebates, feed-in tariffs and tax credits. These policies are already in place in countries like Germany, Spain and Italy and are finding support in France, China, Japan and the U.S. as well.

NGP&E. What does the future hold with regards to the solar energy market? Are there any trends (technological, regulatory, market) on the horizon that you think will impact on the sector?

AH. Well, the growth in demand for solar power has been driven by several mega-trends, including concern for the environment and the risks associated with climate change, a desire to diversify our energy sources and reduce our dependence on fossil fuels, and improved price performance and understanding about the benefits of solar energy. We expect these trends will continue.

Over the past five years, worldwide installations of solar power systems has grown an average of 43 percent per year, from 254MW in 2000 to 1460MW in 2005, and the value of global solar power system installations has grown from $2 billion to $9.8 billion, according to Solarbuzz. As governments continue to adopt and enhance incentives for solar power and solar power companies continue to enhance the efficiency and reduce the costs of their products, analysts forecast solar PV module production to grow at an annual rate of 43.7 percent from 2005-2010 to reach 10.4GW per year. Solar power industry revenue is likewise expected to reach $7.2 billion by the year 2010.

At Trina Solar, our long-term goal is to achieve grid parity, when the cost of electricity purchased from conventional sources equals the cost of electricity generated from solar power. We believe that solar power manufacturers that have the ability to achieve grid parity – by streamlining manufacturing and lowering production costs – will have a distinct advantage compared to other suppliers, including the ability to sell into governments where subsidies are minimal.

We are doing this by pursuing a strategy of total vertical integration – manufacturing all the elements of the solar value chain from ingots and wafers to solar modules as a means to ensure quality control and reduce costs year after year. We recently went public on the New York Stock Exchange in the US raising $107 million partly to fund the construction of our cell facility – the final step in our strategy toward total vertical integration. Our American depositary shares were priced at $18.50, above the anticipated range of $15.30-15.50. With the proceeds from the public offering, we are also rapidly expanding capacity from 45MW capacity in 2006 to 150MW at the end of 2007 and 350MW by the end of 2008. Today, we are among the most well-known brands in the international solar power market, especially in Europe were the Trina Solar brand is well-recognized among top distributors and photovoltaic products integrators.

In short, we look forward to continuing to grow the company and the Trina Solar brand to become one of the leading solar power products companies in the world.

Infographic:
$7.2 billion
Expected solar power industry revenue by 2010

“Our long-term goal is to achieve grid parity, when the cost of electricity purchased from conventional sources equals the cost of electricity generated from solar power”