In 2010, solar power was less than 0.1% of the U.S. electricity mix, and the nation was witness to a number of European countries heavily investing in solar. The U.S. Department of Energy’s SunShot Initiative was launched that same year with the objective of making the cost of solar electricity competitive with other generation sources by 2020, without subsidies. Equivalent to $1.00/W at the utility scale, the federal office’s goal required what seemed to be impossible: innovation and collaboration across all parts of the solar industry value chain. Lofty as it was, SunShot laid out a clear path to achieving these goals and charged ahead, focused on its newly crafted mission.
Dr. Charlie Gay
Funding a range of research projects, from improving solar energy efficiency and reliability to grid integration and ubiquitous adoption, the office helped put into motion new technologies and processes that chip away at solar costs. Over the course of six years and hundreds of research partnerships, SunShot investments transformed the “going solar” process, reducing the time it takes to install and connect to the grid and dropping the levelized cost of energy by 50%.
Seven years later, the solar industry has met SunShot’s 2020 utility-scale cost target for photovoltaics (PV) – $0.06/kWh – three years ahead of schedule. While the industry could pause to celebrate this major milestone, the path to reaching SunShot’s remaining 2020 goals for commercial and residential PV, as well as concentrating solar power (CSP), is an uphill climb.
As we push toward 2020, SunShot will continue to focus on early-stage research and development to make solar more affordable, durable and efficient. Through SunShot’s investments and strategic partnerships, the solar industry has crafted a solid foundation that will enable it to reach for SunShot’s 2020 goals and beyond.
Building Blocks for Success: The Road to 2020
SunShot’s targeted research and development investments have played a significant role in developing commercially viable solar technologies. Its call for industry-wide, collaborative partnerships has helped to galvanize cost reduction initiatives and shape the industry. Through its competitive awards, SunShot has been able to strategically channel resources to address high-need areas and build a foundation for reaching the sharply defined 2020 goals.
A Steady Drumbeat of Industry Innovation
SunShot funds transformative technology solutions and advanced research and development efforts to accelerate solar power cost reduction. The long-term research it funds has identified a portfolio of opportunities to make incremental changes in solar electric generation and grid integration. This research requires steadfast support and persistence – sometimes the return on investment might be a decade away. The private sector isn’t in a position to take on early-stage research, and federal support is needed to make systematic progress in the quest for new pathways to lower cost.
SunShot-funded projects at the national labs have contributed to more than half of solar cell efficiency records, including one of the most efficient solar cells ever created. In 2014, the National Renewable Energy Laboratory (NREL) designed and developed a four-junction cell using metamorphic layers to account for strain induced mismatched lattice constants that achieved a world record of 45.7% efficiency. SunShot’s PV research has also inspired the use of new module materials and designs and even illuminated new electro-optical information at the basic device level. Research at the SLAC National Accelerator Laboratory used X-rays to better understand the contact formation of a solar cell, revealing foundational knowledge about the interface between the semiconductor and conductor that previously could only be empirically optimized. SunShot’s continued focus on improving solar module materials ensures that the industry has options for expanding lifetime and increasing reliability.
Targeting High-Risk, High-Reward Solutions
SunShot also funds technology solutions that could generate high-impact results in five years or less. By funding technologies with near-term commercialization prospects, SunShot enables companies to move more rapidly from experimental validation to scale-up. Many businesses do not have access to the capital required to undertake these projects, and often the work needed to accelerate these technologies far exceeds the risk tolerance of venture capitalists. SunShot funds have played an essential role in enabling a diversity of innovations to be primed for private sector support.
One company for example, 1366 Technologies, has been at the forefront of improving silicon wafer manufacturing, which traditionally wastes a lot of silicon during cutting operations. Through SunShot’s project management approach, which requires companies to meet aggressive performance metrics to receive continued support, 1366 Technologies was able to develop its efficient kerfless process that reduces the cost of silicon wafer manufacturing by half. Another example, Genability, was funded to create an algorithm that instantly determines how much a customer could save over time, after accounting for the upfront costs, by switching to solar, ensuring that a realistic set of expectations can be met. The software is more than 99.5% accurate, and business proposals built upon the analyses are used by nine out of 10 top U.S. residential solar installers. Overall, companies that have participated in the office’s successful Incubator program have generated more than $34.1 billion in follow-on funding for start-ups and entrepreneurs from over $158 million in public investment.
Eliminating Market Barriers to Reach 2020 Goals
Solar is now more affordable than ever for homeowners and commercial businesses, but to reach the program’s residential solar goal of $0.10/kWh and commercial goal of $0.08/kWh by 2020, there’s still a lot more work that needs to be done. While the cost of modules has decreased dramatically, more daunting challenges facing the industry include helping customers find the information they need, obtain financing, and finalize connection of the power system to the grid. In order to continue to reduce costs and incentivize adoption in emerging markets, increased coordination with local and municipal governments, expanded financing sources, and data transparency are vital. One study from our On the Path to SunShot report series found that new financial instruments could cut the cost of solar by 30% to 60%, showing there’s still a lot of room for improvement.
Many Americans don’t have access to rooftop solar because they don’t own their homes or they live in multi-storied apartments. To help achieve its 2020 solar goals and improve accessibility, SunShot launched the Solar in Your Community Challenge to incentivize teams across the country to work together to expand options for multiple stakeholder groups, including low- to middle-income Americans, nonprofits and tribes. Teams are encouraged to create scalable and replicable models that explore new financial models and program implementation structures that make it easier to go solar. With over 160 teams at work in 40 states and the District of Columbia, the prize competition is already empowering Americans who haven’t been able to take advantage of the booming solar market to seriously consider solar for the first time.
SunShot is also working to improve solar data transparency with its Orange Button program. Through a collaborative industry-wide effort to standardize solar datasets all along the value chain, this program facilitates data exchanges and interchangeability while simplifying financial transactions. At the commercial and utility-scale levels, this work is critical for bridging the gap between the solar industry and financing sources, building investor confidence, and lowering the cost of capital. Because these soft costs account for over half of the system cost, improving transparency and standardizing financial transactions can lead to significant savings. The implications for overcoming market barriers to reach the 2020 goals couldn’t be greater. Increases in market size enable industrial-scale solar, which further lowers cost.
A New Vision for Solar: America in 2030
The past seven years have bolstered the U.S. solar industry, which is quickly building up technical expertise and local capacity to meet the high demand for solar. In spring 2016, as the solar industry surpassed its millionth solar installation, it became clear that the once-nascent industry is now a thriving economic force with installations in all 50 states, employing over 260,000 workers. SunShot’s focus on cost reduction and innovations has established a strong foundation and enabled the industry to meet SunShot’s 2020 utility-scale cost target.
The solar industry has outgrown its own road map, and it is time for a new challenge that can significantly increase solar’s impact. In late 2016, SunShot announced new 2030 goals for utility, commercial and residential solar – $0.03/kWh, $0.04/kWh and $0.05/kWh, respectively.
At $0.03/kWh, the levelized cost of electricity from utility-scale solar would be reduced by an additional 50% by 2030. This would make solar one of the least expensive power generation options, resulting in further consumer adoption. Because this scenario would also require the industry to address grid integration challenges, achieving this goal would further America’s resilient and reliable energy future, powered by American natural resources.
Rocketing to 2030
Already, SunShot-funded PV research is working toward the 2030 targets. Projects at universities across the country and the Energy Department’s national labs are focusing on increasing module efficiency and durability. There are a variety of ways for the industry to achieve $0.03/kWh for utility-scale solar, but each pathway requires significant improvements in module efficiency, system costs and life span. Ultimately, a mix of cost- and performance-improvement factors enables a variety of realistic paths to $0.03/kWh.
In addition, improvements are needed to enhance the capacity and resilience of our current electricity grid. In this 2030 scenario, hundreds of gigawatts of solar generation could enter the grid in varying amounts and times throughout the day. In order to integrate large amounts of solar onto the grid, strengthening the grid’s capabilities and flexibility will remain an important challenge over the next decade. New technologies like storage, inverters with advanced communication and cybersecurity capabilities, and real-time sensing and control systems for the grid will be needed.
SunShot is currently working with utility partners to test and troubleshoot integrated PV and energy storage solutions that are scalable, secure, reliable and cost-effective. Already, Austin Energy has created a grid management tool that incorporates storage and enables the utility to divert solar resources on the grid to storage facilities so that it can use the power whenever it is needed. The utility plans to create a template for this work, helping other utilities across the country emulate its efforts and optimize their solar resources. SunShot is also working with national labs like NREL to develop the tools and technologies needed for grid operators to maintain control when solar penetration grows. One project is exploring the use of virtual oscillator controls on inverters, using sound waves to synchronize inverters and mimic the inertia created by traditional generation sources.
Every day, researchers across the country work to make SunShot’s vision a reality. The innovations that we’re funding today will have a major impact on our ability to reach these goals. Our office helps to ensure that the solar industry has a pipeline of relevant knowledge, transformative technology solutions, and human resources to meet the rapidly growing demands of electricity users around the country. The exceptional research we support and partnerships created along the way will be critical to meeting these goals and changing our energy future.
Dr. Charlie Gay is director of the U.S. Department of Energy’s SunShot Initiative.
