The Future of Solar Energy Looks Bright (No, Really)

Solar power is one of those things that’s always just around the corner. Just a few more technical advances over here, and a little government help over there, and we’ll have solved all our energy and pollution problems once and for all. It seems like we’ve been hearing that for 30 years now.

So, at the risk of ridicule, I’m here to tell you that widespread use of solar power is just around the corner. Rooftops across California will be turned into power plants by the hundreds of thousands. The L.A. Department of Water & Power, now reeling from a radical cost-cutting proposal, will be a national leader.

And with a little luck, ambition and good policymaking, Los Angeles will be the center of a major new industry.

OK, I admit, I may just be suffering the effects of a little brainwashing after attending a conference here last week called Utility PV Experience. It’s the event where the small cadre of utility industry types who are interested in “renewables” in general and photovoltaics, or “PV,” in particular come to trade notes. Chastened by years of unfulfilled promises, they err toward the modest in their predictions.

But I have to say I was startled by just how close photovoltaic solar cells--slabs of treated silicon that turn sunlight directly into electricity--are to being an economically competitive source of power. And that’s without figuring in a few minor side benefits, like prevention of global warming.

At first blush, the numbers don’t really look all that promising. Price comparisons for electricity are a little tricky, since there are wide variations in the cost and the price of current sources, but roughly speaking it still costs at least three times as much to produce electricity from PV cells as from conventional domestic power sources.

That sounds like a huge differential. But in many parts of the world, solar cells compete not with the local electric grid but with nothing at all. Because they can be put anywhere, require virtually no maintenance and last for decades, PV systems are rapidly becoming a major power source in many parts of the developing world.

In Europe and Japan, moreover, energy costs are far higher than in the United States, sometimes three to four times higher. Thus gray, cloudy Germany is a leader in PV power. (That was my first clue that sunny SoCal must be missing something.)

Even in the United States, land of ubiquitous low-cost energy, there are lots of places where it’s hard to string power lines. People living “off the grid” in the desert or the north woods, or telephone companies looking to power highway call boxes or remote cellular transmission sites, for example, are customers for PV too.

This is important, because these kinds of applications have over the last decade created a robust solar cell industry, one that officials say is growing 15% to 20% per year and now has sales of about $1 billion annually.

While solar power was once synonymous with dubious tax credits and other kinds of government subsidies, it’s now a real business. To cite just one example, industry pioneer Siemens Solar--formerly Arco Solar--now employs 300 people at its factory in Camarillo and is in the midst of an expansion that will increase capacity by 50%.

All of this is crucial, because volume production promises to have an immense impact on cost. The processes for producing solar cells are in many ways similar to those used for making computer chips: Silicon ingots are sliced into thin wafers, “doped” with other chemicals, and laced with a conducting metal to draw off the power.

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High volume makes it possible to transform an artisanal process into a mass-production one, bringing costs down substantially. Thomas Vonderhaar, vice president of BP Solar--which is ramping up production at a factory in Fairfield, Calif.--says the costs have declined by seven to eight times over the last two decades.

Some advances on the basic technology are also bringing costs down. A new type of cell known as “thin film,” which spreads a very thin sheet of active material on a piece of glass, promises to be much cheaper to produce, though it’s less efficient than silicon. Some big companies, notably Enron, believe thin film will be cheap enough to build large solar-power-generating plants that will be cost-competitive with other types of fuel.

Entrepreneurs are getting into the game too. A company called Evergreen Solar in Waltham, Mass., for example, is using technology licensed from an MIT professor to produce low-cost solar panels with a novel liquid silicon process.

So what does all this mean for the regular local power user? Consider a program that’s been underway since 1993 at the Sacramento Municipal Utility District, the second-largest municipal utility in California. Under a program called PV Pioneers, SMUD has installed rooftop PV systems on 420 houses, with participating residents paying a $4-a-month surcharge.

The systems are connected to the power grid, so when there’s no energy coming from the roof--at night, for example--the customer draws from the grid. During the middle of the day in the summer, the rooftop systems produce a surplus and send it back to the grid--just at the time the utility needs it most.

SMUD subsidizes the effort through its Public Goods program, and the federal Department of Energy--which is spearheading a national effort called Million Solar Roofs--kicks in about 15% of the cost. Despite the surcharge, there are many more interested customers than available systems.

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Under the next phase of the program, homeowners will actually own the system and sell power back to SMUD; Donald Osborne, supervisor of the program, says it might cost customers $10 to $15 more per month than regular grid power.

What’s remarkable is how fast costs have declined in the Sacramento program. When it began in 1993, the effective cost of the power over the life of the system was about 23 cents per kilowatt-hour.

By last year it was down to 17 cents. Under contracts SMUD has signed for the next phase, the cost will be down to 8 or 9 cents by 2002--which is competitive at retail with other sources. The key equipment vendors will also build plants in Sacramento employing 140 to 280 people.

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All of this is directly relevant to Los Angeles because S. David Freeman, the new general manager of DWP, was head of SMUD when the program was launched there. “When I look out my window and see rooftops, I see power plant sites,” he said last week.

DWP, he said, will soon launch “a significant rooftop solar program” modeled on the Sacramento effort, though details have not yet been worked out.

That might seem like an extravagance for a utility in the midst of a dramatic restructuring, with Freeman seeking to cut 2,000 jobs. But the subsidy would come from the state-mandated Public Goods funds.

As cost comes down--and as people start building solar panels into their roofs and financing them as part of their mortgages--the need for a subsidy would diminish. Freeman envisions 100,000 solar rooftops by 2010.

All of that would give a big boost to the solar industry here, bringing prices down even more and helping it compete in fast-growing international markets.

Utilities have often been seen as the enemy of renewable energy, but in the new era of electric deregulation, they’ll need to count on innovation and cultivation of customer relations--rather than monopoly control--if they’re to prosper.

The plethora of new choices and falling prices that deregulation will bring means that PV will have to live up to its cost promises if it’s to become a major factor. But all indications are that customers love everything about PV power and will even pay a little more for it.

Who says we can’t have clean air, a cool Earth, and plenty of power too?

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Jonathan Weber (jonathan.weber@latimes.com) is editor of The Cutting Edge.