Ask a venture capitalist about the collapsing green-energy sector, exemplified in the successive bankruptcies of Solyndra and Beacon Power, as well as the downgrading of First Solar, and you'll hear long soliloquies about the collapsing popularity of green-tech/clean-tech initiatives, and the failure to develop sound business plans.
Ask a Libertarian politician the same thing, and be prepared to hear about the inherent evil of federal subsidies and loan guarantees. Ask a globalist, and the person with Asian expertise is bound to tell you how the ability of China to emulate manufacturing processes has doomed the US alternative energy market.
Thin-film photovoltaic modules from First Solar.
These answers all are correct, in part. But ask a designer with a background in either civil engineering or energy electronics, and you'll also hear that much of the boom in energy startups in the past decade has focused too excessively on unique point solutions to problems of solar conversion, point-source storage of transient energy such as wind-farm energy, and other proprietary inventions that look great in demos, but seem to exist in a vacuum. In fact, CNet blogger Martin LaMonica says the problem of scaling up is so ubiquitous, it may even affect the electric vehicle industry.
In one sense, you could say that the Department of Energy's smart grid initiative has been one of the only alternative energy efforts that look to large-scale systems first, but even the smart grid software projects fail to take into account the antiquated state of the nation's energy distribution network. Point solutions for residence or utility companies often fail on several levels. Can the proprietary design really be manufactured in a cost-effective manner? Will its ergonomics fit in known energy subsystems? Can the concept be emulated easily by an Asian company with lower costs of manufacturing?
Startups developing products like solar PV panels or radical flywheels could have stolen practicality lessons from the hardware startups of the last decade. Executives trying to launch semiconductor or OEM system companies in the new millennium automatically faced prejudice from venture backers, who favored software companies following the telecom crash of 2001. Offering a unique chip or consumer device was not good enough to win market favor. Corporate founders had to ask, can this chip be cheaper than alternative solutions? Is it easy to reverse-engineer? Will the functions become obsolete before the market develops?
Manufacturability issues
A friend of mine with decades of experience in solar design attended Solyndra's coming-out party in 2005, and told me off the record that he was impressed by the cylindrical panels based on CIGS thin film the company had designed, "but I was aghast at all the praise and no tough questions at the rollout. The first thing many of us outside the media were thinking was, can you really build these? And where is the protection from having your cost of production undercut? I didn't hear anyone in the press or investment banks voice these concerns."
I don't know the cost history of Solyndra's technology for sure, but I suspect it was developed during a period when a severe shortage of raw polycrystalline silicon existed and many companies were scrambling to build very expensive silicon plants and PV makers were looking for ways to minimize the use of silicon. Fast forward to about 3 years ago and many of the new silicon plants starting coming online about the same time that European solar subsidies began going away and the radical change in supply and demand caused the price of the raw silicon to drop 90%. So Solyndra had just spent a fortune to build a large highly automated plant with a complex manufacturing process that allowed it to use a less expensive raw material and suddenly their less expensive material is now more expensive. Couple that with a complex process and being in the first year of depreciation on a new plant running at very low utilization and their failure was inevitable. The timing of when additional loans were made and when was it obvious that they could not succeed is important if you want to make political points. At one time, they likely looked like a very good bet, then the world shifted. This is why this type of funding is typically done by venture capitalists who are placing big bets on long shots in hopes of making large returns. Many of these fail for many reasons, but enough succeed that venture capitalists continue to look for opportunities. The difference between a venture capitalist and the government is that a venture capitalist is spending his own money and if he places poor bets, he can decide when to back out or when to "double-down" while the government is betting with our money and has a tremendous amount of bureauracy and lacks incentives to agressively monitor / protect its investment. The politcal points are made early on and typically failures are just ignored. The government does have a role to play in fostering front end research for new technologies that are too far off for any but the very largest companies to invest in. As a new technology shows promise, the government should encourage private industry to pick it up and move it forward to commercialization, maybe auctioning the rights in such a way that the government gets a long term percentage of success and early investors get a larger share or some patent-like protection than later investors.
“It just does not make sense to pour millions upon billions into something just because you want it to be true.”
It does once something has been sufficiently politicized… And especially when it is other people’s money, and if it’s being done to pay back those who helped to get the spread-the-money-around-candidate elected.
Tax breaks for GREEN – Solar – Wind – and energy production in general I have no quam with… But stop writing checks with tax collected monies as a way of supporting long shot/no shot/friends of the admin in politicized industries.
The real story with Solyndra is the thief of funds… not that a company making a product that it would have to sell at 3 times the going rate… went under.
Let me repeat that…The real story with Solyndra is the thief of funds… not that a company making a product that it would have to sell at 3 times the going rate… went under.
The story is that the current president, vice-president, and many others high up in this administration were shills for a half-billion dollar misappropriation of… half a billion dollars into a sinking ship and into a stinking crony’s pockets. Even a quick audit would have told the tale…
BTW… within 15 minutes of starting my research on Solyndra when this then pending thief was first announced 2 years ago… Well… let’s just say they never had a chance in 500 million. Their tech was never competitive… It had nothing to do with changing market forces.
All of that when seen in the larger picture of falling panel prices and rising efficiencies… leads to this conclusion… solar panels will do fine. They are here to stay, but we can not force the growth of our home grown manufactures by pouring billions in carelessly spent tax dollars into the pockets of politically selected companies.
A much healthier solar industry will come from hard work… and perhaps with some incentives… Help… Not hand outs.
Sorry you didn't like the article ChrisP, the disparate pieces were in part the result of covering dissimilar companies that were collapsing at the same time. I know the turbine story well since I live in Colorado Springs, and the Avon story you mention is an interesting one too. Many examples of lofty ideas in the Naked City....
This is not a good article. The title, whoever conceived it, is misleading at best. Solyndra is typical of companies that come along all the time. Maybe you remember the company that was going to start manufacturing small wind turbines in Colorado Springs. They'd sold the idiot mayor on the idea that he could use them to power individual street lights and save the city money. Or the NEW Millenium turbine company out of Avon that has conned the governments in Newton and Kansas to build a turbine manufacturing company when he is proposing a VAWT that is totally unproven. Yet another "rooftop" turbine that will not be profitable. Or even the "Hojo generator" being advertised on facebook. Or the "Honeywell" wind generator that doesn't work as well as advertised.
I'd rather you did something about the "Amish" heater genre where innocent people are conned out of $300 or more for something that is no better than a Walmart special for $30.
So now we see some more of the issues that interfere with the success of solar panels. Manufacturing costs and also the toxic chemicals concern. What will be done with the panels at the end of their service life? Actually, it makes more sense to ask about "what can we do to extend the service l9ife of solar panels?" I have not heard much about any wear-out mechanism, so my guess is that the main failure mode is corrosion and failure of the protective medium. On the positive side, there is enough understanding about corrosive failure that panels could be produced today that would last a hundred years without a corrosion caused failure. Of course, such a panel would cost a bit more initially, which would probably lead to a failure in today's market. Failure of the protective media is a bit more complex, but that issue should also be solvable without any new breakthroughs.
The main challenge today is something that I would call "the Wallmart syndrome", meaning that the only product that will sell very well is the one with the cheapest initial purchase price. Product durability and efficiency do not seem to enter into the analysis, so the result is that usually the poorest quality is the one selected.
At that point the business plan may not matter much, and the degree of artificial incentive from the government may only slow the demise of those that are not the cheapest. So probably the best approach would be for the government to step aside and simply enforce truth in marketing. Of course, some sort of standard for product durability could also be a worthwhile assist. Of course, such a standard would have it's own set of concerns and problems.
Perhaps the most serious disconnect between energy issues and the electronic world is the frequent failure by electronics experts to comprehend the realities of electricity as a carrier of energy.
Hence, we have National programs to encourage electric vehicles as if a plugged-in electric motor can draw fuel provided from a plug. Correctly seen, a complete system includes a heat engine driving a generator which connects to drive a motor. The heat engines in central power plants mostly run from 30% to 45% efficient. Thus, the old internal combustion engine (ICE), especially with modern improvements, does not compare so unfavorably to the electric vehicle drive efficiency. It can turn out that the electric vehicle causes more CO2 than the old ICE. With the very cheap basis of electricity being coal, coal prices underpinning electricity costs in general, the general result of moving to electric plug-ins is to make global warming worse.
In the face of this reality, the EPA and DOE seem to have ignored physics when they decreed that the heat lost in the power plant engines need not be counted in calculating MPGE for electric plug-ins. The needed serious critical thinking mentioned here needs to take place on this fundamental point.
@Watashi: I agree with your take on Government Induced Market. It never fails to amaze me how a lawyer with an acute ability to raise campaign money and make neat sounding speeches is capable of convincing some people that they really are capable of anything beyond raising campaign funds and making neat sounding speeches.
It really does not matter how badly we want somethings to be true if the math, science and economics dictate that it is false. As someone else commented in this thread, "perhaps someday..." It just does not make sense to pour millions upon billions into something just because you want it to be true.
Venture capital is risky to begin with, but perhaps a little better due diligence and objective engineering advice should be sought. These examples illustrate the danger of speculating on a government induced market. Government, as constituted in the US, is subject to political tides.The 'Green' initiatives today could easily be apostasy in a few short years.
At the end of the day, these companies were going to have to compete in the energy market as it exists today.These failures had no chance of standing on their own given the current state of the art. Whether they were hoping for subsidies or for the government to rig the market; it was not a reliable business proposition.It appears the loan guarantees enticed technologies out of the R&D world that are not quite ready for prime time.
Jeff_A - Wow, those words ought to be set in stone. Strategies are not always transferrable. It reminds me of an article The Economist ran last week, studying the EU-ECB plan for bailing out Greece and Italy in detail. The government of China and various sovereign wealth funds in the Middle East expressed reticence at putting the money into the new European bonds, because the bonds were structured just like Collateralized Debt Obligations from the U.S. mortgage crisis in 2008 - i.e., Greek toxic debt was sliced up, tranched, and hidden in larger Euro-debt. Gee whiz, the new investors didn't like that idea, and CDOs worked so well the first time! As you said, every new market and new design opportunity should be greeted with a completely fresh perspective.
Some of solar manufacturing challenges may be that executives and engineers were successful in other "similar" industries and want to apply the designs and process they know from their last industries to the new design. On the surface it makes sense, the design or process worked before, should work now, it will give us a big head start. I've seen this approach fail in multiple industries because differences between the old industry and the new industry that are not recognized. When those differences are addressed, they may lead to a different solution.
As engineers, we must always be objective about defining design requirements and being open minded about possible solutions once we have acomplete set of requirements.Hang on tight to your problem solving abilities fellow engineers, remember your failures and how you worked through them to success. Be willing to put your greatest past success aside and objectively move forward to address the new challenges.The new challenges won’t be any easier than the set of challenges associated with your greatest success were. Why should any of us think we can get away without new serious critical thinking to address the new issues and challenges at hand, and not just spending a bunch of money trying to prove that because it worked on x it will work on y.
On April 21, NASA launched a novel project, putting into orbit three satellites that employ an off-the-shelf commercial smartphone as the control system.
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