As part of a strategic $300 million equity financing, Nanosolar has added new capital and brought its total amount of funding to date to just below half a billion U.S. dollars.
Last December, we introduced the Nanosolar Utility Panel(TM) to enable solar utility power — i.e. giving utility-scale power producers the solar panel technology to build and operate cost efficient solar power plants.
The tremendous demand for our unique product was matched by the desire to support us in scaling its availability even more rapidly and ambitiously.
Today we are pleased to announce that we have received strategic backing by partners ideally suited to accelerate the implementation of this business — in the form of product supply agreements, strategic collaboration, and equity investments.
As part of the transaction, the boards of directors of AES Corporation (one of the world’s largest power companies), the Carlyle Group, EDF (the world’s largest electric utility), and Energy Capital Partners signed off on investments into Nanosolar through Riverstone Holdings, EDF Renewables, and simultaneously formed AES Solar. A fraction of the oversubscribed Nanosolar equity round also included financial investors such as Lone Pine Capital, the Skoll Foundation, and Pierre Omidyar’s fund as well as returning investors including GLG Partners, Beck Energy, and Conergy founding investor Grazia Equity. The transaction closed in March 2008.
The alliance for solar utility power is the outcome of a year long effort on behalf of our strategic partners examining the solar industry, investigating virtually every solar company on the planet, and conducting one of the most thorough due diligence efforts on our manufacturing operation, our scale-up capabilities, and our readiness for the level of cost efficiency demanded by solar utility power. We are honored to have been selected as the company of choice to partner with by such a distinguished and sophisticated group.
The new capital will allow us to accelerate production expansion for our 430MW San Jose factory and our 620MW Berlin factory. (Earlier, Nanosolar secured a 50% capex subsidy on its Germany based factory.)
The following is one of my favorite charts: How far a car can drive based on either of the following forms of energy, each produced from 100m x 100m (2.5 acres) of land:
How come that biofuel does not really cut it? Electric cars are about four times more energy efficient than fuel based cars. This is because fuel engines mostly creates heat and thus wastes the majority of the energy units available. Combine this with biofuel plants not being very efficient solar energy harvesters relative to semiconductor based solar electricity, and the result is this huge difference.
In other words, it is clear that if the goal is to maximize energy efficiency, the end point to go after is all-electric cars everywhere. Moving all of transportation to all-electric would essentially cut in half our overall energy consumption without compromising on distance to go.
I for one have vowed that the Prius I bought six years ago will have been the last fuel powered car I’d buy in my life. (Given that I may very well own the highest-mileage Prius on the planet, this presumably reflects my confidence in the quality of this vehicle and the near-term readiness of electric car technology…) Presently, it is baking in the sun all day while I’m at work. My future all-electric car would charge up while idling under a solar carport.
U.S. Senator Barbara Boxer and her staff today visited Nanosolar to tour our factory and present us with the U.S. Senate Conservation Champion award. We are honored to be awarded this recognition — thank you very much!
During our meeting with the U.S. Senator, we discussed the importance of getting a Federal RPS right in 2009 and fixing the state level RPS’es.
Getting Renewable Portfolio Standards Right
Renewable Portfolio Standards (RPS) are the politically most digestible administrative framework in the United States for leveling the playing field for green technologies in the energy industry.
But the RPS systems we have in place today at the level of various states are ineffective because they are limited in the following three key ways:
1. They are primarily geared towards large-scale, centralized generation, i.e. power plants of larger than 50MW in size. That’s the old mindset — preferring one 300MW plant over thirty 10MW plants.
But a lot of today’s action and opportunity in renewables is in decentralized 1-10MW generation, including municipal solar power plants and other forms of power generation at the local level. No well-designed RPS should have a built-in bias against small & medium sized power generation.
For instance, in California, we have one policy framework (the California Solar Incentives, CSI) for sub-1MW solar installations, connected locally; and we have an RPS that works for >20MW power generation, connected to transmission lines. In between we have a policy gap for renewable generation of one to twenty MW in size, which is often directly connected into the municipal grid, i.e. without having to use transmission lines:
No federal energy policy should favor big power plants over medium sized ones; and the state level policies should be reworked in this regard too.
Specifically, by avoiding the substantial expense and energy loss associated with transmission infrastructure, small and medium sized power plants have an economic benefit to the public, and this ought to be reflected as a corresponding commercial benefit.
2. They have no teeth. State utilities can simply default on the agreed-upon renewable targets and pay a marginal fee. Without the prospect of a penalty that hurts at least a little bit (e.g. 10-15 cents/kWh of a surcharge) and one that will actually be enforced, the utilities won’t seriously plan on delivering on the agreed-upon objectives, and the more honest approach would be to better cut the whole RPS system. In fact, what is happening today is that utilities commit to a lot of dubious projects, many of which can never make it (e.g. due to lack of transmission) and/or will never make it. If there were real penalties, they’d take a much harder look at how to really deliver on the agreed-upon objectives.
3. A final key element to get right in the next generation of RPS is better transparency and project pipeline predictability. Only a predictable environment will be an investible one. One way of achieving good predictability are standard contracts which the utilities have to accept. The smoke-filled backroom dealing part of the RPS system has to be cleaned up.
As we are busy ramping our operation, we want to recognize achieving a major milestone in solar technology: The solar industry’s first 1 gigawatt (GW) production tool. Here it is:
Most production tools in the solar industry tend to have a 10-30 megawatt (MW) annual production capacity. How is it possible to have a single tool with gigawatt throughput?
This feat is fundamentally enabled through the proprietary nanoparticle ink we have spent so many years developing. It allows us to deliver efficient solar cells (presently up to more than 14%) that are simply printed.
Printing is a simple, fast, and robust coating process that eliminates the need for expensive high-vacuum chambers and the kinds of high-vacuum based deposition techniques sometimes used in industries where there are a lot more $/sqm available for competitive manufacturing cost.
Our 1GW CIGS coater cost $1.65 million. At the 100 feet-per-minute speed shown in the video, that’s an astonishing two orders of magnitude more capital efficient than a high-vacuum process: a twenty times slower high-vacuum tool would have cost about ten times as much.
Plus if we cared to run it even faster, we could. (The same coating technique works in principle for speeds up to 2000 feet-per-minute too. In fact, it turns out the faster we run, the better the coating!)
At Nanosolar, we genuinely believe that meaningful scale for solar will come foremost from utility-scale solar power plants, particularly from municipal solar power plants of 2-10 megawatts (MW) in size. These power plants consist of rows of solar panels mounted onto the ground of free fields at the outskirts of towns and cities, feeding electricity directly into the municipal power grid.
A 2MW municipal solar power plant requires about 10 acres of land to serve a city of 1,000 homes — that’s acreage generally easily available at the outskirts of any city of such size in even the most developed countries. With a solar power plant in each of several hundred cities, a Gigawatt of power is delivered locally to where it is needed, in a digestible size.
In a municipal solar power plant, solar panels are mounted onto rails above the ground so that grass and flowers can continue to flourish in between and below the rows of panels. Care is taken that sufficient amounts of rainwater can drop through between adjoining panels so that the flowers and organisms below are not starved. In fact, in dry regions, the solar panels even benefit the ecosystem by increasing the moisture level in the soil.
Municipal solar power plants integrate very naturally into the existing landscape as well as the existing electricity grid. By feeding power directly into the (local, medium-voltage) distribution grid, they avoid the (long-haul, high-voltage) transmission grid which is expensive to build and expand, and also avoid the expense of a substation for down-transforming transmission voltage to municipal voltage. It’s a form of distributed generation, but at the wholesale level, and it has been determined (using CPUC methodolgy and data) that there is a locational benefit of about 35% over wholesale power cost. These are real dollars that providers of wholesale distributed power and rate payers can split in a win-win cost advantage.
In any region with a decent amount of sunshine, the most economic way of reliably providing municipal power during the day is through a municipal solar power plant. That’s because municipal solar power plants combine the locational benefit of avoided transmission with the time-of-day benefit of solar and the economics of scale.
Ground-mounted solar power plants are installed in industrially streamlined ways, with specialized tractors deploying standardized substructure components according to standard system block designs to achieve optimal cost efficiency.
While rooftops are also a good application for solar panels, it is a business that’s difficult to scale rapidly in a truly meaningful way. Crawling onto rooftops and mounting solar panels in compliance with building codes is a fundamentally less efficient proposition.
In fact, municipal solar power plants are one of the most rapidly deployable forms of power. While it takes 10-15 years to get a new coal plant done (if ever given the carbon risk) or 5 years for a concentrating solar-thermal plant (also requiring a connection to the transmission grid), a municipal solar plant can be completed in as little as 12 months.
Furthermore, a unique feature of photovoltaic power plants is that they utilize power inverter electronics with increasingly intelligent features. Enlightened utilities around the world are now identifying them as a very good way to manage and improve grid power quality. This is especially a point of pain at the outer branches of the electric grid where power quality is hard to manage otherwise. (Any U.S. utility executive who is concerned about the new world of local power but desires to learn more should join this trip.)
Municipal solar power plants offer an attractive level of efficiency, scale, and benefit in solar. This is not yet well known to the public in the United States and in California, where this segment has been stifled by the policy gap that exists in California between the state’s Renewable Portfolio Standard (geared towards >20 MW systems) and the California Solar Incentives (designed for <1 MW systems).
But towns and cities throughout Europe and Asia have already proven the concept, and many — increasingly entire counties — are now implementing plans to go to 100% renewable energy based on a mix of solar and biofuels. It works, it is economic, and it is possible now. It is a silent revolution going on that the press rarely reports about.
[A nice exception is an article today in our local newspaper -- "Local communities reach for power over energy" (SF Chronicle) -- describing how Marin County, California is wrestling with going for local renewable power. We salute their effort. It is well timed, smart, and shows a lot of foresight. They are on the right track based on what we see happening in our own industry and in energy overall. In a few years, they will have less expensive power than is available in the rest of PG&E territory.]
The amount of activity going on behind the scenes in readying technologies, sites, and financing for such endeavors is tremendous, and this will become very visible to the public in many locations in the United States in 2010. There is a reason why one of the world’s largest power producers invested in Nanosolar.
But now is the time for cities and counties to lay the adminstrative foundation for having their own power, 100% renewable, if they care to make a difference by then.
Update 4/30: Thank you for the hundreds of comments we have received to this posting via email. Our team has read and digested every single of them. To those of you who are disappointed that our first product is not for residential homeowners, we can reassure you that we do have a fabulous residential solution on our near-term roadmap — one that will bring the utility scale economics of Nanosolar Utility Panel technology to homes everywhere, and completely redefine how residential solar is done.
We have entered a strategic partnership with EDF Renewables. EDF is the world’s largest electric utility. Here’s the EDF press release, which has all the info.
And yes: California is a big target of this partnership of ours.
After five years of product development — including aggressively pipelined science, research and development, manufacturing process development, product testing, manufacturing engineering and tool development, and factory construction — we now have shipped our first product, the Nanosolar Utility Panel™.
We are grateful to everyone who supported us through all these years and the many occasions where there appeared to be mile-high concrete walls in our path; the unusual intensity and creativity of our team deserves all the credit for achieving this major milestone today.
Our product is defining in more ways I can enumerate here but includes:
- the world’s first commercial solar panel based on a printed solar cell;
- the world’s first thin-film solar cell with a back-contact;
- the world’s lowest-cost solar panel – which we believe will make us the first company capable of profitably selling solar panels for as little as $.99/Watt;
- the world’s highest-current thin-film solar panel – delivering five times the current of any other thin-film panel on the market today and thus simplifying system deployment;
- an intensely systems-optimized product with the lowest balance-of-system cost of any thin-film panel – due to innovations in design we have included.
Today we are announcing that we have begun shipping panels for freefield deployment in Eastern Germany and that the first Megawatt of our panels will go into a power plant installation there.
As far as the first three of our commercial panels are concerned: Panel #1 will remain at Nanosolar for exhibit. Panel #2 can be purchased by you in an auction on eBay starting today. Panel #3 has been donated to the Tech Museum in San Jose.
Update 12/21: eBay cancelled our auction — due to its charitable angle! Our eBay auction started at 99 cents for the panel and quickly reached more than $13,000.00, with the highest bid submitted at $70,000 when eBay cancelled the auction because we had declared the proceeds would be used for charitable purpose. We regret that eBay deleted our auction due to the promised charitable use of the proceeds. Our Director of Legal spent much of the afternoon on the phone with eBay trying to reinstate the auction — but they have their rules. Upon review we decided this isn’t a battle we care to fight more than an afternoon, so it’s back to building cells and panels for us. In other words, Panel #2 will stay at Nanosolar for now (no auction); thank you to everyone for participating in our auction; and most importantly: HAPPY HOLIDAYS.
Popular Science magazine — which many of us read when we were little — just came out with its annual innovation awards.
Our solar electricity technology was named the top Innovation of the Year 2007. Ranked #1 overall, we even came out ahead of the Apple iPhone and many other great technologies (and companies with much larger marketing budgets, in particular).
It’s great to see our hard work — and greentech in general — recognized so enthusiastically! Now we have no choice but to make sure that there’s going to be a solar panel on every building in the future.
A few words to answer this very frequently asked question:
We are presently a private company and therefore have no stock symbol and no shares available for purchase by the public. In fact, in the past, we have very carefully controlled our selection of investors, and it has been very good for us as a company to work with such a distinguished group of long-term committed stakeholders.
As to the question of when we might offer shares to the public, our board of directors has not yet had a chance to discuss this; we’re simply too focused on product development and company building right now.
In general, note that silicon cell manufacturers (whether based on crystalline silicon or equally capital-intense vacuum-deposited silicon thin films) require so much capital per megawatt (MW) of production capacity that they have to go public as quickly as they can. Nanosolar is different: Our technology is extremely capital efficient and has a comparatively low cost structure.
The inside of our completed factory is not open to the public, due to all the proprietary things we have in there on every other square inch. However, here’s a photo from a bit earlier, which shows the first part of one of our roll-to-roll processing tools coming together. Many of our production tools are quite long — e.g. 100 feet. This maximizes the yield, throughput, and overall economics of the mile-long rolls of solar cell foil processed by the tool.
In addition to raw speed, a key advantage of roll-to-roll manufacturing is that after the first few feet of a roll is processed, it settles into a steady state which applies to the rest of the entire roll, resulting in very uniform deposition process parameters applied to essentially the entire substrate. This is much better than possible with processing of wafers or glass plates, where the fact that they have to be moved into and out of each process station introduces start-up and move-out process variabilities (and cycle time cost) to the substrate. Edge effects are also greatly minimized in roll processing (whereas processing glass plates or wafers requires much work and capital dealing with uniformity issues at the edges of the substrate).
I am honored to be able to confirm that Nanosolar has been selected — and completed negotiation — for a substantial funding award as part of the high-profile Solar America Initiative.
The competition was stiff and included every single significant solar company in this country, including SunPower, First Solar, General Electric, etc. So we are proud that the U.S. Department of Energy (DoE) has decided to award us the largest net amount any company receives as part of the Solar America Initiative.
This award from the DoE comes at a timely junction of commercial acceleration for our company. It brings the DoE in alignment with the private investment community which has long recognized the distinctly superior potential of our technology.
We will do our best to deliver truly outstanding results for every dollar received, commensurate with our leading position of selection.
That’s a difficult question. We value the tens of thousands of inquiries we have received – however, our product is already allocated in advance.
As we are about to inaugurate our first commercial manufacturing facility, I want to say a few words early on to set general expectations about how you are and are not going to see our product appear in the market:
Our product will be introduced into the market through a very small group of the most distinguished wholesalers that exist.
For instance, our first 100,000 panels are set to go into a very small number of private commercial installations where we deploy them in fenced or otherwise secured environments.
Focusing on a small number of non-public deployments simply makes everything easier for us to manage initially. Plus, this also has the benefit of allowing us to secure an additional period of proprietary protection for all of our new product features.
The remainder of our 2008 product allocations are spoken for as well (for quite some time, in fact). This means that if your local system integrator has not secured any quantities from us, which typically will be the case, the next opportunity will be in 2009.
We are happy to notify you when our products become available through distribution partners in your region. If you haven’t done so already, please make sure to sign up here to receive notification about this.
We are working hard to expand production as fast as possible and to make our breakthrough panels available to the broadest group possible. 2008 will be a big year of investment in additional equipment for us. We will continue to ramp up capacity at a rate that is unprecedented for this industry, so that soon we will be able to address the pent-up demand more broadly.
In March 2006, our research and development team managed for the first time to produce solar cells with 14% efficiency based on a low-cost nanoparticle ink printing process.
The best cell measured had a 14.5% efficiency — a world record for a printed CIGS cell, and, in fact, the most efficient printed solar cell of any kind, ever. Congrats to our science team for this transformational achievement!
The achievement was also subsequently published in a peer-reviewed scientific publication. [The National Renewable Energy Laboratory (NREL) certified these efficiencies in August 2006.]
