Recharge News

February 2013
By Karl-Erik Stromstra
 

The groSolar boss tells Karl-Erik Stromsta why his company got out of the residential PV market, and why the Obama administration had no business backing Solyndra

 It’s been a wild couple of years for the PV industry. How do things look for US integrators like groSolar going forward?
Over the last couple of years, energy prices have gone down a bit in the US due to the recession and cheap natural gas coming on line. But if you take a medium-term view, energy prices are going to start going back up, and meanwhile solar prices are going to continue coming down. Plus, we’re getting better at it. We can do projects more quickly. We know how to drive cost out. And everything related to “soft costs” — whether it’s working with utilities, or permitting, or inspections — is getting better and more efficient as everyone involved gets used to solar energy.

What’s one of the remaining headaches?
Somewhere like Germany has more uniform rules for supporting and regulating solar installations. But in the US, you often have a totally different set of rules from one county to the next. In one place the cost of a building permit might be nominal — a few hundred dollars — and somewhere else it might be $50,000 or $100,000. Often even the local officials don’t know the cost — a lot of places have never permitted a solar project before. So it’s still an industry in adolescence. But we’re optimistic because all the important trends are very clearly moving in the right direction.

What are your views on the Solyndra debacle? 
Solyndra’s basic problem was they bet on a technology that relied on silicon being expensive. But then that silicon... got really cheap really fast. Solyndra led to a lot of people in this country saying that solar energy is not effective. No. All Solyndra showed is that their technology couldn’t compete. People like to draw conclusions that fit their politics sometimes.

Was the government wrong to support Solyndra?
My view is that if the government is going to support renewables, they shouldn’t do it by betting on individual manufacturers. They should either use that money to create incentives — a more portfolio-based approach — or by supporting basic research.

How have cheaper crystalline-silicon modules changed the game?
It helps in the sense that it allows us to deliver electricity at a cheaper price. But the risk is that there’s so much pressure on the manufacturers, some of them start cutting corners. You can empathise with that temptation. But for someone like us, it means we have to be extra careful. Every project we’ve built, we could have bought modules for less. You don’t want to comprise on quality.

In 2011, groSolar sold its residential PV business to SolarCity [which has just launched an initial public offering] to focus on larger projects of 1-10MW. Why?
Residential is a very different, very labour-intensive market. We’re more comfortable working in the commercial, industrial and government spaces; it’s more of a consultative style, rather than spending time trying to get homeowners’ attention, dropping postcards in mailboxes. A 5kW system is a roughly $20,000 project, so somehow you have to acquire that customer, assess his or her site, get all the permits and build it — and to do that profitably is really hard.

What’s the future for the US residential market?
What we’ve seen is that sometimes it’s the little guys who do well. They’re big fish in their town, which means they’re usually dealing with just one utility, they’re used to getting permits locally, they’re getting a lot of referrals by word of mouth. What SolarCity is trying to do is get scale nationally. The challenge for them is when you have crews doing residential installations, they need to be within a 50-mile [80km] radius — you can’t have them spending two hours in their cars every morning. So then maybe you start using subcontractors, but can you still maintain the quality? SolarCity has lost a lot of money to date. It’s a long-term game they’re playing. But it’s a big commitment. Another possibility is that we’re now seeing home security-alarm companies moving into the business. Maybe they have a million or so customers on their system, and that relationship is already there. That’s interesting

Source: Recharge News