Solar City's New PV Module Hits World Record

SolarCity has quickly moved from buying late-stage solar module startup Silevo a year ago to claiming production of "the world’s most efficient rooftop solar panel, with a module efficiency exceeding 22 percent."

While 22 percent may only be marginally better than SunPower's high-efficiency cell, the real breakthrough is that Silevo's manufacturing process produces solar panels at a lower cost than the inefficient commodity panels it buys from the Chinese, squeezing more electricity out of the same square footage (see the press release).

“You’re talking about a 40 percent increase in efficiency at a lower cost,” said Peter Rive, SolarCity co-founder and CTO. “We have to get solar energy to be cheaper than natural gas or coal, and these breakthroughs get us there.”

While SolarCity’s goal is to eventually hit 24 percent, 26.4 percent is possible with ground-mounted and tilted flat roof systems due to the technology’s bifacial nature, which means it can absorb sunlight from both sides of the panel.

New architecture

SolarCity will begin producing the first modules in small quantities this month at its 100 MW pilot facility in Fremont, California, but the vast majority of new solar panels will ultimately pour out of SolarCity’s 1 GW plant in Buffalo, New York.

SolarCity wants to produce 9,000-10,000 solar panels each day, which use conventional silicon with a second thin film silicon and a layer of a semiconductor oxide. The hybrid solar-cell design allows increased temperature tolerance and higher efficiency.

Perhaps just as significantly, the company said that the new solar cell doesn’t use silver, which eliminates the use of costly silver pastes that traditional c-Si device manufacturers rely on for electrodes, typically the second highest-priced material in a module after silicon itself. Instead, the Silevo process uses a low resistivity copper-based metalization scheme, leaving it immune to silver’s increasing cost issue in the marketplace, while capturing the performance advantages of copper.

Going vertical

By acquiring Silevo, SolarCity became one of four “vertically integrated” solar companies in the US, which helps them keep costs down as well. The Musk solar mafia says they're committed to controlling every piece of the solar business, from manufacturing to balance of systems to installation and financing.

To that end, SolarCity has been steadily moving upstream, earlier snagging the racking company Zep Solar for $158 million.

Buffalo just the beginning

Solar City will achieve complete verticality once it finishes building its first plant in Buffalo, New York, just in time to surf solar demand as it exponentially swells in the US. In 2008, the nation had 1.1 gigawatts of PV-produced power; by the end of 2014 it had 18.3 gigawatts. Last year, homeowners, businesses, and energy companies added another 6.2 gigawatts, and they're expected to install another eight gigawatts this year.

For the first time, residential solar (SolarCity's meat and potatoes) grew more than commercial and utility solar in 2014. Analysts forecast it will the biggest solar sector after 2017.

SolarCity's revenue doubled from 2012 to 2014 as its innovative leasing program proved attractive for homeowners - especially in locations with high electricity rates and lots of sunshine, such as California.

Musk believes that Silevo's combination of higher volume and increased efficiency will “have a dramatic impact and be able to compete on an unsubsidized basis with the fossilized grid." 

“The crazy thing is that the gigawatt plant will almost be a pilot,” said Musk, who also hinted at adding battery storage production to the plans. Musk and Lyndon Rive said that 10 gigawatts of production capacity could feasibly be in the works, assuming the company grows the way they think it will.

“Our aspiration is to build many more of these factories over time,” says Peter Rive, the chief technology officer, who founded SolarCity with his brother nine years ago (their cousin Elon Musk is the company’s chairman). Rive adds, “We want to create the largest solar facility in the world, never mind the Western Hemisphere.”  SolarCity has already stated that it plans to add “one or more larger plants” with annual production capacity an order of magnitude greater than that of the Buffalo facility.

Essential for survival

Eventually, Rive says, the solar module will have a cost of "mid 50 cents per watt,” which is “essential to making sure our cost structure can survive the loss of the Investment Tax Credit," or ITC. This ultra-efficient solar tech may be necessary for the company to survive. The Investment Tax Credit is a 30 percent federal tax credit for solar systems on residential and commercial properties. It has been enormously successful in growing the solar industry across the country. But it expires on December 31, 2016.

Even if all goes well, the gigafactory might be facing a dramatically different solar-power market. At the end of 2016, the federal tax credit for solar power is due to drop from 30 percent to 10 percent for businesses and to disappear altogether for consumers who buy their own solar panels. By making residential solar power less affordable, the change could be devastating to the industry. And it will come just as the Buffalo factory is ramping up its manufacturing capacity.

Ultimately, SolarCity is not investing in Silevo as part of a short game. Lyndon Rive described the need to think about position in the market over the coming decades, not just over the next few years.

“We can now control the installed cost per kilowatt-hour. If you do that, the market is infinite for the next 30 or 40 years,” said Rive.

Will Musk successfully put all the pieces of his empire together?