Applied Materials is a US company that focuses on its 40-year equipment manufacturing competency to unlock cost reductions and accelerate the march towards peak and grid parity. Robert DeLine, Applied’s Managing Director of Channel Development, talks PES through the process.
PES: Grid parity is the buzz word of 2010. How does your company aid cost competitiveness and how far away do you believe we are from true grid parity?
Robert DeLine: Applied Materials has been making the manufacturing equipment that enables industries to scale and lower costs for over 40 years. For the solar industry, our solar PV capital equipment increases the amount of photons that get converted to electrons, maximises a factory’s output, and lowers the amount of raw materials needed to manufacture solar panels. All these factors reduce the cost of solar, moving the industry forward to the goal of grid parity.
However, we need to rethink this concept of grid parity with the notion of peak parity. This makes sense because peak load which occurs in the afternoon hours when the most electricity is consumed and when it is the most expensive to produce, are the same hours when solar PV is most efficient. During this peak time, if we use natural gas as an industry benchmark, solar PV is already price competitive in many places around the world. In the U.S., at $3.50/Wp installed, the power generated by a solar farm is already crossing over in Hawaii, California, New York, and Texas. More and more places will crossover as the cost of solar PV inevitably declines, and the fuel costs for natural gas trends upwards.
PES: Similarly, we’re intrigued by distributed generation – can you explain a little about the benefits of this?
RDL: The notion that solar PV generation farms can be built (or distributed) in locations with anticipated load increases addresses one of the biggest obstacles facing renewable energy: the expense and cumbersome process to cite and build new transmission. Most people conceive of distributed generation as small, rooftop residential installations. That type of solar PV deployment has its role, however, the industry is headed towards a different, more promising, scalable solar PV deployment model: large MW installations at a utility’s distribution level near load centres and consumption. This type of deployment delivers lower cost to rate payers, provides better visibility and planning to utilities, and largely avoids the need to build new transmission capacity.
Historically, because solar PV was cost prohibitive, wind and concentrating solar thermal were the only renewable sources available to utilities. Both of these generation sources require large centralised generation plants to be economical and both need to be built close to the best wind or sun resources, resulting in remote installations areas away from load that depend on long-distance transmission lines. Meanwhile, solar PV has entered the realm of economic feasibility.