A New Model For Solar Manufacturing Roger G. Little Spire Corporation.
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Transcript of A New Model For Solar Manufacturing Roger G. Little Spire Corporation.
A New ModelFor Solar Manufacturing
Roger G. LittleSpire Corporation
“USA to become the world’s largest solar energy market.”
- SolarPlaza April 1, 2009
April 1, 2009
Opportunity
US Market Drivers
• ARRA to jump start the market.• Utility arrays growing in size to 100 MW +• State incentives being implemented.
---250GW in 10 years. • RPS 40 states—National?• FIT Emerging.• FTC extended 8 years.• Job creation goal.
America Reinvestment and Recovery Act – ARRA
• PV systems receive 30% grant.• PV manufacturing investments receive
30% tax credit.• State initiatives available• Can double dip.• ITC also available.• Focus on America job creation.
ARRA Supports Increased Manufacturing
• “Buy American” factory equipment requirement.
• Tax Credits – 30% of investment.• Available to expanding US companies.• Foreign firms entitled for factories
built in US with US equipment.
State PV Opportunities by 2011
32
891
36
246
483
669
11077
25 35 38
193
38 47
377
122132161
19
641
0
100
200
300
400
500
600
700
800
900
1000
HI TX DC NJ NY CA CT NV RI NH DE MA ME NM NC CO OR AZ VT FL
States
Total Cumulative= 4.4 GW
MW
Barclay Capital Solar Energy, Feb. 4, 2009
US Market Projections
3
0.40.7
1.5
2.1
0
0.5
1
1.5
2
2.5
3
3.5
2008 2009 2010 2011 2012
GW
Solarbuzz/Prometheus/Lazard - 2009
xSi Will Dominate
• Si poly costs down to $60/kg.• Means lower cost of modules. • xSi high efficiency drives down cost.• xSi demonstrates 20 year life span.• PPA Market will demand xSi.• Manufacturing scales easily.• Distributed manufacturing is cost effective.
US PV Manufacturing
MW -- Current & Announced 2008 2009 2010 2011 2012
Solarworld 100 100
Sharp 100
Schott 15
Evergreen 17 90 90
GE 35 ?
BP 50 ?
Sunwize 25
Annual 342 90 190
Cumulative 342 432 622 622 622
US Market xSi Manufacturing Short Fall
GW
0.00
0.50
1.00
1.50
2.00
2.50
2008 2009 2010 2011 2012
Mfg Shortfall
Mfg Capacity
xSi Module Value Stream
Sand
Polysilicon
Polycrystalline Ingot
Wafers
Cells
Modules
US xSi Distributed Module Manufacturing
• Modules assembled from solar cells.• Module assembly is relatively standard.• IP is retained in the cell.• Modest levels of production are cost
effective.• Cost savings achieved through shipping
& handling and inventory reduction.• Local markets are stimulated.• Local jobs are created.
USA Manufacturing Opportunity
• 50 MW/year production lines • Production shortfall 2.5 GW• 50 factories each 50 MW/year • One per state?• Use state + ARRA subsidies.
Module Cost Assumptions
• 50 MW/year production. • Automated assembly line.• 219 Watt module.• 15.5% cell.• Cell cost = $1.80/Watt.• 7 year depreciation.• Factory 20K ft2 at $10/ft2/yr.• Investment line + building = $20M
Non-Cell Module Cost
$0.54/wAdded Cost to Cell
Labor, $0.04
Overhead, $0.02
Cell Yield Loss, $0.05
Non-Cell Materials,
$0.41
Op/Maint, $0.02
Module Cost vs. Cell Cost
0.49
1.01
1.52
2.04
2.55
3.07
3.58
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
0.00 0.50 1.00 1.50 2.00 2.50 3.00
Module$/W
Cell $/W
$2.34
$1.80
50W/YearModule Cost
Cell Cost
Investment for 50MW Module Line
Investment $10,000,000
ARRA - ITC $3,000,000
State Credit (e.g. Oregon) $5,000,000
Cost $2,000,000
Annual P/L For Module Factory
Revenue (2.80/w) $140,000,000
COGS $119,500,000
SG&A $5,600,000
EBITDA $14,900,000
DOE – Critical Mandate
“To ensure accountability, the Department of Energy will provide guidance to and require grant recipients to report on the number of jobs created or retained, energy saved, renewable energy capacity installed, greenhouse gas emissions reduced and funds leveraged.”
Funding Agencies Creating Critical Feedback
Job Creation – Module Related
# ofJobs
0
2000
4000
6000
8000
10000
12000
2008 2009 2010 2011 2012
Module Production
Module Equipment
Utility Solar Farm Factory
Brightfield
Super Sized Utility Module
• Super size modules for max system cost reduction.
• Deployed on the edge of a solar field.• Cost reduction due to:
• Labor• Materials• BOS• Shipping
Super Sized Area Module
1-kW Module
Utility System Cost
Module$2.11
BOS$0.65
$0.20
Total $2.96
Summary
• US Market huge opportunity – 3GW• 2.5GW of new capacity needed• xSi will dominate• 50MW/yr distributed module
manufacturing• Stimulus $ reduces investment• 3000 manufacturing jobs created
Module Manufacturing Jobs
# ofJobs
171
465
1411
1749
2232
0
500
1000
1500
2000
2500
2008 2009 2010 2011 2012
Equipment Manufacturing Jobs
# ofJobs
67
183
554
687
877
0
100
200
300
400
500
600
700
800
900
2008 2009 2010 2011 2012
Quick Overview of Stimulus Estimates
Previously, State and Federal Monies were NOT allowed to Overlap (compounded).
The NEW ARRA allows for State and Federal Incentives to be INDEPENDENT factors.helps assure Customers benefit with accelerated 50% depreciation.
American based Customers have an opportunity: LARGE Portions of Capital Investment
PAID FOR!!!!!!!!!
If done correctly…subsidies and allowed accelerated Depreciation pays for Factory/Equipment capital cost
ARRA PV System Grants
• ARRA supports extensive PV system expansion.
• “Buy American” systems requirement.• Applicants receive 30% rebate on system
costs when placed in service.• Project must begin by 12/31.2010 and be
complete by 1/1/2017.
US xSi Module Capacity - MW
• BP – No more US manufacturing.• Sharp – Expanding.• GE – Downsizing.• Solar World – Expanding.
Cost Effective Factory Size
Factory Investment
U.S. Based Capacity Shortfall
GW
00.1
0.5
1.1
1.8
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2008 2009 2010 2011 2012