How much would technical learning drive down manufacturing costs? How much would economies of scale help? The list of questions was long and the list of answers was short.

So, people working on wind had to make some assumptions. One struck me as particularly interesting. It’s perhaps the simplest heuristic that I’ve ever seen. In a publication called “Wind Energy Developments in the 20th Century,” NASA chose to estimate the ultimate cost of wind power by weight:

To estimate what the cost of a wind turbine might eventually be in production, it was assumed that wind turbines could be fabricated, assembled, and installed for a cost of $2 to $3 per pound. This is a rather simplistic way to estimate the cost of a mature product, but available data show that many machinery items such as large tractors, power shovels, and steam turbines are fabricated, assembled, and distributed for $2 to $3 per pound.

I haven’t found many references to this method of cost estimation. Anyon know if NASA was right about this? Does anyone still estimate ultimate cost this way?

Inventing Green Thoughts: There are two key things to note here. First, the SERI scientists were trying to push solar cell costs down to between 14 and 40 cents a watt (!), based on 1980 dollars. Second, they thought they could get there by the year 2000.

“Several significant advances in solar cell R&D have occurred over the past few years,” Kazmerski writes. “Those solar cell technologies that are expected to meet the long-term national goals (i.e., $0.14-0.40/peak-watt, based upon 1980 dollars, in the 1990-2000 time-frame) have demonstrated progress both in interediate efficiency (>10%) thin-film device, and the very-high efficiency (aimed at greater than 30%) concentrator areas.”

Turns out, they were just a bit off. The Solarbuzz retail price per peak watt survey has found prices varying between $4.56 and $4.88 over the last few years. Sure, some companies can make modules for less, but they are merely aiming for a buck or two a watt, not 14 cents!

It goes to show how little scientists really knew about the photovoltaic materials that they were working with.

Kazmerski cites a paper by Larry Magid on the U.S. National Photovoltaic Program in which Magid asserts that photovoltaics would become cost effective in the southwest by 1986.

“A key element in this program is the expectation that photovoltaic residences will begin to be cost effective within the Southwestern United States when modules are priced at 70 cents/peak watt and the total installed system costs from $1.6 to $2.20 per peak watt (in 1980 dollars),” Magid writes. “The program anticipates this occurring in 1986.”

SERI engineers were overly optimistic about photovoltaics’ potential to be cost competitive in the near term. Even if the Reagan administration had kept up or even increased R&D spend, it seems impossible in retrospect that prices could have dropped as much as they anticipated by 1986 or 1990 or 2000.

One key impact from this excessive optimism is that they could have privileged exotic technologies over plain old silicon hoping to get a big cost breakthrough. Silicon-advocate and long-time solar researcher, Georgia Tech’s (and Suniva’s) Ajeet Rohatgi put it best here on Inventing Green.

This is very interesting. This is good or bad for silicon. The good part is that we know silicon material very well. We know all the properties of silicon. But this sometimes ends up being a disadvantage for silicon because we know too much about it. We are not willing to give it the benefit of the doubt. If you look at where a lot of the investment is going, people will talk about 2% organic cells and say some day they will be 10-15%. Because people don’t know about those materials they are willing to give them the benefit of the doubt.

We see evidence of the home run mindset in the paper. Kazmerski doesn’t even mention the use of monocrystalline silicon, which is what Rohatgi’s company uses.

Ignoring the technologies that are actually closest to commercialization could end up being a general problem for those advocating that true breakthroughs are needed to push solar into a major component of the power mix. Instead of focusing on simple incremental technical advances and capturing scaling efficiencies for established technologies, they might direct funds to higher risk enterprises.

It’s possible that SERI’s approach makes sense, but only if it’s pared with realistic goals and outcomes.

Oh, and Larry Mazerski is still a leader in PV research. He stayed at SERI through the bad years and through the 90s after it became NREL. In fact, he now heads up the National Center for Photovoltaics. I’ll be trying to get a hold of him soon to talk about those early years.

Advances in Photovoltaics R&D – An Overview – 1981

Inventing Green Thoughts:

“The SERI and DOE programs are useful for accelerating private industry’s rate of change,” begins A Solar Explosion. He’s answering a question that the Regan White House surely posed and that continues to permeate our discussions about energy today.

How, they must have asked, could government improve on what the “free market” decides? Knowing that the game was stacked against them, it must have seemed farcical to provide answers at all, but Baccei tries anyway.

He draws attention to two SERI programs, the Passive Solar Manufactured Buildings Program and the Solar Home Builders Program, saying that it is “particularly noteworthy that SERI and DOE have initiated two programs that work directly with the U.S. building industry and are proving to be widely popular and very successful.”

23 companies participated in the Manufactured Buildings Program. Baccei cites the director of research for the country’s largest producer of metal buildings saying, “Butler [Manufacturing] would still be doodling on the back of envelopes if it were not for this government program.”

Instead, Butler designed and built a prototype that used 70% less energy than its standard buildings. Despite the early success, the only postmortem conducted after the program’s end found that “only two of the manufacturers continued to offer designs based on experiences under the program.” This, despite the fact that 20-60% energy savings were achieved at incremental costs ranging from 0-20%. Tough economic times and “the programs ‘fits and starts’ resulting from budget cutbacks at DOE” appear to have contributed to the technical success but market failure of the program.

Baccei’s second success story is the Solar Home Builders Program. Nearly no information is available on the program, save Baccei’s account an article in the Christian Science Monitor that backs him up.

“Passive solar energy may finally be shaking its ’suburban chic’ image. It appears poised to leap out of the pages of Sunset magazine into the more mundane world of the tract home,” David Salisbury wrote.

His news peg was a pilot program that Baccei initiated in Denver with twelve builders. With SERI’s help, they directed 100,000 Denverites to 12 model solar homes. Over the 16-day exhibition, the builders sold 31 homes for $2.5 million and projected another 87 sales to bring the total to $6.3 million. Pretty decent numbers during an economic recession that rivals the one we’re in right now. Certainly evidence that the $150,000 program was working for the builders enrolled in it.

Still, the larger question of how much the government can do to drive techniques into the marketplace remained unanswered because Regan cut teh program’s budget before it could carry through on its plans.

“A debate is currently being waged in the United States about the appropriateness of government’s role in programs like those presented here. It has been suggested that energy conservation and renewable energy programs be stopped because private industry will respond on its own to rising energy prices,” he writes. “Although a response can be expected, time lags and appropriateness of responses remain a serious concern.”

In hindsight, we know that price upturns have rarely continued long enough for deeply ingrained corporate behaviors and expensive infrastructure to change. Many of the choices we made with cheap energy and no carbon constraints — building stock, automobile fleet, transportation infrastructure, power plants, The Grid — have momentum that will take decades of price signals to change.

Looking at the recent (and long-term, actually) history of energy in the United States, a coherent, socially-driven nuclear policy drove massive adoption of the technology, despite serious technical challenges and higher costs than the fossil fuel alternatives. Now, nuclear power generated in plants built long ago is seriously cheap, even if new plants are still likely to cost a bundle.

To take one example of how social decisions impact the cost of energy technology, think about financing. When a technology becomes what economist Steve Cohn calls an “official technology,” with de facto or explicit government backing, financing tends to get cheaper. That is to say, banks respond to the government’s wishes by making it relatively cheaper to borrow money to build a big plant. On a plant requiring hundreds of millions or bilions of dollars, the terms of the loans that the developer receives can make the difference in reaching that fuzzy/moving/imaginary line we call “grid parity.”

Baccei, for his part, is still around. He’s now head of emerging energy efficiency technologies at the Sacramento Municipal Utility District. It’s not a stretch to say that it’s people like him who could tag green tech an official technology.

A Solar Explosion – 1981

It’s impossible not to laugh while watching this local San Francisco news broadcast. It tells the story of “the first step in newspapers by computer,” the delivery of copy via Compuserve to people like Richard Halloran, whose tagline, in place of say, citizen or CEO, is “Owns Home Computer.”

There’s something poignant about the last scene of the newspaper vendor who “isn’t worried about his job.”

I post this to remind myself that change happens, even if it’s pretty obvious we suck at anticipating it. But it also brings to mind the difficulty in changing energy supply. No one really wanted, “newspapers by computer,” but plenty of people love the Internet. With energy though, we’re trying to do a direct swap of an identical commodity. At the end of the day, you still want the same damn electricity to come out of the socket. Green tech isn’t going to bring you the Internet, it’s just going to allow you to keep it without the negative repercussions.