SunShot Helps Bay Area Startups Drive Down Solar Costs

Following through on the mitigation aspects of President Barack Obama's Climate Action Plan, the Department of Energy on Oct. 22 announced the latest round of SunShot Initiative award winners. Reducing fossil fuel use is the most effective means of reducing the greenhouse gas emissions that are fueling climate change. By investing in innovative solar and renewable energy research and development, DOE is promoting further reductions in the cost of solar energy -- making it an economically more attractive, emissions-free alternative to fossil fuels.

In this latest round of SunShot R&D funding, DOE awarded a total of $53 million to help young, small U.S. companies carry out 40 innovative solar energy projects that could help realize the SunShot Challenge goal of driving the total installed cost of solar energy down to 6 cents per kilowatt-hour by 2020. Thanks to SunShot, the U.S. is 60 percent of the way there, with the average price of utility-scale solar-generated electricity having dropped from about 21 cents to 11 cents per kWh.

Among the latest crop of SunShot R&D award winners are Cogenra Solar, Mosaic and Stem -- promising young U.S. companies at the forefront of innovation in upstream and downstream solar photovoltaic (PV) energy and intelligent energy storage technology. All three, as it turns out, are based in the San Francisco Bay area.

The multiple benefits of investing in solar energy R&D

U.S. solar electricity generation capacity grew at a torrid 418 percent rate from 2010 to year-end 2013. Though it's the fastest growing category of any type of electric power generation, solar energy only accounted for 12,057 megawatts, or 1.13 percent, of overall U.S. generation capacity in 2013.

U.S. solar power generation capacity is expected to continue to grow rapidly in coming decades, however. According to DOE, solar energy could meet 14 percent of U.S. electricity needs by 2030 and 57 percent by 2050. Some believe those estimates are modest. Realizing SunShot Initiative targets would also drive creation of green jobs, including helping to revitalize U.S. manufacturing, in which relatively well-paid skilled jobs are the rule. As DOE states:

“Achieving the SunShot Initiative's 6 cents per kWh goal would lead to the creation of 390,000 new solar jobs by 2050.”

SunShot Initiative, solar jobs and electricity costs

Also significant, achieving SunShot goals would go a long way toward mitigating the negative effects high and volatile fossil fuel prices have on the cost of generating electric power.

“In the scenarios envisioned by the SunShot Initiative, solar power could decrease costs by up to 14 percent and save up to $20 billion annually by 2050 while still meeting the nation's carbon-cutting goals,” according to DOE.

Federal R&D program funding and public-private partnerships such as those being enacted through the SunShot Initiative have been pivotal to promoting growth across the renewable energy value chain. Commenting on the latest round of SunShot R&D awards, Energy Secretary Ernest Moniz stated:

“As U.S. solar installation increases and the cost of solar electricity continues to decline, solar energy is becoming an increasingly affordable clean energy option for more American families and businesses. “Today, the U.S. has 15.9 gigawatts of installed solar power – enough to power more than 3.2 million average American homes. The projects announced today will help the U.S. solar energy industry continue to grow, ensuring America can capitalize on its vast renewable energy sources, cut carbon pollution, and continue to lead in the world in clean energy innovation.”

SunShot and Bay Area solar startups

San Franciso Bay Area solar energy startups, such as Cogenra, Mosaic and Stem, figure prominently in the SunShot Initiative's success. Among the latest round of solar R&D funding recipients, DOE awarded Mountain View-based Cogenra $2 million to help finance construction of an automated production line for its record-setting Dense Cell Interconnect (DCI) technology.

Cogenra's DCI holds out the promise of boosting the power output of solar modules by as much as 15 percent. In tests at third-party labs, DCI “set world records for peak power output in N-type mono crystalline, P-type mono crystalline and multi crystalline silicon photovoltaic (PV) cells.” Cogenra achieved these substantial gains by “eliminating copper interconnect ribbons, solder joints and inter-cell gaps,” DOE explains.

Upstream of solar cell and module manufacturing, pioneering solar energy finance startups such as Oakland's Mosaic are making solar more accessible and affordable. The developer of a peer-to-peer online platform for investing in solar energy projects, DOE awarded Mosaic its second cooperative award.

Mosaic will use the $650,000 SunShot award to support its growing home solar lending business. That includes further improving its home solar Web portal, which home solar system installers are using to close deals, Mosaic explains in a press release. Mosaic says monthly payments on its home solar loans are among the lowest in the market. The company is raising capital for its home solar loans by aggregating investments via crowdsourcing. "The SunShot Initiative is a model for the public sector's power to support private sector innovation," said Mosaic co-founder and President Billy Parish. "We're thrilled to receive a second round of funding from SunShot's Incubator program and to be joined by the solar industry's brightest innovators."

Advances and cost reductions in intelligent energy storage technology of the kind being developed and deployed by Millbrae, California-based Stem may be the missing piece of the puzzle that triggers another acceleration in solar energy deployment. With $935,000 in SunShot R&D funding, Stem aims to improve grid stability and lower the cost of integrating solar energy generation assets with electric grids. “While storage and solar require hardware such as batteries and panels, Stem has demonstrated the considerable value that can be unlocked by coupling these technologies with advanced software capabilities,” Stem CEO John Carrington was quoted in a press release. “This award underscores the critical role data analytics play in integrating technologies into the U.S. electric grid.”

Editor's Note: An earlier version of this post reported that the national average total installed cost of solar dropped from 21 cents to 11 cents per kWh. The post has been updated to note that these figures only refer to utility-scale solar energy.

*Image credits: 1) DOE SunShot Initiative; 2) DOE Solar Manufacturing Partnerships; 3) Mosaic; 4) Stem, Inc.