It Opens the Door to Solar as a Critical Source of Power and Makes Way for Long Term Breakthroughs

PASADENA, Calif.--The current oversupply of solar modules which is putting tremendous pressure on the industry and its financial backers has led to a generally negative view of the solar industry. However, according to Dr. Harry A. Atwater, Director of the Resnick Sustainability Institute at Caltech, while the current oversupply of silicon solar panels is painful in the short term, it is a boon for long term adoption of solar energy. This viewpoint was shared during this week's VX 2013 Conference in Los Angeles.

"There has never been a better time to go ‘long' on innovative solar technology," said Atwater, who is also the Howard Hughes Professor and Professor of Applied Physics and Materials Science at the California Institute of Technology. "If we invest now, by the time the industry recovers from today's oversupply crisis, very advanced innovations will have emerged that can fuel the next wave of solar technology. These will build on the momentum created by the current phase of the market and dramatically expand the usefulness and adoption of solar."

Atwater explained how the market got into its current state and how this is, in fact, a good thing. Since 2000, photovoltaics (PV or solar power) has grown up from a ‘boutique' research-and-development scale enterprise to become a global industry with a comprehensive supply chain, equipment industry, photovoltaic systems distribution and installation businesses, and new modes for project finance. In the last three years, this has led to PV manufacturing capacity continuing to rocket forward. Today it stands at a worldwide module production capacity of 60 GW (Gigawatts) peak.

The problem for manufacturers is that in 2012 there was worldwide demand for only 35 GW of modules and 2013 demand is currently forecast in the 40 GW range. So right now, the industry is ‘underwater.' This has given rise to dramatic, unexpected module price reductions over the past 24 months and has caused dislocation in the photovoltaics manufacturing industry: the oversupply quandary has generated bankruptcies of less-competitive manufacturers and those short of the cash needed to sustain operations through the oversupply period.

But, ironically, this dislocation has been great for consumers; it is now a great time for them to purchase, install, and use solar power – which means that solar power is gaining a meaningful role in the market.

"This period in the history of the solar market is like the ‘dotcom bubble'," said Atwater. "During that era, there was a lot of financial and entrepreneurial pain, but vast amounts of infrastructure, market exposure and adoption occurred which catalyzed today's dramatic growth in worldwide use of the Web. We believe the same is true of solar."

Therefore, while there has been a dramatic pullback of private equity and venture capital investment in innovative solar technologies, those who go long on solar now – supporting the innovations that are currently underway – will benefit greatly.

New Solar Innovations are Emerging

In addition to his role as head of the Resnick Sustainability Institute and professorship at Caltech, Atwater leads a project that recently received a $2.4 million grant from the U.S. Advanced Research Projects Agency for Energy (ARPA-E) to set the groundwork for solar modules in the 50+ percent efficiency range. Atwater is also a co-founder of Alta Devices, which uses gallium arsenide to enable the world's most efficient thin film solar and has the potential to completely change the way solar energy is used. Atwater's other work in solar includes: discovery of materials that are both readily available from the earth and enable highly efficient solar energy; and design of nanomaterials that, when distributed over large areas, can increase light capture to significantly change the cost and efficiency of solar.

About The Resnick Sustainability Institute

The Resnick Institute is Caltech's studio focused on the breakthroughs that will change the balance of the world's sustainability. It marries bold creativity and deep scientific knowledge by encouraging original thinking and orthogonal ideas. The Resnick Institute works with some of the world's top and emerging scientists – at the California Institute of Technology and beyond. Current projects at the Resnick Institute include research into energy generation, such as advanced photovoltaics, photoelectrochemical solar fuels, cellulosic biofuels, and wind energy system design; energy conversion work on batteries and fuel cells; and energy efficiency and management such as fuel efficient vehicles, green chemical synthesis, thermoelectric materials, and advanced research on electrical grid control and distribution. For more information, visit http://resnick.caltech.edu.