From the air, the glowing circle in the middle of the Nevada desert looks more like an image from a mystical dream than a modern form of power generation. But the 110-MW solar farm at Crescent Dunes outside of Las Vegas, NV, is all science and no science fiction, and it also powers 75,000 homes.
Such a powerful energy generation facility would have been impossible 10 years ago, and that’s no surprise. The distributed energy industry has grown by leaps and bounds in even the last two years, and industry leaders hope the innovations in solar generation, distribution, and management mean distributed energy can outshine traditional fossil fuels in the long run.
The bigger picture of solar-focused innovation ranges from improvements in solar panels, inverters, and solar cells. But some of the biggest changes have happened outside of research and development labs: economic pressure and pro-renewable legislation have had the biggest impact on the influx of new customers into the distributed energy market, experts suggest.
“Right now, we’re seeing in many areas across the globe, solar is a very popular resource in terms of energy generation,” says Hongbin Fang, technical director of LONGi Solar. “A lot of places have reached grid parity.”
All of this innovation has made current resources significantly more efficient and has grown the renewables market to the point where the distributed energy market was able to take off as a field of its own.
“Go back two years ago, you didn’t really hear the term DER [distributed energy resources] used; maybe you could hear it at obscure conferences, but it wasn’t really a term,” says Brad Hansen, CEO, EnSync Energy. “There wasn’t even a market forecast until two years ago. It’s really new and it’s really being driven by cost, policy, and this general cord-cutting trend.”
Innovations in terms of technological advancements in the distributed energy market can be broken up into three camps: solar cells and panels, inverters, and storage.
It’s difficult to overstate the improvements that have been made to solar cells and solar panels over the past decades. In a way, it’s like comparing a Ford Model T to a modern Ford Focus—they’re both cars, but the newer models are simply on a whole other level from the original.
The history of solar cells goes all the way back to the late 1800s when the first solar cell was invented, and the science behind that discovery stretches all the way back to 1839.
French scientist Alexandre-Edmond Becquerel was experimenting with an electrolytic cell that contained two metal electrodes, surrounded by a solution that conducts electricity, when he made a fundamental revelation. He discovered that electricity can be generated when sunlight hits the electrodes, a phenomenon he coined the “photovoltaic effect.” He invented a device to measure this effect, which he called the “phosphoroscope.”
Around the same time, other scientists were also forging onward with discoveries that would make it possible to create solar cells. Scottish scientist James Clerk Maxwell, famous for being the first physicist to describe electromagnetic radiation, experimented with selenium in the 1870s as a way to conduct electricity from the sun.
This discovery and many others paved the way for the first solar cells—created by American inventor Charles Fritts in 1883—and eventually commercial solar cells, which began moving away from labs and onto rooftops and into fields in the 1950s.
Solar cells have improved dramatically in the past few decades in efficiency and diversity of use.
Hansen said when he first entered the distributed energy industry vis-à-vis solar about 10 years ago, panels were hitting about 18% efficiency at their very best.
“Over the last seven, eight years, all of that has just been pushing up and up and up,” he says. “The net effect is that it’s making energy cheaper.”
He says a big change has been the introduction of better crystalline solar cells and better components that increase efficiencies. Different materials like amorphous silicon and better monocrystalline panels are newer possibilities for solar cells.
Monocrystalline panels—which differ from polycrystalline panels because monocrystalline are one, solid crystalline structure—are more efficient than both polycrystalline and amorphous silicon panels. However, until recently, they had been prohibitively expensive as a business and residential solution.
But the cost per watt of electricity produced for monocrystalline panels has dropped dramatically in the past few years, Hansen says. In fact, the cost for solar cells in general is declining, and every product in the industry is following that trend.
“At the macro level, the cost of solar continues to drop and that’s definitely got an efficiency component,” he says.
Fang, of LONGi Solar, which makes and sells monocrystalline solar wafers used in solar cells, says the development of more efficient monocrystalline products has made it possible for these types of panels to be used widely.
He says monocrystalline panels can have longer lifespans, can be more efficient, and can have a higher output than polycrystalline panels. Monocrystalline solar wafers are 10 to 12% more efficient than polycrystalline panels, he claims.
While monocrystalline panels used to be significantly more expensive than polycrystalline panels, Fang says the two have nearly reached parity in the past few years. “The cost on the per piece is pretty much the same and there [with monocrystalline panels] you have a higher output,” he says.
“Previously it took a lot more effort to make a mono[crystalline] wafer,” he says. But investments in research and development have shaved the cost of some of these types of wafers, making it possible for home developers to consider both options.
He said LONGi Solar has already seen improvements with their own monocrystalline wafer designs. Last year, their solar wafers had an energy generation capacity of 15 GW. This year, that generation has nearly doubled to 28 GW. He said they’re expecting to reach 36 GW next year, and then 45 GW by 2020.
Solar inverters have seen some advancements in their design as well, Hansen says. The biggest move has been the evolution from traditional inverters to digital, smart inverters. This has been happening on a large scale and makes it possible to manage inverters in an entire region via remote operations.
Solar City and Tesla’s new collaboration to produce the solar roof is expected to be among the biggest distributed energy innovations of the past few years. The solar glass is designed to look like roof tiles while maintaining constant energy generation, with enough strength to protect a home from regular environmental conditions.
“The Tesla and SolarCity solar roof is a complete roof that is beautiful, durable, and brings renewable electricity production to any home or business,” the companies stated in a release. “When Tesla and SolarCity embarked to design and engineer the solar roof together, the goal was to create the most beautiful and efficient roof ever—one that would make homes look better while reducing the cost of electricity.”
The introduction of “invisible” solar panels represents a shift in flexibility for solar panels and could increase demand for the tools since some customers find solar panels an eyesore.
The adoption of smart inverters helps manage load into current grids as solar and distributed energy becomes adopted on a mass scale. Until grid operations are established to the point where energy can be on-loaded and off-loaded without fear of overloading a subsystem, smart inverters help utilities manage resources in a safe way.
“Really what that’s all about is allowing the utility to curtail you if they can’t handle the generation coming into the grid,” he says. “That’s, I think, the big change in solar inverters.”
One of the most important developing technologies is storage capacity for distributed energy generation. Batteries have advanced significantly due to the market demand for electric vehicle charging stations, and new types of chemical batteries are being experimented with to find the right combination for various storage needs.
“Photovoltaic [energy generation] is becoming the lowest-cost generation approach,” says Fang. “PV plus storage will become the default energy source across the globe” in the future.
Fang says at the moment, even popular lithium-ion batteries are still fairly expensive and can’t store days’ worth of power. But he’s optimistic about the progress that has been made so far. “We think in the next five to ten years, storage costs will come down,” he says.
While lithium-ion is the most popular battery combination, other forms of chemical combinations have been experimented with over the past five years, Hansen says, as well as different types of lithium-ion such as power lithium-ion and energy lithium-ion.
“Lithium-ion and the cost reductions in lithium-ion are trading all three markets and, at least in our view, you have to have a really strong and compelling reason not to use lithium-ion,” says Hansen.
He says the trends behind lithium-ion and storage in general are strong, and while it will still be years before battery storage is robust enough to expand solar as a main energy player, electric vehicles are already paving the way for that future.
“I think something will displace lithium-ion at some point, but it may be 10 years before that happens,” he adds. “The whole food chain is getting very efficient because of electric vehicles and we’re just riding the coattails.”
EnSync is betting on that trend staying strong. One of their products focuses on solar power storage and distribution for apartment complexes. Hansen said the company has one operational system set up in Hawaii that stores about 500 kilowatts of solar and about one megawatt hour of electricity.
The system, which puts specific apartment complexes on a microgrid, aims to get homeowners and business owners interested in solar who couldn’t otherwise afford the upfront costs. In some cases, traditional solar panel companies can’t install panels because individual unit owners don’t own the roofs or the electrical infrastructure—it’s a situation where the entire complex needs to be involved.
Given the amount of electricity provided via the apartment-to-apartment DC link, the complex often produces more power than it uses, Hansen says.
“We can basically make them a utility,” he says. “The utility is the backup at that point. We can save a huge amount of money for the property because of that capability.”
One of the biggest shifts that is making solar technologies more efficient actually has nothing to do with the technology itself—but rather the politics and regulation, the economics, and the social attitudes behind solar power.
As economics and social pressure push legislators to acknowledge their constituents’ desire for more renewable energy (combined with the pressure of a finite oil and gas supply nationally, with the complexities of international fossil fuel imports), more city-level, state-level, and federal-level incentives have begun to emerge in favor of distributed energy products.
The Energy Policy Act of 2005 created federal incentives for homeowners to add solar panels to their homes, with discounts available in the form of federal tax credits through the US Internal Revenue Service.
A taxpayer may claim a tax credit of 30% of qualifiable expenditures from the purchase and installation of solar-electric and solar water-heating systems. The program was later expanded for wind-energy systems and geothermal heat pumps.
The US Environmental Protection Agency is among the federal agencies that offer incentives for Energy Star certification. In 2017, the US EPA announced that 93 manufacturing plants earned Energy Star certification.
“Together, these plants reduced their energy bills by almost $340 million, saved more than 60 trillion British thermal units (TBtu) of energy, and achieved broad emissions reductions, including 4 million metric tons of greenhouse gas emissions,” the EPA stated in a press release. “The energy savings is enough to meet the annual energy needs of almost 360,000 American households.”
At the same time, state and federal laws regulating solar power and the import of their component materials have also begun to pop up. For example, plug-and-play solar—which is used more extensively in Europe than in the US—is either impractical or forbidden in some situations in the US due to federal regulations.
States like California have instituted state-wide incentives for solar power while also mandating more renewable energy in the state. California Gov. Jerry Brown signed a bill in 2015 that mandated that all utilities produce or offset 50% of their electricity production with renewable energy.
Some states even limit the sale of electricity to specific traditional utilities, effectively closing the market for microgrid solar and off-grid solar.
Internationally, the challenges vary, Fang says. He adds that some countries are pushing forward with distributed energy resources, but some nations are too tied to their fossil fuel power plants.
“Some of them are more supportive than others. We hope all governments will realize that [photovoltaic energy generation] will spread to the whole world,” he says. “We don’t think the train will stop, we don’t think its growth will slow down. We don’t think this trend will get reversed, but we do want to see it get promoted and keep the train moving.”
Despite minor slowdowns in the US, Fang says, distributed energy is still seeing a warming trend. Internationally, distributed energy is growing steadily, especially in markets like semi-rural areas of China.
“Most new capacity expansion is happening in this low-cost, abundant area in China,” he says.
He says some research groups have claimed that “by 2050, the whole world can be powered by renewables.”
Those statistics might seem ambitious to some, he says, but he feels they accurately represent what he’s seeing in the market as a whole.
“It’s achievable,” he says. “We are very optimistic.”
Hansen said the cost of smaller solar units has dropped 80% since 2010. That trend is only going to continue.
Fang agrees that market pressures are causing the cost of component materials to decrease. In the past few years, the cost of LONGi Solar’s monocrystalline wafers have decreased 95% from their original product, he says.
Hansen says this trend is reflected by a perfect mix of market pressures: “Add a bit of state level policy, add inherent trend toward cutting the cord or democratization of stuff—people trying to get more control over what they use and how they use it.”
The idea of “cord-cutting” and the impact of consumer habits is both a cause and effect of distributed energy. Inventions like electric vehicles have pushed consumers toward considering more renewable energy options to reduce their electricity bills when charging a car at home, but also consumer demand for less fossil fuel propelled the electric vehicle market forward.
Similarly, the trend toward self-reliance and getting “off the grid” (as seen in DIY culture and tiny house reality TV shows) has urged consumers to embrace solar power as a way to disconnect from traditional grid options that rely on coal and natural gas for electricity generation.
“The big trend, putting it all together, is self-generation. It’s creating a tipping point that is going to cause a megatrend type of growth for self-generation,” says Hansen. “We’re capitalizing on that and hopefully even driving it.”
So what does the future bring? A fairly shining new day for distributed energy resources.
The next five years are likely to bring cheaper, more efficient solar panels in all forms—maybe even the first practical, affordable storage units. But what about the next 10 years? 20 years?
“One thing about this is if you look at it just from an application economic value stream…we’ve just scratched the surface for what you can do for a DER,” says Hansen.
He says a fundamental shift in finances will happen one day for energy resources, and it will likely turn utility companies on their heads.
“The whole space of making money through grid services and supply response—that’s yet to come…It’s on everyone’s road maps to take these DERs and use them when the overall grid needs it,” he adds. “The biggest thing we’ll see in 20 years, we’ll see spot market utility trading.”
One day, he surmises, it will be possible to generate electricity, sell it off to neighbors, sell electricity back to utilities, or trade electricity on various markets.
Similarly to how direct-trade networks have developed online—think Swip-Swap groups and creative sales platform Etsy.com—it’s likely that direct trading of electricity resources could appeal to modern consumers.
That process would upset the traditional system of purchasing electricity from a utility company by cutting out the middleman. That sort of fundamental shift is likely decades away.
Back in the Nevada desert, the sun shines brightly on the solar cells of Crescent Dunes. But even with the major power generation produced from the solar cells, more electricity generation resources and storage will be needed in the future to handle nighttime load.
“In Nevada, with Las Vegas as their main load center, the utility’s peak goes upwards to midnight,” Kevin Smith, CEO of SolarReserve, which built the Crescent Dunes, told Fast Company. “So their peak is more of a noon to midnight kind of structure. That means a normal solar plant using PV panels—the kind of technology people have on their roofs—wouldn’t be able to meet demand without batteries or some other type of storage.”
Eventually, these trends point to a future with more solar storage, more distributed energy generation, and a peer-to-peer solar power selling network.
“That’s where this all ends, is spot market electricity across the board, and it’ll happen across the board in 20 years,” says Hansen. “That’s where the story ends.”