Which just so happens to be a key plank in most greens' vision of the energy future.File this under unlikely foes: James Hughes, CEO of First Solar, the largest American photovoltaics maker, doesn't buy a big part of most green advocates' vision for the future. In a deep (and very wonky) interview with Australia's Renew Economy, Hughes said that he doesn't think rooftop, distributed solar will disrupt our current centralized system of electricity production and distribution.
I am not a huge believer ... in the idea that the centralized model of energy distribution is outdated and a more distributed model is what makes sense going forward. Some degree of distributed generation does make sense. I believe community solar has a bright future. I believe off-grid has a bright future.
Taking it to the residential level, the difficulty is that storage is very expensive, and the difficulty is that unless you disconnect from the grid and use storage, then there is a huge subsidy inherent in a metering type of model. You also ignore the patterns of industrial use and the synergies between residential usage patterns and industrial usage patterns, and you lose that synergy when you got to highly distributed model, and I simply don't believe that the synergies of generation at a household level overcome the value of the generation on a centralized basis.
There is another reason, though, that he mentioned elsewhere in the interview. First Solar is having a lot more success selling into the more demanding utility market than residential and commercial installations.
[W]e believe we have a competitive advantage in engineering and power production stand point. We deliver a product that is well engineered and can deliver a highly predictable result for the customer. The rooftop market, the installations are too small and there are too many variables to do a system level power prediction with that degree of precision. In addition, you don't have meters and diagnostics to measure the output, so the quality measure for the rooftop panel is what does it flash test at, and the end user doesn't really know if they got what they paid for - you have different levels of soiling, of shading, of insulation, uncertainty over ambient temperature, variability in installation circumstances.
I would rather sail into a market where there's a much stricter quality standard, as opposed to one that is more commoditised. And there are some major structural issues in most of the regulatory systems around the world with respect to rooftop installations. They are being facilitated with either net metering of feed in tariff programs. Neither of those, long term, is sustainable. You have to fundamentally restructure the regulatory system if you really want to accommodate rooftop at any sort of significant penetration level.
I don't have too much commentary to add here other than to say: the politics of the major renewable energy players consistently surprise me.
* Thanks to Lee Kasten for pointing out that I needed to clarify my language here on precisely which industry I was talking about.
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