The Energy Department’s SunShot Grand Challenge Summit got off to a roaring start this week in Denver, as Energy Secretary Steven Chu announced $10 million in prizes for the teams that can develop the most affordable rooftop solar power model for the U.S. market. Against the current trend in falling oil and gas prices, affordability is a relative term, but businesses with access to a rooftop solar system could easily get the last laugh the next time fossil fuel prices spike up.
The SunShot Initiative launched in February 2011, modeled on President Kennedy’s legendary Moonshot program, which rocketed the U.S. from second-best into the lead for new space exploration technologies. Similarly, SunShot is designed to vault the U.S. back into global dominance in the solar power market, a position it held until a few years ago, by supporting new technologies and systems that reduce the cost of solar power.
The “soft” costs of solar power
Specifically, the SunShot goal is a 75 percent reduction in the total cost of solar energy by 2020. At that price point, DOE predicts that solar power would flood into the mass market and account for up to 18 percent of U.S. electricity generation by 2030.
DOE’s emphasis on total costs will have a significant impact on the rooftop solar market, because currently the solar module itself accounts for less than half the overall cost of a typical rooftop solar system.
The “soft” costs add up, in the form of permitting and site assessment, shipping, installation, maintenance and repair.
The rules for DOE’s Most Affordable Rooftop Solar Challenge are designed to encourage the formation of teams that cut across the entire spectrum of solar installation costs, including manufacturers, installers, public entities such as code enforcers and municipal planners, electric utilities, academic and financial institutions, as well as nonprofits and other stakeholders.
Real-life solar competition
The challenge goes far beyond theoretical modeling to require actual success with real customers – lots of them. DOE is requiring the winning teams to establish a solid track record in the marketplace:
“Successful competitors will domestically deploy at least 5,000 new rooftop photovoltaic (PV) installations at an average pre-subsidy sales price of $2 per watt before January 1, 2015. Winners will break a significant price barrier, considered to be unachievable a decade ago. Winners will prove that they can repeatedly achieve a $2 per watt install price using innovative, verifiable processes and business practices.”
The first three teams to reach the goal will split the $10 million, with the first among these getting $7 million and the right to “publicly call themselves the SunShotA team.”
The second and third teams get $2 million and $1 million, respectively.
More help for reducing soft solar costs
In a related initiative, Secretary Chu also announced that nine startups were awarded a total of $8 million in support of new systems to reduce the soft costs of solar energy, including financing, permitting and inspection.
This group of projects includes emerging solutions like crowd funding, reverse auctions and cloud-based software as well as online platforms for streamlining application forms, building marketplaces, and providing site assessment and performance data.
The grants fall under SunShot’s Incubator program, which offers a counterpoint to the losses incurred by the notorious Solyndra bankruptcy. According to DOE, since 2007 the agency has invested about $60 million to kickstart new solar technologies, which have in turn attracted about $1.6 billion in private investment.
Chu also announced a third SunShot initiative yesterday, in which 21 projects in 13 different states received a total of $56 million for improving the efficiency of concentrating solar systems.
Unlike photovoltaic cells, which convert sunlight directly to electricity, concentrating solar systems use mirrors to focus solar energy on a central tower or other receptor. The resulting heat is then used to generate electricity.
Follow me on Twitter: @TinaMCasey.