28 April 2009


Interview: Barry Cinnamon, CEO Akeena Solar

What will your company be able to achieve in 2009?

Most crystal ball projections for 2009 are very blurry -- because of economic conditions we all have limited visibility. Nevertheless, for Akeena our residential sales continue at a good pace, although commercial sales are down. Most importantly, our introduction of highly differentiated Andalay AC solar panels to solar installers throughout the U.S. represents a very big growth opportunity. While other module companies compete based solely on price, Andalay AC panels compete based on providing superior value to installers, industry-leading aesthetics, and safer AC operation.


What module price development do you expect for this and next year?

We expect average module prices to decline 30% from 2008 to 2009, with another reduction of 25% from 2009 to 2010. Keep in mind that the 30% decline from 2008 to 2009 just brings us to the price range we were paying in early 2004. With the vast increase in scale and efficient new producers there's no doubt that prices in the $1.50/watt range for quality crystalline modules are on the near term horizon. It's just as important to look at installation costs and BOS. We see at least a 50% reduction in these costs as installation technology improves (modules with built-in racking, wiring and grounding have no distinct "BOS") and we make the transition from complicated DC systems to plug and play AC systems. Integrated racking and microinverters make it possible for almost any roofer or electrician to get into the solar installation business -- and these new distribution channels will have a very big impact on reductions in total installed costs.


Where and when do you expect to see grid parity first?

It's important to make a distinction between utility grid parity and retail grid parity. We're a residential and commercial installer, so in many of the markets we serve we are already substantially below retail grid costs. Current $7/watt costs with the 30% ITC works out to about $0.11/kwh -- about the average in the U.S. When installed costs get down to $3.50 in about a year ($2.50/watt for modules and inverters, $1/watt for everything else), solar costs will be less than $0.06/kwh. When solar electricity is half the price of grid electricity demand will skyrocket. Applying local incentives to offset these costs will accelerate the market even further. Being more specific, markets in the U.S. where electricity is expensive (California , Hawaii, northeast states), and places where there is a lot of sun (Arizona , New Mexico, Texas) will achieve grid parity first. - There will be an initial burst of enthusiasm for utility grid parity as large solar farms are built, but I expect that when ratepayers realize that -- because of transmission and distribution costs -- this centralized solar power is no cheaper than fossil fuels, there will be renewed enthusiasm for distributed generation solar.


What are the major threats to the solar industry at the moment?

The ghosts of presidents past.


What do you see as the most important market segments for thin-film products in the near future?

Until efficiencies get closer to the 15% of crystalline, the best market segments are ground mount installations. Higher efficiency crystalline has a clear advantage on space-constrained sunny rooftops.


Do you foresee thin-film module prices dropping to $ 1/Wp in two years, and, if so, won't the major markets be China, USA and India?

I've seen studies that indicate that BOS and installation costs are $0.50/watt higher for thin film. Therefore, thin film prices will have to drop this low otherwise they cannot compete with crystalline modules at $1.50.


What will become the dominating PV technology in the next 5 years?

Five years from now, glass, aluminum, copper and labor will be the major cost components of PV systems -- not crystalline cells or thin film or some new magic nano-dust that the scientists cook up. Our industry has to look at all of the non-cell opportunities to figure out how to reduce costs more.


How can solar PV compete with thermal solar energy plants in utility-scale PV projects in potential markets such as the USA, India, Spain, China, and elsewhere?

Easy: do an accurate life cycle calculation of ongoing operations and maintenance costs. Then PV static ground mount PV installations are much cheaper than anything with moving parts and fluids.


Isn't the solar industry likely to follow the wind-energy industry soon with more than 90% of the market shared by only 10 major manufacturers?

Why ten? I think there will be only five major manufacturers. In most commoditized markets there are one or two market leaders who make money, a few followers who are slightly better than breakeven, and a bunch of new entrants trying to leverage their technology to get into the top five. The only reason we have so many manufacturers now is that there has been no price competition over the past five years.


What do you expect to learn at The Solar Future conference?

I'm curious to learn about new business models for the solar industry. The computer industry went through a major transition from the 1970s (mainframes, minicomputers) to the 1980s (personal computers) when costs came down quickly. I expect that the solar industry will move towards more specialization (as in semiconductors) and more contract manufacturing (as in personal computers and cell phones). I'm very curious to find out who will be the leaders as our industry makes this inevitable transition. I'm also curious to find a beer as good as Sierra Nevada Pale Ale.


How will the solar industry look in 5 years from now? And your company?

We will all be very busy installing solar on rooftops with no incentives needed. The industry will have standardized on AC solar panels with integrated wiring, racking and grounding. And Akeena Solar will be happily providing these panels to installers around the world.


Thank you for the interview!


Barry Cinamon will be one of the speakers at the More information and registration for The Solar Future Conference:

<script src="" type="text/javascript"></script>

Stay on top of the global solar market by joining one of our upcoming events.