Thursday, September 9, 2010

The Bankability of PV Tech: The New Key to Success

A decidedly non-technical term was in vogue this week at the very technical 25th European Photovoltaic Solar Energy Conference (EUPVSEC). The term “bankability” was often used to describe the likelihood of success of a given technology. In these days of scarce capital, the only projects that will be funded are those that banks and insurers have deemed to be fund-worthy (outside of China anyway). “Banks demand extensive performance and reliability data before funding major installations,” noted one presenter from Applied Materials, claiming that this was “critical for market penetration of a new PV technology.” This particular presenter was discussing the merits of thin film PV tech, but crystalline PV suppliers were making similar arguments regarding the bankability of their own technology, which is arguably more proven and certainly more mainstream.

How this will play out is anybody’s guess, since long-term reliability is somewhat of a guessing game based on an extrapolation of models and limited field tests, particularly when it comes to new materials. Almost all PV module suppliers offer 20-25 year warranties but nobody really knows how panels will withstand the test of time. Corrosion can creep in, plastics can yellow, dopants can move and electromigration can lead to increases in line resistance. Many PV proponents believe solar farms being installed today will live on in perpetuity, since the world will always need power and the sun will always shine, but materials do tend to wear out.

Maybe bankers can intuit the viability of given technology better than expert physicists, but I suspect their questions of bankability will only be answered by reams and reams of data which they are ill-prepared to decipher.


Michael said...

Bankers want to know the rate of return, that someone is buying the output, that the length of the power purchase will be sufficient to cover the desired rate of return. They want to know the land and permits are secured. As for the rate, they prefer three years full return, considering everything all in. They want to see a track record. If the numbers work, they work.
As far as the technology goes, the longer and more in the field, the better. Track record. Technology is just widgets.

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