Tech giant Intel joins IBM and Applied in big solar bet

Following on the 2006 and 2007 announcements of technology giants Applied Materials and IBM moving into the solar sector, Intel has joined the fray in 2008 with the spinout of SpectraWatt, its newly created solar division.

I had a chance to chat with Andrew Wilson, a longtime Intel guy who is the CEO of Spectrawatt, about what he is doing. The venture is the result of the last 3 years of extensive business planning, that Andrew said grew out of an off the cuff conversation he had internally four years ago.

While they have very early stage development in the works for some new and novel technology to reduce the manufacturing costs of solar cells, they are not sharing details. The Spectrawatt core business today will be about building a company to manufacture crystalline silicon based solar cells. In the near term the business will be buying wafers and manufacturing cells. According to Andrew, they have a significant supply of silicon secured, and while he cannot say who the vendors are, at least one of those vendors will likely be announcing soon, as the Spectrawatt contract is a material event for them.

So the first question is why x-Si and not thin film? Besides the obvious that it is far and away the biggest market today and a natural fit for Intel, Andrew added two more. Customers care about per kwh cost, and all things equal, how much energy they can get out of the real estate they have (read, efficiency matters). So they think x-Si makes a lot more sense than thin film, especially given the additional issues around stability, manufacturing complexity and materials resource constraints.

Andrew did say that they may vertically integrate later. So I asked why did they start at cells? Andrew explained that since the business comes out of Intel, and Intel is accomplished at processing wafers into products, cells made sense to start with. And at the end of the day they hold the view that the biggest point of value in solar value chain is in creating the cell, moving from low value silicon to high value device. They consider it the largest single value add step.

Andrew and I are in agreement that 2004 was a kind of a magic year changing what the photovoltaic industry is. Andrew stated it was the first year where the average company in every segment of the value chain in solar became profitable. So given today's environment Intel and Spectrawatt could have conceivably started at numerous places in the value chain. This is where the vertical integration may come in. His view on the silicon supply is that no glut is coming, or at least not a long lived one. The end demand market is growing at 30 to 40% per year, and the silicon supply that is coming on line is in large part subject to long term contracts with fixed prices. The silicon supply additions then are pretty much already spoken for. In Andrew's mind while growth at the margin will definitely cause some level of boom bust cycles, those long term supply contracts may moderate it more than other people believe. If he is right, and he has secure supplies, a horizontal business like cell manufacturing is a great place to be. If he is wrong, he sees continued vertical integration to manage the growth issue as one of the major avenues industry participants will go done. In this he and I also agree, rapid movements in supply cycles tend to reward vertical integration. And if he gets big enough with Spectrawatt, vertical integration could be a move Spectrawatt makes, too.

It is great for the solar industry to see more technology giants like Intel joining the fray, and perhaps helping drive down crystalline product costs the same way Applied Materials and IBM are looking to drive down then film costs.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding CEO of Carbonflow, founding contributor of Cleantech Blog, Chairman of Cleantech.org, and a blogger for CNET's Green Tech blog.

[Manhattan2]

Intel, IBM, Applied Materials and yes even Al Gore have to re-think solar power. The intentions of these companies and Al Gore may be just, but the way everyone is going at Solar Power is all wrong. It has to be something that everyone no matter where you live can participate in. It also has to be discouraged for individuals like Al Gore and others to show off their greenness by putting photovoltaic solar panels on their rooftops. We will say it again because that is phase 1 of the 5 phase Solar Transfer program. Keep solar panels off your rooftops! The planet and your wallet would be better served if you understand the logic behind a Solar Transfer. We suggest Intel and others step back and give us a call. There is sense behind the work being performed in the Manhattan 2 Project!

[expatincebu]

Hey manhatten, are to elaborate about the "5 phase Solar Transfer program". I did a google and came up with nada. Why not put panels on my roof? What's the deal skippy? Inform us or at least give us a link.

[expatincebu]

Hey manhatten, are to elaborate about the "5 phase Solar Transfer program". I did a google and came up with nada. Why not put panels on my roof? What's the deal skippy? Inform us or at least give us a link.

[Zeist]

WWW.COOLSOLAR.COM

[Manhattan2]

Google "Solar Transfer" and you will find enough to understand where phase 1 begins. Phase 2 is a Solar Transplant and that is also easy enough to find. Everything else will only be revealed when people are ready to listen. The answers are out there. The million solar roofs program is a mistake. Google Al Gore and Solar Transfer and you will see the early work on Solar Transfer. Bill Clinton has been made aware of the program and sent a nice letter of encouragement back. The question is who in the government is ready to step up to the plate and deal with the energy crisis and address the mistakes we have made that have kept Solar and Wind under 1% of our toltal energy production. With a predicted increase of required energy over the next 2 decades can anyone say crisis in the making. It is time we satrt to ask ourselves what oil should be used for more importantly than transportation. Are there fertilizers, plastics, or other requirements that Oil should be set aside for before we drink it up in our vehicles. John McCain is now talking about opening up offshore drilling in the US. Is that the answer? Is it a needed fix, or is it accelerating the depletion of the reserves that may be needed for more important things in 20 or 30 years. Email us at [e-mail] when you understand where we are headed or even if you want to argue your own points.

[willdryden]

solar panels are here now. You have been talking about solar transfer for over 2 years on every solar panel comment area I have seen. You still have no product. Until you do, we will use what is available.

[Manhattan2]

The words alone are hopefully getting read. The only people seeking the current solutions for solar are either green enthusiasts who do not make up enough of a percentage of the population to make a difference or they are Solar Installers and manufacturers pushing products to try to get more investment dollars. Without incentives paid by all of us the solar industry in its current makeup will never thrive. 99 percent of all residential solar installations are being done in error. When you come to realize the words have meaning you will see our program will change the solar industry forever. Email us when you understand a 3-4 fold increase in the energy capture can be achieved by us today! That is 3-4 times more power for the same dollar. That means Al Gores solar investment could have produced 3-4 times more renewable energy for the next 30 years. Now do you see why we have a problem with someone putting solar panels on their roof just to look green! Google has likely made the same error but still get some level of financial assistance from state or federal governments. That's us helping pay for a poor design! We will have to stay independent which will slow our implementation but the only way the big problems will be fixed are from sensible ventures like Solar Transfer. If you are thinking about going solar email us and we will give you free information that could save you thousands of dollars and more importantly help ypu help the planet 3-4 times more!