July 18, 2006 12:01 PM PDT
Newsmaker: Cypress CEO: Time to take a different tack on energySee all Newsmakers
Net neutrality? It's un-American. Government-funded research projects? Mostly, they are flops. The clean tech energy boom? It's overblown. A libertarian, he has promoted a market-driven approach to expanding Silicon Valley for years.
He's in a slightly odd spot now. SunPower, a fast-growing manufacturer of solar panels, is a subsidiary of Cypress, and solar power is heavily subsidized. Rodgers admits it's a contradiction, but says the subsidies will decline as the cost of generating electricity the traditional way skyrockets.
Q: Give us the rundown on how SunPower became a subsidiary of Cypress.
Rodgers: SunPower we bought when they were a very small company, a few million dollars per quarter. I knew the founder, Dick Swanson, and they had a highly efficient solar cell. We invested a couple hundred million dollars and built the manufacturing plant.
One of the problems with a lot of these environmental ideas is that they are demos. Unless you can commercialize the technology, it doesn't have much impact. So we invested a couple of hundred million dollars in making the technology commercially available.
You've always been a big advocate of free-market policies and not having the government interfere. And yet solar is one of the most heavily subsidized industries out there. How do you square that with your own belief?
Rodgers: I'll agree with your general premise and the apparent contradiction there. Today, in the world, I would not call solar heavily subsidized. For example, in the second-largest market, which is Japan, the national subsidies ended last year. Japan did have a 10-yearlong subsidy to just start the industry. But today, the Japanese national government doesn't pay anything to subsidize.
Now, the bad news is the reason that they don't have to pay anything is that power is so expensive over there. But on the other hand, that's just going to happen to everybody shortly. Power is going to become so expensive that the subsidies won't matter.
I don't like subsidies. I don't think the government ought to be taking money from people and giving it to other people, for any reason. If I had a choice to vote for getting rid of subsidies to corporations, including SunPower, I would vote for it. Having said that, the subsidies in Germany--I'm all for the German subsidies (laughs). I'm real happy to take money from the German government...I just don't like American subsidies. But I think you could probably credit national subsidies with an acceleration of something like 10 years (in) getting solar rolling.
How long will it be in the United States before we see solar energy at parity with regular electricity, and we can start eliminating the subsidies?
Rodgers: Right now, the subsidy for a (solar) system is about 30 percent, and our subsidy is basically the government, in the form of rebates and other incentives. If you pay $10,000 for a system, they will give you a rebate at $3,000, so you end up paying $7,000. That tells you right there that if the price of solar energy drops by 30 percent, it will stand on its own and it won't need to be subsidized anymore.
Dropping the price of solar energy by 30 percent is not a big stretch. We need more capacity online to get more silicon. One of the reasons solar energy costs as much as it does today is that there is not enough silicon. Solar energy actually is going to burn more silicon this year than semiconductors, so we need more silicon.
We also need it to be back at the price that it used to be at, which is about less than $40 per kilogram. It is up to as high as around $90. We need to be able to make solar cells that are thinner, reliably. The problem right now is that solar cells are in the order of 250 microns thick, and that uses a lot of silicon. It turns out you don't need that much silicon. The energy conversion pretty much happens in the skin of the wafer. That means we need better manufacturing equipment.
And we need higher efficiency (in converting sunlight into electricity). SunPower has demonstrated cells of 22 percent efficiency already. The energy that's in solar today is typically at 15 percent efficiency. Twenty-two percent is going to give you 50 percent more power from the same amount of silicon.
And the last point, which is surprising for me, is that we need to cut the cost of installing solar energy more than in half.
Do you mean the frames and other things that hold them on roofs?
Rodgers: Well, not even the frames. Right now?the modules are $3.50 to $4 a watt. Installed solar energy on your house is $8.50 a watt. Just to put it on your house doubles the price. We've got to fix that.
Are you guys looking at thin film at all or CIGS (a type of non-silicon solar cell promoted by HelioVolt and BP, among others)?
Rodgers: No, I am firmly convinced that silicon for the next decade is going to be the primary solar energy material for several reasons. One is reliability. Silicon has a reliability record which is unmatched by any other material. The second reason is efficiency. These CIGS materials have efficiencies that are under 10 percent, so we get more than two-and-a-half times of energy.
Some claim they are close to equal to silicon in terms of efficiency.
Rodgers: You go buy one. You know, that's another problem we've got in the industry. There are a lot of con men in the solar industry who say a lot of things that are really, really, very wrong.
What do you think of biodiesel and vegetable oil vehicles? I know it's not your business, but some people say there is a pretty strong case for those technologies.
Rodgers: Biodiesel is a great concept. You can grow your gas and then burn it, and grow it again and burn it, and grow it again. You've got to (adopt) the process to where you're not adding extra carbon to the environment. The question is, can you do it economically? I don't want to second-guess the people that are trying--I'm not an expert--and they'll surprise you when they do. Who is to say that there isn't a yet-to-be-invented, fast-growing genetically modified plant that produces an extraordinary amount of oil that couldn't be used for a significant fraction of power in the United States?
The sad story about ethanol (is that) it has been subsidized too much. There is an ethanol company in the Midwest that receives an extraordinary amount of government subsidies, and some say the subsidies are greater than the cost of production. And to me, that kind of puts a taint on alcohol, although alcohol mixed with gasoline is obviously a fuel, and it's obviously a fuel that works well.