I was at Solar Power International last week and a gentleman sat down next to us at lunch. After the customary “hellos” I asked what company he was with. He replied he isn’t…he’s looking for a job after the s-o-l-y-n-d-r-a incident. Truth is, there are about 1,000 people looking for a job once it shut down. For whatever reason people are smearing that company like it was an Enron. Interestingly enough, Skilling was able to retort on Enron’s behalf but nobody from Solyndra can.
Truth is, there’s always two sides to the story and not just because the government is involved, it’s especially since the government was involved. The former employee (name withheld not for any particular reason except I never got his card nor can remember it). Well, this guy worked on the finance part of the company and worked on getting cost per panel down. You probably know Moore’s law but in manufacturing you also reach an economies of scale that when certain thresholds are hit, because you are in such a capital intensive business, that’s when companies do well since most of the cost is not in labor hours (fixed costs vs. variable). That’s why the automotive industry does gangbusters when times are good and nearly go bankrupt when sales are sluggish. Long-story made short it seemed like Solyndra was on their way to reducing losses significantly and a financing deal with the Government for an additional $75 million was taken out of play. Coupled with customers that weren’t paying and voila, they were forced into bankruptcy. Employees were shown the door and FBI agents showed up as they were leaving.
From what I know on this it’s more of a case of competitive products were made cheaper for a variety of reasons and Solyndra couldn’t get their costs down in time nor could they financing to help them out. Would they have lasted or been successful if they did? Well, we’ll never know but there was a fighting chance. My lunch partner seemed to think they could pull themselves around. Sometimes it is better to pull the plug on companies that don’t make money but with 1,000 jobs at stake sometimes it’s also better to take another look. Today’s blog didn’t have much to do with our products but CdS is used as a buffer on CIGS and CdTe solar panels:)
This week we’ll be attending Solar Power International in Dallas. With many of the material prices just plummeting it will be interesting to see what the consensus for this industry’s near future is.
Lower prices for materials means the manufacture can product the products at a cheaper price and it’s more economical, especially for the solar industry, for the end-user to buy. When people buy it car it’s more or less to fit their lifestyle. When people buy solar it’s because it’s going to save them money. Sure there is the occasional purchase because it’s “green” but that’s not the driving force. If it saves someone $ it’s why people buy solar. The lower the price the easier to buy.
Now comes the interesting part…polysilicon spot price was quoted from digitimes.com at $36/kg which is, by some accounts, much less than the actual price to make polysilicon. Some reports say the cost to product polysilicon is $47/kg. So why make it if you are going to lose money? Well, first of all, that is the spot price. Up to 90% of the market is under contract at much higher prices. Secondly, in manufacturing environments it can be even more costly not to be running production at all. You still have capital intensive machinery that costs you whether it’s running or not. Not to mention what are you going to do with your employees? So the quick answer is some of the lower fledgling companies won’t survive long with such low prices and the larger ones are probably just scaling back. Laws of economics suggest that lower prices will increase demand but that’s not the case here. Those companies that can buy are holding onto their cash because of market uncertainty when in past times they would have increased their demand for it. Since the demand is still not there some are just waiting for the bottom…but when and where will that occur? That is the $36/kg question…
It’s interesting…I’ve been reading about Solyndra and the US Government and how they could have loaned $535 guaranteed million dollars to a company that then went bust. There’s a major uproar on both political parties and this blog isn’t about that. What I will say is that my company does sell Cadmium Sulfide which is used as a buffer on CIGS solar panels.
That being said, Solyndra filed for bankruptcy and now everyone is in a tizzy because the US Government loaned them money and now it’s gone. The solar industry is in a very interesting place right now and with silicon prices falling like dominoes my kids are playing with on a Saturday morning. That only further hurts companies with competing technologies like Solyndra. I don’t think there’s any answer for what happened there unless there was fraud or something else along those lines. If they can’t make a profit with their cost structure they shouldn’t be in business. Maybe we should take a step back and ask why they received the loan or the purpose of the loan in the first place?
SunPower received a $1.2 billion loan guarantee, sold a huge chunk of it’s company soon after to a foreign company, and built a manufacturing plant in Mexico with the proceeds. I’m trying to figure out how that loan from the US Government is going to create jobs. Answer, it isn’t. The theory now is that 10 to13 jobs in the USA will be created from that $1.2 billion loan guarantee. That’s roughly 1 new job for every $100 million. On these two loans that’s $1.735 billion dollars, one bankrupt company and another that “might” create 10 jobs. This is just food for thought.
It might come as a shock but over 50% of the Zinc Oxide used is in the rubber industry. ZnO along with stearic acid is used in the vulcanization of rubber to produce such things as tires, shoe soles, and even hockey pucks.
A very important use is that Zinc Oxide is widely used as the buffer layer in CIGS (Copper Indium Gallium Selenide) solar cells. Some current experiments are focusing on the effect of the thickness of ZnO on maximum power output for the cells.
Another main use in in concrete manufacture. The addition of Zinc Oxide aids the processing of concrete and also improves water resistance.
Zinc oxide also has antibacterial and deodorizing peroperties. For this reason it is employed in medical applications such as in baby powder and creams to treat conditions such as diaper rash, other skin irritations and even dandruff. Due to its reflective properties it is also used in sunblocks and can often be seen on the nose and lips of lifeguards at the beach.
Zinc oxide is also used in:
- Cigarette Filters
- Breakfast Cereals
- Paint pigments
- Paint coatings
- Piezoelectricity (delivering alternating current by stretching and releasing zinc oxide nanowires)
- Lazer diodes
- Light emitting diodes (LEDs)
So, when you do see a life guard with the zinc oxide on his nose just remember that’s not the main use for it.