Letter from Shanghai: the Solar Disruption is Accelerating!

Huawei SolarThe solar disruption is accelerating. I spent last week in Shanghai, where I attended the SNEC PV Power Expo 2015 and had the opportunity to meet with a number of global solar executives in China. Here are a few highlights and thoughts from the show.

1- Solar PV costs going down fast.

Solar PV production costs are about 45 ¢/W, according to Arturo Herrero, Chief Strategy Officer at JinkoSolar, a tier 1 Chinese PV manufacturer. Market prices are as low as 55 ¢/W for larger projects (80+MW) in markets without significant tariffs or anti-dumping measures (like the US), according to Mr. Herrero.

Tier-2 manufacturers generally compete on price so they have to sell for even less. I heard from several sources that tier-2 manufacturers are shipping product for less than 50 ¢/W.


2- Information Technology merging with Solar.

One of the premises of my book “Clean Disruption of Energy and Transportation” is that solar is a technology and, as such, it’s governed by information economics and the increasing returns that characterize information products.

Huawei, the $46 billion (2014 revenues) telecommunications company has entered the solar market in a big way. At the SNEC PV show Huawei showed its “Smart PV Plant Management System”, a power plant monitoring solution that combines string inverters, smart loggers, wireless communication equipment, and a grid management center to monitor the power plants.

The marketing manager I spoke with at the show told me that Huawei had shipped 4 GW of smart PV plant product in 2014 and expected to ship 10 GW in 2015, which I found hard to believe. The company’s product collateral did say that the company had 5.5 GW in orders and 4GW in shipments for 2014.

Whatever the numbers are, Internet companies are finding out that the distributed technology nature of solar is very much in tune with the distributed nature of information technology.


3- China has achieved critical mass in solar PV manufacturing.

The SNEC solar expo was far larger than any solar expo I have been to. More than 150,000 attendees came to Shanghai to visit 1,500 companies covering 180,000 square meters of exhibition space. By comparison, Intersolar Europe 2014 had 42,300 attendees who came to visit 1,100 companies covering 88,000 m2 of exhibition space.

Most of the companies at the show were Chinese and they represented nearly every aspect of the solar PV manufacturing supply chain. China has probably achieved a critical mass in solar PV – which feeds the virtuous cycle of further gains in scale and innovation that lead to even lower production costs.


4- China is already the world’s largest PV market.

China installed more than 5 GW of new solar capacity the first quarter of this year. ([i]) This is just under the 5.6 GW that France has installed in its whole history. ([ii]) China is planning to install a total of 17.8 GW in 2015 which is just under the 18.3 GW that the United States had installed in history as of the end of 2014. ([iii])

By becoming both the world’s largest manufacturer and the world’s largest market, China can further increase innovation advantages that accrue when co-locating R&D, manufacturing and markets. This can push the PV learning curve even further – which leads to even lower cost of solar.

As PV costs keep going down, the solar disruption around the globe will accelerate even more.

SNEC Solar Expo 2015

SNEC Solar Expo 2015




5- Clean Disruption, Internet Disruption and Solar Disruption

Solar energy is pushing energy production, storage, and management to the edges (customer sites) from the center (centralized power plants). These distributed solar sites are getting smaller, smarter, more modular and connected.

The solar disruption has many of the same characteristics of the information technology disruption. Just like the Internet turned our information publishing world from centralized to distributed, we’re headed toward a distributed architecture of energy made possible not just by solar and storage, but also by software, sensors, artificial intelligence, mobile internet, big data, satellites, nanotechnology, artificial intelligence, and other exponentially improving technology.

Extraction-based economics (based on scarcity and increasing marginal costs) have no chance against solar and information-based economics (based on abundance and decreasing marginal costs.)

The solar disruption is accelerating!






Toyota vs. Tesla – Can Hydrogen Fuel-Cell Vehicles Compete with Electric Vehicles?

The world has been abuzz about the recent Toyota (NYSE: TM) announcement that the company opened up licensing of its 5,680 HFCV patents (although only until 2020.) By taking a page from the Tesla playbook, Toyota  is hoping to encourage an ecosystem of fuel cell suppliers and hydrogen fueling stations.

Tesla Factory - Freemont California

Is this the last hurrah of a dead-end technology? Or will it re-invigorate the HFCV market which has gone nowhere for decades? Does the Hydrogen Fuel-Cell Vehicle (HFCV) Matter anymore?

Elon Musk, CEO of Tesla (NASDAQ: TSLA) has called the HFCV ‘bullshit’. “Hydrogen is suitable for rockets but not for cars,” said Mr Musk. (Video, starting min 29:20.)

But Jim Lentz, CEO of Toyota North America says that his company is betting big on hydrogen fuel cell cars. Does the Hydrogen Fuel-Cell Vehicle (HFCV) have a chance against the Electric Vehicle (EV)?

I don’t even mention Hydrogen Fuel Cell Vehicles in my book “Clean Disruption of Energy and Transportation”! There are multiple reasons for that. Let’s look at the facts, starting with the basics.

1) Hydrogen is not an energy source.

Many industry insiders talk about hydrogen as if it were an energy source. For instance, they might compare it with, say, petroleum products like gasoline and diesel, and say that H2 produces no emissions. Hydrogen is not an energy source. It’s an energy carrier. It’s a form of storage. You need primary energy sources like the sun, coal, natural gas, or uranium to generate the power needed to extract Hydrogen from a source material like natural gas or water.

2) Electric Vehicles are at least three times more energy efficient than Hydrogen fuel cell vehicles.

Assuming that at some point fuel-cells will be cheap and Hydrogen production will reach critical mass, it will still be at least three times more expensive to power an HFCV car than an EV. This figure from fuel cell expert Ulf Bossel explains how wasteful an HFCV is compared to electric vehicles. (Source:


Hydrogen Fuel Cell Vehicle vs Electric Vehicle - Energy Efficiency

Hydrogen Fuel Cell Vehicle vs Electric Vehicle – Energy Efficiency

But not all hydrogen vehicles are made alike. You can use compressed or liquefied hydrogen. You can also use either internal combustion engine of fuel cells to power the car. The following chart shows that whatever choice of type of hydrogen and engine results in the electric vehicle going three to six times more miles for the same energy when compared to hydrogen-powered cars. (Source: BetterPlace)

Hydrogen Cars vs Electric Vehicles - Better Place

Hydrogen Cars vs Electric Vehicles – Better Place


3) You need to build a multi-trillion dollar hydrogen delivery infrastructure.

To build a so-called “Hydrogen Economy” you need to build a multi-trillion dollar infrastructure with large factories/refineries, pipelines, trucks, storage facilities, compressors, hydrogen gas stations, and so on. If you haven’t noticed, this mirrors the existing oil & gas infrastructure. (Source:

Department of Energy - Hydrogen Delivery Infrastructure

Department of Energy – Hydrogen Delivery Infrastructure

Electric vehicles, on the other hand, have a ready infrastructure: the power grid. Everyone who lives and works in advanced economies has access to electricity. Yes, our grid is aging and we need to upgrade it, but it works today. Some readers may remember that the Internet started with the plain old telephone system. It wasn’t fast but it worked. Then we upgraded it to get the fast pipes that we have today. We also built a brand new wireless infrastructure that required no pipes at all.

Distributed Solar PV and EV Charging Station. Copyright @2014 by Tony Seba

Distributed Solar PV and EV Charging Station. Copyright @2014 by Tony Seba

The electric vehicle equivalent of the wireless power infrastructure is distributed solar.

The multi-trillion dollar hydrogen infrastructure would have to be built from scratch.


4) Hydrogen is Not Clean.

About 95% of hydrogen in the US is made from natural gas in large central plants, according to the Department of Energy. It’s a method called natural gas reforming.

Hydrogen Methane Steam Reforming Process - Source HYFleet:CUTE - Global-Hydrogen-Bus-Platform

Hydrogen Methane Steam Reforming Process – Source HYFleet:CUTE – Global-Hydrogen-Bus-Platform


As I wrote in Clean Disruption of Energy and Transportation:
Methane (the main component of natural gas) is 72 times worse than CO2 as a greenhouse gas (when measured over twenty years). Natural gas leaks throughout the supply chain. It leaks when it is lifted from the ground, when it is stored, and when it is transported in hundreds of thousands of miles of pipelines. According to the U.S. Environmental Protection Agency, three trillion cubic feet of methane leak annually. That figure represents about 3.2 percent of global production. This methane leakage is the global warming equivalent of half the coal plants in the United States.

Today, hydrogen is basically a repackaged fossil fuel – a fossil product line extension, if you will. If you like natural gas and fracking you should love hydrogen.


5) Hydrogen is not ‘Renewable’!

Hydrogen is classified as ‘renewable’ when it’s extracted from water by means of hydrolysis. This method involves applying high voltage electricity to split water into Oxygen and Hydrogen. When you apply conventional electricity to do the hydrolysis you still have to burn coal, natural gas, nuclear, petroleum, and so on, so you still have dirty hydrogen.

We need to pause to consider the water-energy-food nexus. Conventional energy is thirsty. In my books Clean Disruption and Solar Trillions I write at length about the obscene amounts of freshwater that coal, natural gas and biofuels consume. By adding Hydrogen to that list we would have yet another way for energy to dry up our planet.

A well-to-wheels analysis by University of Texas Professors Carey W. King and Michael E. Weber found that a HFCV would need to withdraw 13 gallons of water per mile driven. The same study concludes that a gasoline car would need withdrawals of needs 0.63 gal H2O/mile and a diesel car would need 0.46 gal H2O/mile. That is, gasoline petroleum-based transportation is 20 to 28 times more water efficient than hydrogen.

If we use solar or wind power as the source of the electricity for hydrolysis then you could have ‘clean’ and technically ‘renewable’ Hydrogen. I say ‘technically’ because the world is already pumping water at non-sustainable, non-renewable rates and the massive amounts of water you’d need for hydrogen would just contribute to the world’s water crisis. A 2015 World Economic Forum report ranks water crises as top global risk, up from number three the previous year.

Powering EVs using solar and wind would use no water, according to Prof King and Weber. Plus EVs are at least three times more energy efficient than Hydrogen Fuel Cell Vehicles.


6) Hydrogen Fuel Cell Vehicles can’t compete with Electric Vehicles.

It makes sense for the fossil fuel industry to lobby for the hydrogen car because hydrogen is essentially a product line extension for them. In other words, the “Hydrogen Economy” is the “Fossil Fuel Economy” with a green sheen.

The HFCV is a substitute technology. If successful, hydrogen would just substitute the fossil fuel infrastructure with a mirror hydrogen infrastructure.

Former DOE Secretary Steven Chu said: “We asked ourselves, ‘Is it likely in the next 10, 15, or 20 years that we will convert to a hydrogen car economy?’ The answer was no,”

It’s obvious why I don’t even mention HFCV in my book “Clean Disruption of Energy and Transportation”! Hydrogen Fuel Cell Vehicles are neither clean nor disruptive. At best, a hydrogen economy would still be a massively wasteful economy that would at best use three to six times more energy than an electric vehicle and solar/wind infrastructure and many times more water than even gasoline uses. There are many good reasons why hydrogen fuel-cell vehicles are stuck in reverse while electric vehicles are on hyper-drive.

By 2030, 100% of cars will be electric and they will be 100% powered by solar and wind. (Watch my AltCars keynote here)


It’s time to move on from hydrogen fuel cell vehicles.

Grameen Shakti - Solar Home System Adoption Curve

Can the Poor Afford Solar?

Seventy percent of the Bangladeshi population has no access to electricity—a shameful number in a nation with such great solar radiation. Lack of energy makes it difficult if not impossible for people to better themselves socially and economically. Without electricity you can’t run an efficient poultry farm, a food catering business, or even a basic home sewing business.

So Grameen Bank founder and Nobel Peace Prize winner Dr. Mohammed Yunus started Grameen Shatki to bring solar power to the people. GS would employ the same principles as Grameen Bank: to give poor and rural people access to a resource with which mainstream institutions and “the market” had formerly neglected to provide them.

In 1997, Grameen Shakti provided the know-how and the credit for the installation of 228 solar panels. GS trains installers who go door-to-door in rural centers promoting the benefits of solar electricity. Since most homemakers are women, 50% of these installers or “engineers” are also women. Bangladesh is a socially conservative country. Having men performing these duties is problematic because it’s not considered appropriate for women to be visited at home by a man who is not their husband or other close family member. But this very restriction on women at home creates an opportunity for other women to learn skills and earn money.

Over the decade after 1997 Grameen Shakti grew almost a thousandfold. By 2008 it had installed a cumulative 220,000 “Solar Home Systems” and was still growing at 100% per year. It had also provided “green jobs” to 8,000 people, of whom 4,000 were “engineers” or installers. Most of these 4,000 people were school dropouts (it’s common in Bangladesh for girls to leave school very early in order to help at home) who might otherwise not have had a chance at decent jobs and economic advancement. (2)

Grameen Shakti - Solar Home System Adoption Curve

Bangladesh Solar Home System Adoption

The cost of a Grameen Shakti solar home system (SHS) including the (Japanese) rooftop solar panels, the electronic components, and a battery is $350-$400. Buyers put down 10-15% of this cost and get a 3-year loan to amortize the system (2). At this point they own a solar generating system that should provide electricity for 20 years.

The energy capacity installed by Grameen Shakti as of March 2009 is 11 MW, equivalent to the PS10 tower power plant in Seville. This capacity benefits up to 2 million people daily and produces 44 MWh per day. (3) The electricity lights up homes, powers television sets, and recharges cell phones at night.

These solar generators are mainly displacing kerosene, which is people’s main source of light and cooking energy throughout Bangladesh—and throughout much of the poor world. Kerosene costs up to $2 per kWh, about 20 times what I pay for electricity in San Francisco. The poorest of the poor are paying much more than we are, both in absolute terms and as a percentage of their incomes!

What’s more, kerosene also kills people, not just by fire but by producing noxious fumes. According to UNESCO, more than two million children died from acute respiratory disease in 2000; 60% of these deaths were associated with indoor air pollution and other environmental factors (4). Kerosene is not just expensive. It’s downright dangerous.

Meanwhile, solar energy is even more capable of distributed operation than cell phones are, since solar PV has no need even for transmission towers. The potential to reach everyone everywhere and give them access to modern energy is unique to solar. Can anyone say “democratization of energy”?

The sky is literally the limit for the growth of solar energy. Grameen Shakti plans to install one million solar home systems by 2012 and wants to create 100,000 green jobs by 2015 (5). Create jobs and advancement opportunities for the poor, save children’s lives, and save the planet too? This sounds like another Nobel Peace Prize to me. In January 2009 Dipal Barua, who spun off Grameen Shakti from Grameen Bank in 1997 and has been its Managing Director since, won the $1.5 million Zayed Future Energy Prize (6).

Grameen Shakti proves that a profit-making, market-based enterprise with a social purpose can give millions of poor people access to electricity without a transmission grid
, just as China proved that similarly inexpensive processes can give phone access to hundreds of millions without a traditional telecommunications infrastructure.

Solar makes Power to the People an affordable reality. Today.

Adapted from “Solar Trillions – 7 Market and Investment Opportunities in the Emerging Clean-Energy Infrastructure”, Chapter 6 – Opportunity IV—”Power to the People: Residential-Scale Solar” (Copyright © 2009 by Tony Seba). Available at

(1) Grameen Shakti “At A Glance March 2009,”
(2) “Grameen Shakti Brings Sustainable Development Closer to Reality in Bangladesh” ,, January 21, 2009,
(3) Grameen Shakti “At A Glance March 2009,”
(4) United Nations Education Scientific and Cultural Organization (UNESCO) World Water Assessment Programme
(5) Grameen Shakti “At A Glance March 2009,”
(6) “Zayed Future Energy Prize Recognizes Dipal C. Barua,” Reuters, January 19, 2009,

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