Aurora Solar taps rich vein of demand for solar panel efficiency
Michael Heaven built a career designing quality control systems in the pulp and steel industries. He discovered that solar panel manufacturers operate with standard deviations that would make an old-fashioned commodity industry executive feel light headed.
He set up Vancouver-based Aurora Solar Technologies Inc. (TSXV: ACU | OTCBB: AACTF | FSE: A82) in 2009 with a former colleague, Gordon Deans, to create a global quality control system (QCS) for the solar panel industry. Winning clients such as Korea’s LG Electronics and Hanwha Q-CELL, revenue for the quarter ended Sept. 30 surged to $1.4 million, quadruple that of a year ago. Aurora has a sizeable backlog.
Solar is a maturing industry where manufacturing costs tumbled and governments are cutting subsidies, leading to greater competition. Panels cost $0.30 a watt in 2017, from $3.50 a watt when Heaven started Aurora. The company’s QCS reduces factory-line deviation by identifying defects in real time and can mean the difference between profit and loss for a panel maker, said Heaven.
“I have never seen the level of variability in other processes such as pulp and paper, plastic, auto parts, etcetera, that all talk six sigma,” Heaven said. “In the solar cell manufacturing industry, 20% to 30% of the cells come out with lower power than the target and sell at break-even or even below cost just to recover the raw material costs.”
Six sigma is a standard industry practice to root out variability in production lines. Deans started selling robotics equipment to solar panel makers a decade ago and discovered there was no industry-wide QCS. He and Heavens, his former colleague at telecommunications firm Norsat, worked with the University of Alberta to design an infrared scanner that can detect defects in silicon wafers found in solar panels, and they started their business.
Critically, the infrared technology works with a new generation of next-gen solar panels that can cut costs for manufacturers. Bifacial solar cells and passivated emitter real cell (PERC) cells can capture direct and diffused sunlight from multiple angles and generate more energy. Aurora Solar’s nearest competitor, Budapest-based Semilab, doesn’t have this capability to scan bifacial or PERC technology, Heaven said.
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The company said it that it can offer customers a return on investment of more than $1 million per panel production line, per year, Heaven said. This represents a $300 million market opportunity for Aurora if its systems were fully adopted by the industry. Aurora Solar won a contract to supply China’s Jinko Solar, the world’s largest panel manufacturer, auguring a bigger presence in China’s panel manufacturing marketplace.
Solar companies are expanding capacity between 15% and 25% a year to meet global demand, Heaven said. The solar market will achieve revenues of over $1.2 trillion by 2024, as China and other parts of Asia add more solar and other renewables to their power grids, according to panel maker Trina Solar. The photovoltaic industry will install 100 gigawatts of solar panels in 2017, equivalent to half the installed capacity on Germany’s power grid. China installed over half that amount alone, Heaven said. The industry will grow by a similar margin in 2018, he said.
Global installed solar generating capacity more than tripled in the past four years, according to the Statistical Review of World Energy published by UK petroleum giant BP Plc. BP, which previously invested in solar panel makers, predicts high growth for the solar industry after invested $200 million in European solar project manager Lightsource in December.
Matt Craze has covered commodity markets for more than 20 years, working as a research at CRU International, and for over 10 years as a ... <Read more about Matt Craze>