Eric Hafter, Origami Solar Co-founder / Chairman
When I started exploring a new approach to fabricating solar module frames in 2018, the solar market outlook was strong.
Solar was closing in on natural gas and soon would become the lowest-cost electricity source in the world. The installation of solar was growing dramatically across all segments of the industry, and the global market was becoming less dependent on a few large countries to drive deployments.
All this was cause for celebration and great optimism, but I was concerned about the slowing rate of innovation and cost reduction that had driven industry growth for nearly two decades.
That innovation and cost reduction were seen across all parts of the PV module bill of materials and the solar value chain. All, that is, except the module frame.
Over 20 years, as the cost of other module components came down dramatically, there was very little change in the cost or capability of the aluminum module frame, and it was now a significant chunk of the module cost. And perhaps even more troubling was the significant environmental impact in the form of greenhouse gases (GHG) from aluminum manufacturing.
My co-founder Jack Patton and I started asking critical questions, not only about the design of the module frame and how to innovate, but also about the choice of raw material, aluminum, which had become the industry standard.
Why aluminum? Several system-level components, including racking systems, trackers, and foundations, are made of steel. Why not make module frames from steel?
This line of questioning led us to see how aluminum frame production is linked to centralization of the global supply chain. It also showed us how industry consolidation has bottled up innovation while increasing uncertainty in project scheduling and risks in project development all over the world.
While nobody could have predicted the COVID pandemic or the massive supply chain constraints that would follow, the hidden costs of the industry’s dependence on a centralized supply chain and the choice of aluminum for the frame are becoming clear.
The need for module frame innovation
Today, the module frame represents a significant opportunity for cost reduction. That’s because the aluminum frame is the most expensive part of the bill of materials outside all the parts that go into making the cell, according to Bloomberg New Energy Finance (BNEF).
BNEF pegs the frame cost at roughly 2.23 cents per Watt based on a total cost of 8.9 cents per Watt for everything except the cell—including glass, encapsulant, backsheet, junction box, labor, and more—with the frame taking up 25 percent.
To sustain industry growth, costs must come down. Supply chain constraints have already affected the module market, along with many industries reliant on global trade. In Q2 2021, system prices rose across all market segments for the first time in at least seven years, according to Wood Mackenzie.
The net cost benefit from switching to steel would be about 50 percent. The cost of steel itself is roughly one-third the cost of aluminum, but the steel frame needs about 30 percent more material. In addition, steel frames would benefit from reduced tariffs, shipping, and other costs. The savings would be somewhat unanticipated since we have accepted aluminum as the standard.
Aluminum is three times the price of steel per kg, according to Commodities Research Unit data
The environmental benefits would also be significant. Using aluminum for module frames, manufacturers contribute about 14 kilograms (kg) of GHGs for every 1 kg of aluminum. Steel production generally results in about 1.8 kg of GHGs for every 1 kg of steel. Recycled steel, used extensively in the US, produces even less GHGs. As such, a switch to steel module frames can cut GHGs by 85 percent or more.
By moving to a distributed, regional ecosystem of steel producers and fabricators on every continent, we can also reduce emissions associated with long-distance shipping.
The real obstacle to developing a solar module frame from steel has been devising a process to meet the industry’s testing, handling, and installation requirements.
“We tried to make this work 12 years ago. We saw the potential, but could not get the engineering and manufacturing right,” said Samuel Truthseeker, founder and principal engineer of TECSI and a consulting engineer working with Origami on its breakthrough design.
Due to advances in steel roll forming, Origami Solar has developed a patent-pending frame design that is both manufacturable and can meet the detailed structural requirements and industry testing and certifications required to deliver a bankable product and meet a projected module lifespan of 30 years.
Sources: internationalaluminum.org, World Steel Association 2020 Report
Energy independence and innovation
Our solar power industry stands at a crossroads. To this point, every effort on the global stage has aimed at driving down solar production and installation costs through huge increases in scale. Predictably, consolidation has reached dizzying heights. Not since the 1973 Middle East oil crisis has one set of business interests commanded such control over a key source of energy.
Over the past five years, 91 percent of new polysilicon processing capacity has been built in one country, according to BNEF. Almost all the world’s solar wafer manufacturing capacity is coming from the same country, as are many of the non-silicon raw materials accounting for half the value in a solar module, including the frame, backsheet, and junction box.
The decades-long cost reduction curve has fueled the deployment of PV. Any risk to that causes concerns for developers and IPPs. But centralized supply and monopolies are never good long term. Eventually the industry will pay the price. As the economist Milton Friedman liked to say, there’s no such thing as a free lunch.
Seeing the cost per Watt of solar modules drop by over 90 percent in a decade, it’s tempting to consider the savings as something like a free lunch. More efficient modules. One-tenth the cost. A dramatic increase in demand and deployments.
The tradeoffs have come in the form of our renewable energy security and environmental impact (GHGs) and a supply chain that spans half the world, all while world leaders commit to decarbonizing the grid and other sectors of the economy to address our rapidly warming planet.
These goals, including President Joe Biden’s plan for a carbon pollution-free power grid by 2035, depend on scaling up solar module manufacturing by an order of magnitude. Instead of relying on a centralized supply chain in one country, we’ll need a robust supply of silicon, ingots, wafers, cells, and modules on every continent. And with that a regionally supplied steel module frame to support those distributed module factories and de-risking the current supply chain.
Distributed production of steel module frames lets us double down on reducing costs and dramatically reducing GHG emissions while alleviating supply chain constraints. We are confident in our innovative design for a steel module frame and look forward to sharing our testing results and other updates with the industry.
It’s a win-win scenario at a global scale.