Case Study Report US SunShot Initiative and reflections of the Chinese solar energy policies - Mission-oriented R&I policies: In-depth case studies
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Mission-oriented R&I policies: In-depth case studies
Case Study Report
US SunShot Initiative and
reflections of the Chinese
solar energy policies
Eva Arrilucea, Hanna Kuittinen
February 2018
Case Study Report: US SunShot Initiative and reflections of the Chinese solar energy policies
European Commission
Directorate-General for Research and Innovation
Directorate A — Policy Development and Coordination
Unit A.6 — Open Data Policy and Science Cloud
Contact Arnold Weiszenbacher
E-mail arnold.weiszenbacher@ec.europa.eu
RTD-PUBLICATIONS@ec.europa.eu
European Commission
B-1049 Brussels
Manuscript completed in February 2018.
This document has been prepared for the European Commission however it reflects the views only of the authors, and the
Commission cannot be held responsible for any use which may be made of the information contained therein.
More information on the European Union is available on the internet (http://europa.eu).
Luxembourg: Publications Office of the European Union, 2018
PDF ISBN 978-92-79-80161-7 doi: 10.2777/967418 KI-01-18-152-EN-N
© European Union, 2018.
Reuse is authorised provided the source is acknowledged. The reuse policy of European Commission documents is regulated by
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2
EUROPEAN COMMISSION
Mission-oriented R&I policies: In-depth case studies
Case Study Report
US SunShot Initiative and
reflections of the Chinese solar
energy policies
Eva Arrilucea
Hanna Kuittinen
A Study coordinated by the Joint Institute for Innovation Policy
February 2018 Directorate-General for Research and Innovation
3
,
Table of Contents
1 Summary of the case study ................................................................................... 3
2 Context and objectives of the initiative ................................................................... 5
2.1 Contextual factors and origins of initiatives ..................................................... 5
2.2 Strategic and operative objectives and milestones of the initiatives .................... 8
3 Resources and management ................................................................................ 13
3.1 Governance and management model ............................................................ 13
3.2 Financing model......................................................................................... 14
3.3 Key actors involved in the initiative .............................................................. 15
3.4 Monitoring system and evaluation of the initiative .......................................... 16
3.5 Level and type of citizen engagement in the initiative ..................................... 17
4 Policy instruments and wider policy-mix used for implementing the initiative ............. 17
4.1 Description of the R&I policy instruments used for implementing of the initiative
............................................................................................................... 18
4.2 Connections with other policies .................................................................... 22
4.3 Key turning points of the initiative and policy adapatation measures ................ 25
5 Realised or expected outputs, outcomes and impacts ............................................. 25
5.1 Outputs, outcomes and impacts ................................................................... 25
5.2 Summary of the key indicators .................................................................... 30
6 Conclusions and lessons learned .......................................................................... 31
6.1 Identification and assessment of key strengths and weaknesses of the initiative 31
6.2 Lessons learned and key messages for European R&I policy ............................ 32
References: ................................................................................................................ 34
2
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1 Summary of the case study
Summary fiche
Title: US: SunShot Initiative
CN: Chinese Five-Year Plans for solar energy
Country: US and CN
Thematic area: Energy
Objective(s): US: To lower the costs of solar energy to make it cost-competitive with
other forms of energy generation by 2020. In September 2017, it was
announced that the utility-scale photovoltaic energy cost target had
been met three years ahead of schedule. The initiative will continue to
work to lower the cost of solar energy and has established a goal to
reach 50% reduction of the cost of solar energy by 2030.
CN: China's 12th Five-Year Plan (2011-2015) set a dedicated plan for
solar energy. The aim of the plan was to reduce the price of solar power
and to increase the manufacturing of PV systems. Other objectives were
to increase R&D for key technologies, developing new, advanced
technology and manufacturing processes for PV, promoting favourable
policies for the domestic market and improving PV standards, product
quality inspection and certification systems. The 13th Five-Year Plan
(2016-2020) continues providing support to Chinese solar energy
sector.
Main governing body: US: The Solar Energy Technology Office (SETO) at the US Department
of Energy (DOE).
CN: The Five-Year Plans are governed by the Chinese National
Development and Reform Commission (NDRC), the central planning
agency in the People's Republic of China. The Chinese Ministry of
Science and Technology (MOST) is the main responsible of the solar
R&D in the country.
Timeline: US: 2011-2030
CN: 2011-2020
Budget: US: 2011-2016 USD 1.6 billion (EUR 1.3 billion). Annual budget 2016:
USD 241.6 million (EUR 194.0 million).
CN: NA. The total budget to solar energy USD 150 billion in 2016-2020.
Brief description of the US: The SunShot Initiative was launched in 2011 by the US Department
case (250 words) of Energy’s Solar Energy Technologies Office (SETO). The overall
mission of the SunShot is to support solar energy adoption by making
it affordable and cost-competitive with other forms of energy by 2020.
More specifically, the goal set in 2011 was to reduce the costs of solar
technologies by 75% before 2020. Due to the technological progress
made and overall market conditions of solar systems, the targets have
been updated to reduce the costs of solar energy by an additional 50%
between by 2030.
CN: The Chinese Five-Year Plans highlights solar energy as one of seven
strategic emerging industries subject to specific government support,
preferential treatment, public planning and control of the industry. The
guiding principles of the plans is to implement and apply scientific
findings in industrial applications, and to seize the global opportunities
created by the transition of the energy systems and strengthening the
Chinese PV industry competitiveness. The plan also aimed at reducing
the costs of PV power generation and quality improvements of the PV
products and production technologies.
Implementation and US: The initiative is coordinated and managed by SETO and it is
organisation (a brief implemented by R&D funding calls targeted to universities, National
description of the Laboratories and companies. The funding calls are launch under five
governance and policy sub-programmes of SunShot: Photovoltaic R&D, Concentrating Solar
instruments used) Power, Systems Integration, Balance of Systems/Soft Cost Reduction,
Innovations in Manufacturing Competitiveness and the National
Renewable Energy Laboratory Support. The applications are subject to
rigorous peer-review based selection process, successful completion of
a negotiation process, including a statement of project objectives,
milestones, and budgets. Since the launch of SunShot, close to 300
projects have been funded and currently there are 253 ongoing
projects.
CN: The Five-Year Plans are governed by the Chinese central
government and the Chinese National Development and Reform
Commission (NDRC). The Ministry of Science and Technology (MOST),
uses multiple programmes to implement the development goals laid out
in the Five-Year Plans. These programmes have established solar-
specific labs and research centres to work in concert with the Five-Year
Plan goals. Apart from research sector beneficiaries, the programmes
have focused supporting technological advancements in Chinese solar
energy industry and the leading PV manufacturing companies are
among the key beneficiaries of the programmes.
Observed / expected US & CN Falling costs: Since the beginning of 2010, the average cost of
outputs, outcomes, and solar PV panels has dropped more than 60%, and the cost of a solar
impacts electric system has dropped more than 70%.
US solar growth: 49.3 GW cumulative installed capacity in 2016.
CN solar growth: 77.4 GW cumulative installed capacity in 2016.
US jobs: The solar industry employs 260 000 persons in 2016.
CN jobs: The solar industry employs 1.96 million persons in 2016.
US Solar manufacturing: 2.8 GW production capacity, 18 000
employees.
CN Solar manufacturing: 48 GW production capacity, 1.3 million
employees.
Assessment of the main elements of mission-oriented R&I initiative1
Directionality (links to US: Yes. SunShot initiative aimed at contributing towards society
societal challenges, fuelled by cleaner energy and it aimed at supporting the US PV
industry transformation): manufacturing industry to regain its global competitive position.
CN: Yes. China’s solar energy policies have targeted initially to provide
electricity infrastructure to all country. Later on, the direction shifted to
support the Chinese solar energy manufacturing industry to become a
global leader, and the solar PV to become important clean energy
source enabling cleaner air and lower GHG emissions.
Intentionality (specific, US: Yes. SunShot has very clear and precise goals: to reduce the
well-articulated goals): levelized cost of energy (LCOE) initially by 75% before 2020 and
currently, by 50% before 2030.
CN: To certain degree. The Chinese solar energy policy has defined
many goals but they are not necessarily very clearly articulated.
Clearly set timeline and US: Yes. SunShot has clear timeline.
milestones: CN: Yes. The Chinese solar energy plans have five-year targets (as all
Chinese Five-Year Plans).
Mobilises public and US: Yes. US is among the leading global investors in renewable energy.
private investments: CN: Yes. China is the leading country in the world in respect to
renewable energy investments.
Focused on new US: To certain degree. SunShot has been claimed to be more focused
knowledge creation on applied research. Although the new era of SunShot (after achieving
(basic research, TRLs 1- the 2020 goals) is expected to provide enhanced attention to early-
4): stage research.
CN: To certain degree. The policy has been more focused on
supporting industrial development.
Focused on knowledge US: Yes.
application (applied CN: Yes.
research, TRLs 5-9):
Demand articulation US: No. SunShot is merely a R&D strategy. There are however other
(involves instruments for complementing policies giving incentives for solar energy demand.
inducing demand): CN: Yes. The demand articulation forms an integral part of the Chinese
solar energy policies.
Multi-disciplinary (inter- US & CN: To certain degree. SunShot is mainly combining expertise
disciplinary and/or trans- of various technologies (e.g. materials, manufacturing, BOS
disciplinary): components, grid connections) within the solar energy field. Similarly,
the Chinese initiative is combining various areas of expertise but mainly
technologies directly related to solar energy sector.
Joint coordination (multi- US: To certain degree. SunShot mobilises many US governmental
level and/or horizontal bodies, but is essentially DOE driven initiative.
governance of CN: To certain degree. Chinese MOST coordinates the solar energy
policies/finance): technology policy together with other policy areas.
Reflexivity (flexible policy US: Yes. SunShot’s progress is monitored closely and adjustments to
design, timely the goals are made accordingly.
monitoring): CN: Yes. The Chinese Five-Year Plan goals have been adjusted based
on the progress achieved.
1
Assessment: Yes, To certain degree, No or Not known.
4
Openness (connected to US: To certain degree. At the initial stage, SunShot initiative was
international agendas linked to the international clean energy and climate change agendas,
and networks): and it still contributes towards making solar energy more cost-
competitive.
CN: Yes. China’s solar energy policy is an integral part of the country’s
efforts to meet international clean energy and emission reduction
targets.
Involvement of citizens: US: To certain degree. Citizens’ engagement activities of SunShot
Initiative are focused on communication and informing.
CN: To certain degree. The role of the citizens in the energy transition
is well recognised but there is limited information of how this is done in
practice.
2 Context and objectives of the initiative
2.1 Contextual factors and origins of initiatives
US context prior the SunShot Initiative
The photovoltaic effect was originally observed as early as 1839 by French physicist
Alexandre Edmund Becquerel, and the discovery was a subject of scientific research
through the early twentieth century2. In 1954, Bell Labs in the US introduced the first solar
PV device that produced a useable amount of electricity aimed at providing alternative
power source for telephone systems in rural areas 3. In 1950s the Space Race led to an
increased surge of PV in NASA research to explore the use of solar PV cells in satellites4.
The oil crisis of the 1970s spurred the interest in solar technologies and the public research
efforts intensified leading to establishment of National Renewable Energy Laboratory but
very high prices compared to conventional electricity sources still prevented large-scale
applications, and PV remained as niche technology used apart from space applications in
small scale consumer electronic devices, such as calculators and watches, and other small
battery charging applications5 and as a power source in remote locations (e.g.
meteorological measurement stations).
In the 1980s, the oil prices fell to meet the energy demand again, and the federal and
interest in solar power development declined. In late 1980s the global warming and climate
change emerged to political agendas because of increased public concerns resulting from
record high temperatures across the US during the summer of 1988 6. The US Federal
Government led by Social Democrat President Bill Clinton began formulating national
policies and incentives that encouraged widespread renewable energy usage in hopes of
mitigating global climate change. In 1997, President Clinton announced the Million Solar
Roofs Initiative at a United Nations conference on global warming 7. The goal of this
initiative was to have solar technologies (includes photovoltaic and thermal technologies)
installed on one million residential rooftops by 2010. At the same time, many states (e.g.
California and Arizona) also created policies to provide incentives for solar energy
installations.
At that time, the global solar energy market had started to take-off, and the global
renewable energy investments had reached already USD 200 billion in 2010, and were
2
Solar Energy Industry Association (2017) Photovoltaic (Solar Electric). Available:
https://www.seia.org/initiatives/photovoltaic-solar-electric
3
Hoang, S. (2017) The Environmental History of Solar Photovoltaic Cells.Available:
https://repository.wellesley.edu/cgi/viewcontent.cgi?referer=https://www.google.es/&httpsredir=1&article
=1019&context=library_awards
4
Ibid.
5
SunLight Electric (2017) Photovoltaic History. Available:http://www.sunlightelectric.com/pvhistory.php
6
https://dornsife.usc.edu/assets/sites/741/docs/DChong_Explaining_Conflict_and_Consensus_on_the_Clima
te.pdf
7
Hoang, S. (2017) The Environmental History of Solar Photovoltaic Cells.Available:
https://repository.wellesley.edu/cgi/viewcontent.cgi?referer=https://www.google.es/&httpsredir=1&article
=1019&context=library_awards
5
expected to grow in upcoming decade to reach USD 3 trillion8. This development was driven
by renewable energy policies in Europe, which had started to support solar energy
installations, incentivised by public policies and generous feed-in tariffs. The domestic PV
supply e.g. in Germany was not able to meet the rapidly growing demand. The Chinese
PV manufacturing industry seized the moment and entered to the market with aggressive
pricing strategies that were supported by public policy and manufacturing subsidies9. This
led to low profit margins of US PV manufacturers, and in 2011, Solyndra Inc. and other US
PV manufacturers filed for bankruptcy10. Despite the breakthrough improvements to the PV
technology since the 1950s and more than 30 years of government support, the US share
of the global market for photovoltaic modules was just 6% in 2011, down from 43% in
199511.
In the US, this situation was seen as a global race to gain leadership in the development
of clean energy technologies. As the newly elected President Obama said in 2011: “The
countries that lead the clean energy economy will be the countries that lead the 21st
century global economy12.”
Figure 1: US solar cell and manufacturing market share and global PV module shipments 1990-2010. Source: DOE, 201713.
Context in China
In China, the public support to solar PV started in 1990s, with a focus on electrification of
rural areas in China14. The Brightness Programme starting in 1996 was an umbrella
programme, which included the Township Electrification Programme (TEP) (2003-2004),
and the Village Electrification Programme15. The TEP included an objective of 20 MW of
installed solar PV and wind energy capacity, and 200 MW of small hydro power to provide
8
The White House (2011) Playing to Win: The Global Clean Energy Race. Available:
https://obamawhitehouse.archives.gov/sites/default/files/uploads/clean_energy_report_vpotus.pdf
9
Mints, P. (2012) The Solar PV Ecosystem, A Brief History and a Look Ahead. Renewable Energy World,
November, 2012. Available: http://www.renewableenergyworld.com/articles/2012/11/the-solar-pv-
ecosystem-a-brief-history-and-a-look-ahead.html
10
Long, K. (2017) Dirty Solar? Reuters, August 2011. Available:
http://blogs.reuters.com/muniland/2011/08/31/dirty-solar/
11
Department of Energy (2011) A Competition Worth Winning. Available:
https://energy.gov/articles/competition-worth-winning
12
The White House (2011) Playing to Win: The Global Clean Energy Race. Available:
https://obamawhitehouse.archives.gov/sites/default/files/uploads/clean_energy_report_vpotus.pdf
13
Department of Energy (2011) A Competition Worth Winning. Available:
https://energy.gov/articles/competition-worth-winning
14
Gallagher, K. (2014) The Globalization of Clean Energy Technology
Lessons from China. Available: https://mitpress.mit.edu/books/globalization-clean-energy-technology
15
International energy Agency (IEA) (2013) Brightness Programme. Available:
https://www.iea.org/policiesandmeasures/pams/china/name-22668-en.php
6
electricity for more than 1000 towns and to 1.3 million people16. The central government
invested USD 240 million to provide the infrastructure, with the final aim of rural area
development and reduction of poverty 17.
The 11th Five-Year Plan (FYP, 2006-10)18 introduced a non-fossil energy target of 10% of
total energy consumption, which was almost achieved, reaching 8.6% in 2010. This
development was mainly achieved by rapidly growing wind energy and bioenergy. During
the 11th FYP period, renewable energy was set also as one of the technology priorities of
the R&D programmes. Although the Chinese PV industry depended on foreign technologies,
the Chinese government had launch programmes such as “PV industry with Chinese
characteristics”, and a strong support was provided to technology transfer and technology
cooperation from industrialised countries through purchasing manufacturing equipment,
transfer of complementary know-how, foreign direct investment by multinational firms and
the movement of skilled labour across borders19. At the same time, the China's state-
owned banks and local governments provided strong financial support for renewable
manufacturing industry, especially to emerging PV manufacturing that was considered as
among the strategic industries of the country. China's state-owned banks had given very
generous capital support to domestic PV manufacturers, and in 2010, majority of the global
solar industry investments came from Chinese government and state-owned investment
bank China Development Bank (CDB)20. Similarly, the local governments, encouraged by
the central government support, had begun offering very strong incentives for PV
manufacturing and prioritised PV industry over other manufacturing industries by offering
loans provided by local state-owned banks, tax reductions, research grants, cheap land,
energy subsidies and technological, infrastructure and personnel support 21. This created
unrestricted access to capital, although not necessarily with low cost22, and expansion
boom in the Chinese PV industry.
These government and local policies supporting investments led to a rapid development of
the Chinese PV industry, which quickly seized the global market potential of the PV, mainly
driven by generous feed-in tariffs in Europe. During the period of the 11th FYP, the solar
PV industry developed rapidly and became one of the country’s flagship industries
competing globally23. Chinese solar cell production grew rapidly, with the annual growth
rate exceeding 100% and in 2010, production of solar cells was around 10GW, accounting
for 50% of total global production. In 2010, more than 90% of the solar cell production
was however exported. At that time, the domestic PV was still in embryonic state and the
domestic installed PV capacity was less than 2% of the total global installed capacity
reaching 800 MW in 201024. The Chinese government had already however introduced
policies such subsidies for building-integrated photovoltaics and the Golden Sun
demonstration project. The PV was seen as a strategic sector for China’s social and
economic development, and promoting the solar PV industry was seen as essential to
guarantee domestic energy supply, establish a low-carbon society, and to promote
economic restructuring by fostering emerging industries.
Table 1: Drivers and barriers of the initiatives.
16
Martinot, E. (2010) Renewable power for China: Past, present, and future. Frontiers of Energy and Power
Engineering in China, September 2010. Available:
https://link.springer.com/content/pdf/10.1007%2Fs11708-010-0120-z.pdf
17
Ibid.
18
Zhang, S. et al. (2013) Interactions between renewable energy policy and renewable energy industrial
policy: A critical analysis of China's policy approach to renewable energies. Available:
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.705.7471&rep=rep1&type=pdf
19
Urban, F. et al. (2016) Solar PV and solar water heaters in China: Different pathways to low carbon energy.
Renewable Energy Reviews, October 2016. Available:
https://www.sciencedirect.com/science/article/pii/S1364032116302416
20
Zhang, S. et al. (2013) Interactions between renewable energy policy and renewable energy industrial
policy: A critical analysis of China's policy approach to renewable energies. Available:
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.705.7471&rep=rep1&type=pdf
21
Ibid.
22
NREL (2016) On the Path to the SunShot: Emerging Opportunities and Challenges in U.S. Solar
Manufacturing. Available: https://www.nrel.gov/docs/fy16osti/65788.pdf
23
12th Five-Year Plan for the Solar Photovoltaic Industry (non-official translation) Available:
http://www.americansolarmanufacturing.org/news-releases/chinas-five-year-plan-for-solar-translation.pdf
24
The Climate Group (2011) Delivering Lowcarbon Growth: A Guide to China’s 12t Five Year Plan.
7Drivers Barriers
Political US: Making the United States as US: Changing priorities of
a global leader in developing and renewable energy and climate
manufacturing clean energy change policies.
technologies. CN: Lack of public policy
CN: Decreasing air pollution and supporting domestic PV
GHG emissions. installations.
Economic US & CN: Huge global market US: Loss of competitiveness
potential of solar energy. of domestic manufacturing
CN: Chinese Government and industry.
the local governments provided CN: Low level of domestic
large incentives for PV demand for PV products,
manufacturing (free/low cost because of high prices and
loans, tax reductions, cheap low incentives.
energy, land and infrastructure). CN: Trade disputes with
CN; Growing energy demand in European countries and the
China. United States.
Societal US: Reduction in the need for CN: Low awareness and
new conventional generation acceptance of PV technology.
capacity and the use of fossil
fuels (natural gas and coal).
US: Reduction of the
environmental impacts (GHG
emissions, other pollutants,
water) of energy generation.
US: Significant reduction in the
cost of electricity.
US & CN: Potential for generating
new jobs.
CN: Air pollution.
CN: Lack of electricity
infrastructure in rural areas.
Technological US: Strong trajectory of PV US: The PV technology was
technology (material quality, cell not cost-competitive with the
and module designs, diamond conventional energy sources.
wafer sawing reducing material US: The US PV manufacturing
loss of silicon wafers). was not able to compete with
CN: Cost advantage of Chinese the low-cost manufacturers
PV cells. from China.
US: The best solar resources
are located far from regions
with high-electricity demand
setting challenges to
electricity transmission.
CN: Geographical remoteness
of PV supply and demand.
Lack of transmission network
capacity.
CN: Under-developed
standards system in China,
and problems of uneven PV
product quality.
CN: The Chinese PV industry
still lagged behind in many
technological areas (e.g.
polysilicon manufacturing and
manufacturing equipment for
PV cell manufacturing is
imported).
2.2 Strategic and operative objectives and milestones of the initiatives
Objectives of SunShot Initiative 2020 and updated objectives 2030
8The SunShot initiative has been said to be building on the legacy of President Kennedy's
1960s "moon shot" goal, which laid out a plan to regain the country's lead in the space
race and land a man on the moon25. Analogically, the SunShot was set to accelerate and
drive innovations in design, manufacturing, installation and public perception of the solar
systems. The SunShot initiative was launched by the Department of Energy on 4 th February
2011. The main objective of the initiative was to reduce the total costs of solar energy
by 75%, thus making solar energy cost competitive with other forms of energy by the end
of the decade, making solar energy available for millions of users.
The initiative was launched as a part of larger goal to derive 80% of the country's electricity
from clean energy sources, including wind, solar, nuclear, clean coal and natural gas, by
2035 announced by President Barak Obama in January 2011 26. The new commitment to
support clean energy was backed-up by increasing clean energy technology funding by a
third compared to the funding in 2010, including more than doubling investments in
energy efficiency and a more than 85% increase in renewable energy investment. A part
of these investments was earmarked to support the “$1 a Watt” initiative to make solar
energy cost competitive (later renamed as SunShot Initiative). This cost reduction was
estimated to lead a wide diffusion of solar energy systems across the country. This in turn
was expected to increase American economic competitiveness and help the United States
regain leadership in the global market for solar photovoltaics. "America is in a world race
to produce cost-effective, quality photovoltaics. The SunShot initiative will spur American
innovations to reduce the costs of solar energy and re-establish U.S. global leadership in
this growing industry,27" said Secretary Chu. "These efforts will boost our economic
competitiveness, rebuild our manufacturing industry and help reach the President's goal of
doubling our clean energy in the next 25 years.28"
To ensure these additional investments, the President Obama called for ending the
approximately USD 4 billion annual tax subsidies provided to oil, gas and other fossil fuel
producers: “This is our generation’s Sputnik moment…We’ll invest in clean energy
technology – an investment that will strengthen our security, protect our planet, and
create countless new jobs for our people.”
In February 2011, the U.S. Energy Secretary Steven Chu announced additional details of
the Department of Energy's "SunShot" initiative. The goal was specified in the following
manner:
75% reduction of the total costs of photovoltaic solar energy systems to achieve the
cost competitiveness at large scale with other forms of energy without subsidies before
the end of the decade29.
To achieve these goals, DOE was set to work closely with partners in government, industry,
research laboratories, and academic institutions across the country. The cost targets for
solar energy were set with the following details30:
USD 0.10 per kilowatt hour for residential solar;
USD 0.08 per kilowatt hour for commercial solar;
USD 0.06 per kilowatt hour for utility-scale solar.
25
https://energy.gov/eere/solar/articles/doe-pursues-sunshot-initiative-achieve-cost-competitive-solar-energy-
2020
26
The White House (2011) Fact Sheet: The State of the Union: President Obama's Plan to Win the Future.
Available: https://obamawhitehouse.archives.gov/the-press-office/2011/01/25/fact-sheet-state-union-
president-obamas-plan-win-future
27
https://energy.gov/eere/solar/articles/doe-pursues-sunshot-initiative-achieve-cost-competitive-solar-energy-
2020
28
Ibid.
29
https://energy.gov/eere/solar/articles/doe-pursues-sunshot-initiative-achieve-cost-competitive-solar-energy-
2020
30
https://energy.gov/eere/solar/goals-solar-energy-technologies-office. Please note : The 2020 residential and
commercial targets were adjusted for inflation (to 2017 dollars), however the 2020 utility-scale target was
not adjusted for inflation as wholesale electricity prices have been relatively flat from 2010-2017.
9Due to the rapid progress of the solar industry and having achieved majority of the initial
targets of the SunShot, the SETO has set new cost targets in 2017 for the upcoming
decade, which support greater energy affordability by cutting the cost of solar electricity
an additional 50% between 2020 and 2030. The SunShot 2030 targets for PV technology
are:
USD 0.05 per kilowatt hour for residential PV;
USD 0.04 per kilowatt hour for commercial PV;
USD 0.03 per kilowatt hour for utility-scale PV.
Figure 2: SunShot goals 2020 and 2030 and progress made. Source: DOE, 2017 31.
The Solar Energy Technologies Office also set 2030 targets for concentrating solar power
(CSP) to enable the technology to be competitive. Combining CSP with thermal energy
storage directly addresses grid integration challenges related to the variability of solar
energy and allows solar-generated heat to be stored until electricity is needed, even well
after the sun sets.
The target for CSP peaker plants, which have no more than six hours of energy storage,
is USD 0.10 per kilowatt-hour.
The target for CSP baseload plants, which have a minimum of 12 hours of energy
storage, is USD 0.05 per kilowatt-hour.
31
Department of Energy (2017) Goals of the Solar Energy Technologies Office. Available:
https://energy.gov/eere/solar/goals-solar-energy-technologies-office
10Figure 3: SunShot CSP goals 2020 and 2030 and progress made. Source: DOE, 2017 32.
In addition to the above described cost targets, SETO is working to address the challenges
related to reliably and securely integrating high penetrations of solar electricity into the
grid, including studying the integration of solar with energy storage, load control and other
distributed energy resources. Advances in these technologies combined with the PV and
CSP cost reduction targets is expected to enable “economically competitive solar to be
widely deployed across the country while contributing to the reliability and resilience of the
electricity grid33”. The activities of SunShot Initiative include34:
Shorten the time between discovery of new solar photovoltaic and concentrating solar
power technologies and their commercialisation.
Maintain U.S. leadership in solar technology innovation by improving efficiency and
reliability, and reducing production costs.
Reduce installation and other soft costs, and open new markets for solar energy.
Foster collaboration for utility-scale solutions and clear the way for high-penetration
solar.
Strengthen the U.S. supply chain for solar manufacturing and commercialisation of
cutting-edge solar technologies.
Invest in education, policy analysis, and technical assistance to remove critical barriers.
Develop a well-trained workforce to foster US job creation in the solar industry.
Objectives of the Chinese 12th and 13th Five-Year Plans for solar energy
China's 12th Five-Year Plan (2011–2015) set a dedicated plan for solar energy. The aim of
the plan was to reduce the price of solar power and to increase the manufacturing
32
Department of Energy (2017) Goals of the Solar Energy Technologies Office. Available:
https://energy.gov/eere/solar/goals-solar-energy-technologies-office
33
Ibid.
34
Department of Energy (2014) The SunShot Initiative: Making Solar Energy Affordable for All Americans.
Available: https://www.nrel.gov/docs/fy14osti/60491.pdf
11of PV systems35. Other objectives were to increase R&D for key technologies,
developing new, advanced technology and manufacturing processes for PV, promoting
favourable policies for the domestic market and improving PV standards, product quality
inspection and certification systems. The plan highlights solar energy as one of seven
strategic emerging industries subject to specific government support, preferential
treatment, public planning and tight top-down control of the industry. The guiding
principles of the Chinese 12th FYP in PV sector was to implement and apply scientific
findings in industrial applications, and to seize the global opportunities created by the
transition of the energy systems and strengthening the Chinese PV industry
competitiveness. The plan also aimed at reducing the costs of PV power generation and
quality improvements of the PV products and production technologies. The plan set
economic, technology, innovation and cost targets for PV sector.
Table 2: Goals of the 12th Solar Energy Development Five-Year Plan (2011-2016). Source: 12th FYP for Solar Energy.
Development goals Description
Economic goals The 12th FYP period was targeted to maintain the growth of the PV
industry. The goal of the manufacturing industry along the PV value chain
was to meet the domestic demand and excel the global PV market. The
plan was providing support to major Chinese enterprises to grow and by
2015:
The leading polysilicon enterprises were set to reach the goal of 50
000 metric tonnes annual production;
The leading solar cell enterprises had the goal to reach the annual
capacity of 5 GW;
Having one PV enterprise with annual sales revenue exceeding RMB
100 billion, 3-5 PV enterprises with annual sales revenue exceeding
RMB 50 billion, and 3-4 enterprises specialising in PV equipment
manufacturing with annual sales revenue exceeding RMB 1 billion.
The plan set ambitious goals for improving the quality of the PV
Technology goals manufacturing technologies and products. By 2015:
The recovery rate of silicon tetrachloride, hydrogen chloride, and
hydrogen was set to be less than 98.5%, 99%, and 99%, respectively;
The average total power consumption level lower than 120 kWh/kg;
The conversion efficiency goals for monocrystal silicon cells was 21%,
for polysilicon cells 19%, and for amorphous silicon thin-film cells
12%;
New types of thin-film solar cells will be industrialised;
The domestic manufacturing rate of production equipment and
auxiliary materials for PV cells will reach 80%, and Chinese enterprises
will master key technologies involved in PV grid connection,
manufacturing of energy storage equipment, and system integration.
By 2015, the Chinese PV companies will have significantly enhanced
Innovation goals innovation capabilities and a number of flagship enterprises with
advanced core technologies will emerge, mastering all the key technology
and production methods in the PV industry. The standards system will
gradually improve. Chinese PV enterprises’ international influence will be
greatly enhanced. National key laboratories and inspection platforms will
be established by fully utilising the existing foundation.
By 2015, PV power generation will have a certain degree of economic
Targets for the Cost of competitiveness as the cost of PV modules will drop to 7000 RMB/kW,
PV Power Generation that of PV systems will drop to 13 000 RMB/kW, and that of PV power
generation will drop to 0.8 RMB/kW. By 2020, PV power generation will
become economically competitive as the cost of PV modules will fall to 5
000 yuan/kW, that of PV systems to 10 000 RMB/kW, and that of power
generation costs to 0.6 RMB/kW.
The current 13th Five-Year Plan (2016-2020) continues the support to solar energy
focusing on promoting the industrial application of next generation photovoltaics, and
coordination, acceleration and optimisation of the domestic renewable energy market and
35
Urban, F., Geall, S. and Wang, Y. (2016) Solar PV and solar water heaters in China: Different pathways
to low carbon energy. Renewable and Sustainable Energy Reviews 64 (2016) 531–542.
12power transmission36. The 13th Five-Year Plan for Energy lowered the 2020 PV installed
capacity target from initially set 150 GW to 105 GW.
37
Table 3: Targets of the 13th Solar Energy Development Five-Year Plan (2016-2020). Source: IEA, 2017 .
Solar energy Target by 2020 Targeted costs reductions
technology
Solar PV At least 105 GW By 50% by 2020 in comparison to
2015 costs.
CSP 5 GW Reduction of feed-in tariffs (FITs) for
CSP to RMB 0.8yuan/kWh.
Solar thermal 800 million square meters of
installations
3 Resources and management
3.1 Governance and management model
SunShot Initiative coordination
The Office of Energy Efficiency and Renewable Energy (EERE) in the US Department
of Energy (DOE) is the central organisation focused on research and development of
renewable energy, energy efficiency, and sustainable transportation technologies. EERE’s
vision is “a strong and prosperous America that is powered by clean, affordable, and secure
energy”38. The mission of the EERE is to create and sustain American leadership in the
transition to a global clean energy economy. EERE acts as a node between the national
energy, economic, and environmental systems, and across industry and other stakeholder
organisations. EERE’s activities cover a range of renewable power technologies including
solar, wind, geothermal and water. Within EERE, the Solar Energy Technologies Office
(SETO) is the primary office that funds innovations in solar power and initiated the
SunShot Initiative39. SETO focuses on achieving the goals of the SunShot Initiative and
since the SunShot Initiative was announced in February 2011, the Solar Program has
funded more approximately 300 projects in the following areas: Photovoltaics (PV),
Concentrating solar power (CSP), Balance of systems costs (soft costs), and Systems
integration.
In addition to running the funding programmes, SETO works towards addressing non-
technical barriers preventing solar energy market uptake such as: updating codes and
standards, improving interconnection agreements among utilities and consumers, and
analysing utility value capacity credits for utilities40. The work of SETO is targeted to
support consumers, businesses, and utilities make more informed decisions when
considering renewable energy, and also facilitate the purchase of solar energy.
36
The 13th Five-Year Plan for Economic and Social Development of the People’s Republic of China (2016–
2020). Available: http://en.ndrc.gov.cn/newsrelease/201612/P020161207645765233498.pdf
37
International Energy Agency (2016) China 13th Solar Energy Development Five Year Plan (2016-2020).
IEA/IRENA Joint policies and measures database. Available:
https://www.iea.org/policiesandmeasures/pams/china/
38
Department of Energy (DOE) (2017) About the Office of Energy Efficiency and Renewable Energy. Available:
https://energy.gov/eere/about-office-energy-efficiency-and-renewable-energy
39
Department of Energy (DOE) (2017) About the Solar Energy Technologies Office. Available:
https://energy.gov/eere/solar/about-solar-energy-technologies-office
40
Department of Energy (DOE) (2017) The SunShot Initiative. Available:
https://energy.gov/eere/solar/sunshot-initiative
13Figure 4: Coordination of SunShot Initiative. Source: DOE, 2017.
Coordination of solar energy R&D in China
The Chinese Ministry of Science and Technology is the main responsible of the solar
R&D in the country, and sets a national vision for R&D, and designs and implements the
policies and strategies to achieve the targets set41. The MOST is responsible of the process
of drafting the Five-Year Plans for individual technology areas, one of which is solar, and it
coordinates the financing and administrative tasks of the plans together with other
governmental organisations.
Figure 5: Governance of Chinese Solar Energy Research. Source: Ball et al., 2017.
3.2 Financing model
41
Ball, J. et al. (2017) The New Solar System China’s Evolving Solar Industry and Its Implications for
Competitive Solar Power in the United States and the World. A Joint Initiative of Stanford Law School and
Stanford Graduate School of Business, March 2017.
14DOE has spent approximately USD 2.3 billion on R&D to advance solar technologies42, and
during the first six years of SunShot Initiative (2011-2016) total budget of EERA’s SETO
programme on solar energy research has been USD 1.6 billion (EUR 1.3 billion) and
close to 300 projects have been financed.
Table 4: Solar energy technology budget allocation. Source: Department of Energy, 2017.
Fiscal Year 2011 2012 2013 2014 2015 2016 2017
Annual enacted budget 259.6 289.0 269.1 257.1 233.0 241.6 285.1*
(USD million)
*Requested budget.
In 2016, the annual funding provided by SETO accounted for approximately 50% of
all public RD&D for PV technology development in the US43. In addition to the SETO,
the Department of Energy’s Office of Science and the Advanced Research Projects Agency-
Energy (ARPA-E), the National Science Foundation, the Department of Defense, the
National Aeronautics and Space Administration (NASA), and states such as California, New
York, Florida, and Hawaii also fund solar R&D.
Although SETO has announced the new 2030 targets for the SunShot Initiative in
September 2017, its future is somewhat uncertain in terms of continuity of funding solar
research at its current pace. The Office of Energy Efficiency and Renewable Energy, which
includes activities of SETO and SunShot Initiative, is subject to face a 70% or USD 1.4
billion budget cut, and the ARPA-E, a key actor in bringing cutting-edge energy and grid
technologies to market, would be cut completely44.
The Chinese National Development and Reform Commission (NDRC), the main
economic coordinator of the country and its Five-Year Plans has said that the solar power
will receive altogether 1 trillion yuan (USD 150 billion) of spending in the 2016 to 2020
period45. No further details of the spending allocation are disclosed or available (e.g. how
much of this budget is dedicated to R&D).
3.3 Key actors involved in the initiative
About 40% of the SunShot funding is allocated to national laboratories. The primary
laboratory for renewable energy is the National Renewable Energy Laboratory in Golden,
and other important laboratories include: Sandia National Lab, Lawrence Berkeley Lab,
Pacific Northwest Lab, Argonne Lab, and Oak Ridge Lab 46.
The National Center for Photovoltaics (NCPV) at the National Renewable Energy
Laboratory (NREL) is the largest recipient of PV research funding from SunShot. The NCPV
focuses on technology innovations that drive industry growth in US PV manufacturing, and
it is a central resource in PV research, development, deployment, and outreach.47
The Chinese government, through its main research-and-development arm, the
Ministry of Science and Technology (MOST), uses multiple programmes to implement
the development goals laid out in the Five-Year Plans48. These programmes have
established solar-specific labs and research centres to work aligned with the Five-Year Plan
goals. Apart from research sector beneficiaries, the programmes have focused supporting
42
Department of Energy (216) SunShot Fact Sheet 2016. Available:
https://energy.gov/sites/prod/files/2016/06/f32/SunShot-factsheet-6-10_final-508.pdf
43
International Energy Agency (IEA) (2017) National Survey Report of PV Power Applications in the United
States 2016.
44
Greentech Media (2017) DOE’s SunShot Awards $46M for Solar Tech-to-Market Research. Available:
https://www.greentechmedia.com/articles/read/doe-sunshot-46-million-grants-solar-technology-market-
research#gs.ZoM5iwI
45
Reuters (2017) China to plow $361 billion into renewable fuel by 2020. Available:
https://www.reuters.com/article/us-china-energy-renewables/china-to-plow-361-billion-into-renewable-
fuel-by-2020-idUSKBN14P06P
46
Panjwani, L. (2017) Department of Energy ‘Sunshot’ Aims to Accelerate Solar R&D. R&D Magazine, July 2017.
Available: https://www.rdmag.com/article/2017/07/department-energy-sunshot-aims-accelerate-solar-r-d
47
https://energy.gov/sites/prod/files/2016/02/f29/PV%20Fact%20Sheet-508web.pdf
48
Ball, J. et al. (2017) The New Solar System China’s Evolving Solar Industry and Its Implications for
Competitive Solar Power in the United States and the World. A Joint Initiative of Stanford Law School and
Stanford Graduate School of Business, March 2017.
15technological advancements in Chinese solar energy industry and the leading PV
manufacturing companies are among the key beneficiaries of the programmes.
3.4 Monitoring system and evaluation of the initiative
The cost targets set by the SunShot are measured in “levelised cost of energy” (LCOE),
which determines the cost for electricity produced by solar energy systems 49.
Furthermore, it is specified that: “LCOE is based upon the sum of the upfront installation
price and the present value of the lifetime operational expenses (in USD) divided by the
net present value of the power produced (kilowatt hours or kWh). The assumptions that
underlie the 2010 and 2016 LCOE estimates for PV, and the associated SunShot targets,
are based upon systems installed in an average solar resource location for the United
States (as represented by Kansas City, Missouri), and do not include the federal investment
tax credit (ITC) or state or local incentives. The model results shown are in terms of 2016
cents per kWh.”50
The background work on the LCOE benchmarks and targets are based on models
developed by the National Renewable Energy Laboratory (NREL), and the annual
installation price are published in NREL's yearly “U.S. Solar Photovoltaic System Cost
Benchmark51” reports. Further details and the models specifying the LCOE calculations are
published in the peer-reviewed journal “Progress in Photovoltaics”, and as part of the “On
the Path to SunShot” publications52.
SETO launched the “On the Path to SunShot” technical report series in early 2015 in
collaboration with the National Renewable Energy Laboratory (NREL) and with
contributions from Lawrence Berkeley National Laboratory (LBNL), Sandia National
Laboratories (SNL), and Argonne National Laboratory (ANL). Eight reports have been
published to analyse the progress made so far, and the key aspects that must be addressed
to achieve the SunShot Initiative’s goals. These reports focus on the areas of grid
integration, technology improvements, finance and policy evolution, and environmental
impacts and benefits.53
In addition, the DOE supports critical data gathering and analysis to track solar market
development, benchmark key non-hardware system costs (such as permitting,
interconnection, and inspection), and provide independent insight on emerging issues 54.
DOE publishes timely analyses on solar economics, installation trends, labour market
trends, and innovative financing approaches, among other topics.
NREL also contributes towards SunShot goals by systematically analysing the technology
progress of PV cell efficiency. Since January 1993, “Progress in Photovoltaics” has
published a listing twice a year of the highest confirmed efficiencies for a range of
photovoltaic cell and module technologies 55. The tables are commonly agreed,
standardised benchmark of the current state-of-the-art of the PV technology used as a
reference study at the global-scale.
49
Department of Energy (2017) Goals of the Solar Energy Technologies Office. Available:
https://energy.gov/eere/solar/goals-solar-energy-technologies-office
50
Department of Energy (2017) How We Measure. Available: https://energy.gov/eere/solar/goals-solar-energy-
technologies-office
51
The latest report is available: https://www.nrel.gov/docs/fy17osti/68925.pdf
52
Ibid.
53
Department of Energy, Solar Energy Technologies Office (2017) On the Path to SunShot. Available:
https://energy.gov/eere/solar/path-sunshot
54
Department of Energy (2017) Market Transformation. Available:
https://www.nrel.gov/docs/fy12osti/52479.pdf
55
Green, M. et al (2017) Solar cell efficiency tables (Version 50). Progress in Photovoltaics, June 2017.
Available: http://onlinelibrary.wiley.com/doi/10.1002/pip.2909/abstract,
16Figure 6: Best research-cell efficiencies. Source: NREL, 2017 56
3.5 Level and type of citizen engagement in the initiative
SunShot Initiative is a top-down set research and technology development strategy that
does not directly involve citizens. Citizens are however informed about the advances of
SunShot, the different funding opportunities are transparently available through the
SunShot website and anyone can subscribe to receive a weekly newsletter.57 In addition,
updates of the state of solar energy technology presentations conducted by the National
Renewable Energy Laboratory (NREL) are made available four times per year on the
website of the SunShot initiative58. SETO also holds workshops, which provide feedback on
the SunShot initiative and help the Department of Energy to identify challenges and
opportunities related to the Sun Shot programme. For example, during the 2016 SunShot
Strategy Forum was organised.
There is not much information available about how citizens are involved in Chinese Solar
Energy policies. It seems however that the citizens are in favour of clean energy policies
and see them as a solution for air and water pollution problems affecting China59. According
to a survey of 3000 residents of Chinese cities, up to 96% of the respondents think that
green energy would provide a solution to the air pollution. “Compared with those overseas,
Chinese consumers show stronger willingness to purchase green power, and are ready to
pay considerably higher fees for it. However, there are currently no options for consumers
in China to select their source of supply.60” Others claim that small-scale solar installations,
such as residential solar water heaters, have been less noticed contributors to Chinese
energy sector transformation61. Citizen-driven solar energy installations have gain
popularity especially in rural areas of China, and it has been estimated that they were used
by over 30 million households in 201462.
4 Policy instruments and wider policy-mix used for implementing the initiative
56
Margolis, R. et al. (2017) Q4 2016/Q1 2017 Solar Industry Update. NREL/PR-6A20-68425, April, 2017.
Available: https://www.nrel.gov/docs/fy17osti/68425.pdf
57
Department of Energy (2017) Newsletters. Available: https://energy.gov/eere/solar/solar-newsletters
58
Department of Energy (2017) Quarterly Solar Industry Update. Available:
https://energy.gov/eere/solar/quarterly-solar-industry-update
59
Energy Transition (2017) China’s citizens overwhelmingly want renewable energy. February 2017. Available:
https://energytransition.org/2017/02/chinas-citizens-overwhelmingly-want-renewable-energy/
60
Ibid.
61
Urban, F. (2014) Small-scale solar is a big player in China’s clean energy mix. Available:
https://www.chinadialogue.net/article/show/single/en/7580-Small-scale-solar-is-a-big-player-in-China-s-
clean-energy-mix
62
Ibid.
174.1 Description of the R&I policy instruments used for implementing of the initiative
SunShot R&I policy instruments
The SunShot Initiative issues competitive funding calls that provides funding for
selected research projects aimed at transforming the ways the solar energy is generated,
stored, and utilised, having the overall target to make solar power more affordable and
accessible.63
The research, development, and demonstration activities fall into five broad categories
(presented in the table below) forming a sub-programme. Each of the sub-programmes
issues funding opportunity announcements (FOAs) developed through a collaborative
process but always targeted to achieve the goals of the SunShot. Adhering to an open,
highly competitive solicitation process, these funding opportunities encourage collaborative
partnerships among industry, universities, national laboratories, federal, state, and local
governments, and non-government organisations.64 The received FOA applications are
subject to a rigorous peer-review based selection process through which the projects are
selected for negotiation to receive DOE funding. After the successful completion of a
negotiation process, including collaboration on a statement of project objectives,
milestones, and budgets, the projects are started. 65 Since the launch of SunShot, close to
300 projects have been funded and currently there are 253 ongoing projects. The list of
projects is available at the SunShot webpage including an interactive map visualising the
locations at which the research activities are conducted66.
Table 5: SunShot sub-programmes. Source: DOE, 2017.
Sub-programme Description
Photovoltaic (PV) Research The sub-programme supports the research and development of PV
and Development technologies to improve efficiency, durability, and reliability, as well
as lower material and process costs to reduce the levelized cost of
solar generated electricity. The PV portfolio includes research
directed toward reaching a levelized cost of energy of USD 0.03 per
kilowatt-hour. The photovoltaics sub-programme is targeted to
industry, academia, national laboratories, and other government
agencies to advance solar PV technology. The sub-programme
includes activities from early-stage solar cell research to technology
commercialisation, including work on materials, processes, and
device structure and characterisation methods. DOE issues
competitive solicitations, or funding calls, to provide funding to
research projects addressing the entire PV technology pipeline to
advance towards the SunShot Initiative targets.
Concentrating Solar Power The sub-programme supports research and development of CSP
(CSP) technologies that reduce the cost of solar energy with systems that
can supply solar power on demand, even when there is no sunlight,
using thermal storage. The projects funded demonstrate new
concepts in the collector, receiver, thermal storage, heat transfer
fluids, and power cycle subsystems, as well as technologies that will
lower operations and management costs. The CSP sub-programme
is most interested in transformative concepts with the potential to
break through existing performance barriers, such as efficiency and
temperature limitations.
Systems Integration The systems integration sub-programme works to enable the
widespread deployment of safe, reliable, and cost effective solar
energy on the nation’s electricity grid by addressing the associated
technical challenges and regulatory requirements. The systems
integration team focuses on the research and development of cost
effective technologies and solutions that enable the sustainable and
63
Department of Energy (2017) Goals of the Solar Energy Technologies Office. Available:
https://energy.gov/eere/solar/goals-solar-energy-technologies-office
64
Ibid.
65
https://energy.gov/eere/solar/about-solar-energy-technologies-office
66
https://energy.gov/eere/solar/solar-projects-map
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