Solar power enhancements may help industry shine to new heights - Scott Graybeal

Paul Yeager   Hi everybody, I'm Paul Yeager This is the MToM Show podcast, a production of Iowa PBS and the Market to Market TV show, we're going to get into the sun, we're going to stare directly at the sun and talk solar technology, not necessarily the expansion of but the improvement of what's there, and also some expansion and where some areas could happen. We're gonna find out that solar technology is actually being manufactured in the United States, and not nearly as much as it was overseas, that's coming into this country. So we're gonna find out about domestic made product and domestic technology. Yes, we'll talk about the the leader in the world right now. And that's China. But what has changed in their industry and also other countries that are looking at technology and improvements in the solar industry and the expansion of we're gonna get help today from Scott Graybeal. He is the CEO of Caelux. It's a California based company. He joins us from where their production is happening basically, outside his window. We're going to talk about what's in the sky. What's on that product, we're going to get very detailed, very techie. I admit science isn't necessarily my first love. But I certainly loved getting to learn more about the technology and I hope you will as well in this installment of the MToM Show podcast. When I saw that you're in or you used to be in Pasadena, everybody always thinks Rose Bowl, but it is such a beautiful part of the Los Angeles area, right? Oh, it is indeed. Yes. Is but but you don't really see. There's like a sliver, right, that doesn't even see the ocean?

Scott Graybeal   Yeah, there is a Well, you're right. I mean, there is a location o Ocean Avenue where you can get up and you can actually see all the way to the Pacific, which is beautiful. But within the Pasadena has done very well. There's a lot of green space. And a couple that with this sort of, I would say a less intense urban environment just makes it a really special location. But a lot of folks don't really understand that coupled with the Rose Bowl, and all these cool sort of cultural things that we have are also fantastic institutions like Caltech, where a lot of innovation comes from. And that was really the kind of the beginning of the story for our company as well.

Paul Yeager   So are you in Are you California kid?

Scott Graybeal   I am I grew up in Van Nuys, which in the San Fernando Valley, spent some time in the Navy, though that took me to Florida and South Carolina and Connecticut, and then Washington state. And then we came back to California in about 2000.

Paul Yeager   So tell me how you got into your company.

Speaker 2   So I joined Caelux two and a half years ago as the CEO to help the company scale, they had some fantastic ideas around what they wanted to do with the product. And I came in to be the person to help them take it from that lab to what we call lab to fab to where we're actually manufacturing. And in that process, we've had to raise a substantial amount of equity capital with some fantastic investors that is helping us launch this product, which we believe is really going to transform the solar industry. I've been involved in solar for about 16 years, started at the probably the crest of that solar 2.0 revolution, where we saw the emergence of a crystalline silicon technology predominantly out of China really take over. And that's what we were working within that framework today. And what we refer to as PV 3.0 is now the emergence of new technologies that are enhancing efficiency and power production even further building off of that foundation. And another interesting thing is that this is also coupled with a resurgence in US solar manufacturing part and parcel to the IRA that was recently passed. I mean, that's really been the fuel that the industry has needed to really help accelerate the deployment and manufacturing, most importantly, of solar products here in the United States.

Paul Yeager   You mentioned the IRA, how without that money from the federal government would solar be in like 2.5 and not hit the 3.0 that you refer to? I think for

Scott Graybeal   the US in particular, what Ira has done is enabled the US manufacturing to take root once again, we still would have some advanced technologies, but they wouldn't be manufactured here in the United States. So we would still be leveraging a largely Asia-based supply chain to support the needs for solar. The exciting thing now is now we have US manufacturing jobs that will be here for a very long time to go and build manufacture build products that we will be using domestically.

Paul Yeager   Well, the IRA came out of COVID. And in the pandemic, when we all realize we didn't make as much in the US as we used to. So I guess the IRA on its own path if it would have passed without the pandemic, do you think it would be as quick to be building in this country like we are now.

Scott Graybeal   You bring up a good point. I think there definitely is some connective tissue between the pandemic and realizing that our supply chains were very fragile and not as functional as we thought they were and the Launch of IRA which has touched a number of industries and not just solar. But without it, we wouldn't be having this level of acceleration. There were announcements about a handful of companies expanding very modestly. And since then, we've seen a tremendous uptick in the number of companies that have talked about expanding operations. I can tell you, for our company, in particular, we did not have a plan to expand in the United States, it was really going to be in Asia. And since then, we've now are working closely with our partners on expansion plans in the United States at a scale that we wouldn't have thought possible otherwise.

Paul Yeager   Are there areas in particular that you're targeting for? I'm guessing this is production that your meeting is going to expand?

Scott Graybeal   That's correct. We have a production facility. we're ramping right now in Baldwin Park outside of Pasadena, that is currently underway, and will have that line integrated by the end of this year in production by early next year. On top of that, though, we'll have probably modest expansion here in the Los Angeles metro area. The next locations we're looking at are in the Midwest, and then the American southeast.

Paul Yeager   Is that geographical by strategy where you see expansion of demand for the product in both the Midwest and southeast?

Scott Graybeal   It is it's also tied to the fact that our customers are also in those geographies and are doing quite well. Some of the largest expansions that we've seen announced have been occurring in the Midwest and in the southeast.

Paul Yeager   You mentioned you've been in the industry 16 years. Go back 16 years to now. I would imagine it's more than a tripling quadrupling. I mean, just the tech, what's been the biggest change in that 16 years?

Scott Graybeal   Well, there's been a couple and I think that one that has been more on the fiscal side, when we saw the incentives finally come into play in the US to support the deployment of solar at scale. And that was really manifests in something called the investment tax credit, which has been reinforced through this Ira legislation. And the second was the transition of the technology overseas. Solar, as many people will say, it was really boring here in the United States, and we have seen it and move offshore. And I've worked with companies that helped accelerate that transition. And it's fun to see now that we're looking at this next era of solar, where we're talking about building factories again, in the United States. What we also saw was the cost dropped precipitously, and this when when I first started, we used to talk about $2.50 a watt for a photovoltaic module. And in some geographies in the world, you can purchase a PV module for 20 cents a watt. So that cost drop is significant solar is now one of the cheapest forms of electricity available, solar and wind oftentimes, will trade off, excuse me, depending upon the location. But it's amazing to see that drop, we used to talk about grid parity, when is solar going to be at the price of electricity at which you will intersect the price for the grid. And we exceeded that a few years ago. So when even talk about grid parity anymore, we don't really talk about levelized cost of energy anymore, it's assumed that we were already delivered very low cost energy. And what we're doing now is dropping that cost even further as an industry. We can talk about electrification in developed countries like the US. And there's also electrification opportunities in underdeveloped countries where that price point needs to be even lower. But everybody benefits from cheaper electricity, industry, consumers, you name it. And so that's really what the focus for us is, is more powerful, lower cost solar.

Paul Yeager   Well, cost is one thing demand creating a demand for the product. Where do you think the demand side played into this and grew in this timeframe?

Scott Graybeal   Well, demand was driven a lot by creating the proper framework, you have to create an incentive when you're introducing a new technology. And since then, we've seen that acceleration take root, we see demand across a broad swath of applications. 45% of all solar installations today are what we would call a distributed generation, which includes homes includes relatively small solar power projects all the way through massive solar power projects that are now you know, some are over a gigawatt in production today, which is a lot I mean, that's a quarter million homes and the supply just from these, these sites. So that is going to continue to evolve. There is going to be a think more interest though in proper land use and management. And so with folks that we talk about, talk more about, hey, I only have this much real estate to work with for a project, how do I optimize the productive capacity? And there's a number of ways to go do that. And we're one of those solutions that supports improving the amount of energy you can get out of every acre of solar that you deploy.

Paul Yeager   I had a discussion on this podcast a couple of months ago and we were talking about like the land behind me this Prime corn and soybean fields in one of the ice states it is, there are people in these states who they don't want to see wind, but they've already seen it. And they're like you're not taking my field and I know of one, a pretty big one not too far from here, that has come to an area that looks like pretty good corn or soybean land, you're talking about strips of land that aren't massive fields is that where you see the biggest growth?

Scott Graybeal   I think you're gonna see both. That's what them all the industry forecasts point to is roughly half were going to be large power projects and, and a little under half are going to be the smaller power projects. And that's going to extend globally. And you know, I think we have to be sensitive and smart about where solar really performed the best, and build projects in those locations. And generally, when you're looking at, let's say areas that have great sunlight, great natural resource availability, that's important. We also have to balance that with other needs. I mean, clearly AG is a major need for everybody, we have to ensure that we have viable farmland, so it shouldn't be an either, or it should definitely be a boat. But that's also going to require us to think about transmission infrastructure. So if we have solar, let's say in North Texas, why don't we have transmission infrastructure so that farmers in Iowa can benefit from that resource. And that's going to take an investment, it's gonna take a lot of streamlining of current regulation. And this has the attention of Congress, they are working on these topics to ensure that we can have this kind of interconnection that makes sense for everybody. So I'm an advocate, personally, speaking of putting these resources where they make the most sense, and let's get the electricity to the people that need it the best.

Paul Yeager   There's also that issue with electricity, the farther you transmit it down the lines, the you lose some of your efficiencies. So does solar make sense? Where it's sunniest, does wind make the most sense where it's windiest? I mean, are we going to get to a regionalization of this?

Scott Graybeal   You could. And I think there's also technologies that are available that a number of other investors have looked at, where we're using superconducting technologies to support the transmission of these distributed resources to the point of views. And I'd love to see more, that's basically I think the entire industry benefits from it, we should put resources where the best optimized when and to your point, you know, there is a trade off when you're looking at the length of this transmission. But if you go to their other countries that have invested in long distance transmission, high voltage, DC, that are quite effective in supporting the transmission over very long distances without the kinds of losses that we see in a network, typical AC distribution and transmission framework. So that only really kind of addresses part of it doesn't have to be on top of the point of views. Sometimes that may make perfect sense. But every case should be analyzed, I think on its own merits. And we can't ignore the fact that as a country, we need to update our antiquated transmission and distribution network. And we also have to be able to deploy technologies that are not well to say at land hogs that consume as much land as they normally would. And technologies like what calyx is doing with a 30% improvement in energy harvest, our exhibit pointing exactly at that problem? How do we get better use of land? And if we can do it with by using less land for a given requirement, then that's good for everybody.

Paul Yeager   I promise you, I'm going to get it to the technology in a minute. But you just said something that's out your back shoulder. That's a that's a big power line structure right behind you. Do you think there'll be a stomach for these lines that you're referring to are these super? Because transmission lines end up being their own Pandora's box that people don't want to see them on their property, either let alone a windmill or a solar panel farm? I mean, do you anticipate that there's going to be a little issue there that you're going to have to maybe put your nose in? 

Speaker 2   Well, not for me personally, but others will have to certainly, I think to go and deal with this. And just case in point. This transmission line that we're looking at here is actually the Los Angeles Department of Water and Power Transmission Line. And we're in the Southern California Edison service area. And so this power transmission line actually connects out to wind farms that are further east and where we are today. And so today, Los Angeles is taking energy from wind farms all over the state in order to support its requirements. And the same is true with solar. So the transmission infrastructure is a requirement for us to really have a state of the art electric grid. wasn't too long ago, I read a great piece was a study that was done, I want to say somewhere in the West Coast, a university that was talking about the fact that the US has the worst performing electric grid of all OECD countries. And that's a tragedy. And I think one of the takeaways for me was, if Alexander Graham Bell could look at our telecommunications infrastructure, he wouldn't understand it, but Thomas Edison can come and look at ours and compete and walk into a penny power plant today and know exactly what's going on. So we haven't had that step up into innovation in the electric grid to the extent We need to. And this is part of a broader ecosystem. If we want renewables to really be part of our energy package, and we do, I think the across the country, you'll see, I think pretty broad buy in, for one reason or another may not be the same motivations politically or economically. But clearly there is a push towards increase use of renewables and energy storage technologies. And part and parcel to this is making sure we've got a strong transmission and distribution infrastructure.

Paul Yeager   Well, I'll go back to what the state we talked about just a moment ago, Texas, I mean, that that winter storm highlighted a number of challenges that state has, but let's face it, the rest of the country is probably not that far behind or that close to danger. I don't know if that's the right word. Texas has its own story, of course, but okay, not us specifically getting involved in those things, but doesn't your industry as well as wind and other renewables that need to use this infrastructure, at some point, you are going to have to kind of get into,

Scott Graybeal   we do and I think the direction that we push is really to be supportive of activities that really modernize the infrastructure that's needed. And to your point, you know, Texas is an interesting case, because it is a large electric perimeter is its own electric grid. It's not tied into the rest of the country. And so they, by virtue of that, and I'm sure somebody who's more of a transmission distribution expert than I would would probably find some argument with me here. But that calls the question resiliency, if you can't tap into sources that are able to offset what your requirements are, then that's probably an issue. So but they have their reasons for doing what they do. But it does highlight, I think the weaknesses inherent in the overall system that need to be addressed, we need more powerful solar, we need better wind turbines, we need to have better energy storage solutions. We do all these things working in concert together, along with the state of the art transmission and distribution framework to ensure that we can get power when it was needed the most.

Paul Yeager   Has solar benefited from increases in efficiency or technology more?

Scott Graybeal   I would say cost and efficiency. So those are really the two drivers. Whenever we talk about solar, it's really about what is the cost per watt, what's the cost per kilowatt hour. And the mechanism by which you get there is through improving efficiency and lowering material costs and leveraging technologies that improve the overall Solar System's efficiency, whether that single axis trackers or better inverter, technologies, all these things need to work together. And when you design a solar module, you try to design it such that it has compatibility across this broad system that you're building, you can't build anything in isolation. And for us, it's very true because we don't make solar modules, but we produce a product that improves the performance of crystalline silicon solar modules by treating the top glass on these modules. And that's something that's helping to enhance the efficiency and lower the cost simultaneously, also designed such that it can actually integrate with the technologies available today, whether it'd be the single axis trackers or the inverter systems that are needed either in residential or in large scale utility deployments. That's something we're very conscientious of, and we work with our customers on those.

Paul Yeager   So your technology is not the panels, but improving the light that gets to the panels, and I am I, I'm trying to you're, you're in my son, you're out of I'm out of my science lane, you got to help me out here, Scott,

Scott Graybeal   no problem. So this is what we do. This is a prototype. And so this is a relatively small form factor. Imagine this thing was, let's say, you know, almost, well, six square feet. So a typical solar module. So what we do is we take the top glass that's used in every solar panel that's manufactured, and we coat it with this proprietary material stack called perovskites. And so we've developed their own profs guide formulation, what we do with that glass is we turned into another solar panel that then sits on top of the existing solar cell array, connected electrically in parallel. So now you can add the current that's produced by this top layer, and the current that's produced by the silicon cells underneath. And so by virtue of doing this, we capture more available white silicone is really good at capturing grab red and near infrared wavelengths. What perovskites are really good at are the high energy stuff that blue green light that normally wouldn't be used as efficiently. So combining the two of these things, we create what's called a hybrid tandems, tandems mean that you have one cell on top of another. So by doing this, we're able to boost the output of a given solar module without really adding much in the way of material cost.

Paul Yeager   It sounds I'm sorry, you said hybrid something and I missed the group random hybrid. Okay. Okay. That's exactly what I wanted to ask. Yeah. So it sounds like you're capturing the light twice.

Scott Graybeal   Yes. Well, you can think about it. We're taking the high energy stuff with the perovskite and letting the lower energy stuff get to the silicon, which it's the best at dealing with anyway So we're absorbing more of that available spectrum.

Paul Yeager   So it's like, okay, so then you're capturing it's like, funneling the light into where it it has its greatest efficiencies.

Scott Graybeal   That's right. It's like when you look at the rainbow, you can see these different colors. We're taking the blue green stuff, the silicones, taking that orange red stuff, and we're taking the whole rainbow.

Paul Yeager   Take a wild guess, Scott, I might not have done well in science, but I'm I'm trying to learn I play the role of those who maybe didn't do and do so well. Sorry, Mr. Thomas. Sorry, Mr. Hart. I know you tried. What is it about the science? How I mean, your company is not that old. So who had the realization of, hey, I think this is going to work?

Speaker 2   Well, we've been around since 2014. And so we've always been working on technologies that would improve the performance of crystalline silicon solar. It was our founder, John Iannelli, that thought through Hey, what if we leveraged perovskites, and there was a lot of work that was happening, one of the innovations that we've really worked on is how to scale them. And so there's a lot of fantastic work that's being done all over the world on perovskites. There's university labs that are getting 33, almost 34% efficiency now, on relatively small sizes, one square centimeter 1.3 square centimeters, what we have focused on those, how do you go and make it on a larger size. And so the size I just showed you, is what we call a sub module. And so you could put a crystal and silicon cell and we do this all the time to test the performance test the validity of this. And so moving from these little tiny sizes to something that you can actually say this is a legitimate prototype is a big move. Now, what we're working on right now, is scaling this roughly about 25x, to be this larger size, which is about two meters by about a meter across. And that's the factory that we're ramping up right now in Baldwin Park. And so we'll have about 100 megawatt pilot line. By mid next year, we'll have it all integrated by the end of the summer. So we'll be able to produce these large format glass sheets, but we'll be at full capacity by mid next year.

Paul Yeager   I'm not asking you to give all the ingredients of how Coca Cola is made. But what are the ingredients for this product? And where do you source them?

Scott Graybeal   So excellent question. So the ingredients, the stack is built up of some transparent conductive layers, which are used frequently. And flat panel display industry. So like your monitor, for example, use these transparent conductive materials. And the stack itself is called a metal halide perovskite, which uses some really basic materials. So there's nothing in this entire stack that is rare, uses rare earth materials, these are all readily available. And in fact, our supply chain today, I would call it Glocal. It's both global and local. So we have local suppliers. For some we have some global suppliers for other, but we can find everything that we really need in the United States if we needed to. So we have that supply chain diversity. And that's what's really important and even the manufacturing equipment that we use, largely equipment that we can source from multiple locations. And that's important, we wanted to be able to ensure that we have that long term supply chain resiliency, and we weren't dependent on just one geography, or in some cases, like some companies on one mine in this awful location of the world where you're dealing with a lot of issues. So these are readily available industrial materials, the secret comes down to what exactly do you put in there? What are the various let's say, treatments, you can provide passivation, chemicals, things like that. And how do you build it up? What are the processes you're using? What's the temperature, pressure flows, all of those things, those recipes themselves become really proprietary. So your Coca Cola analogy is very good, because it's not like we need unobtainium to make Coca Cola. I mean, these are all things that are relatively widely available. And that's this, excuse me, the same approach for us.

Paul Yeager   You've just figured out how to mix them all together at the proper ratios.

Scott Graybeal   And it's not Pepsi, it's Coke,

Paul Yeager   right? Way to stick with my analogy, I appreciate it. I'm always fascinated by that company. But that's another story for another day, but to their background.

Scott Graybeal   Oh, I'm sorry, just to back up just a little bit further on that. So there are a lot of people make perovskites. But there's a lot of different Colas out there. And so that's probably even further building on your analogy. You know, what makes it different. And for us, we have a slightly different spin from other folks, and they'll have their spin and they like what it does for them. And we like what it does for us.

Paul Yeager   So there are competitors then for what exactly you're doing.

Scott Graybeal   There's competitors and perovskites the approach that we're taking those a business model really only ones that we know of approaching it this way. A lot of companies want to make either solar cells, those complete cells and sell them to Module companies or they want to make solar modules or solar panels the same themselves and we don't view that as being the best To approach because we have a much broader customer base, there's over 300 gigawatts of manufacturing capacity in the world today. And that's our entire addressable market, we're not trying to compete with Module companies, we're trying to make their product better. And at a price point that makes sense for them where their cost per watt doesn't increase, and they're able to go and deliver the significant improvement in energy harvest by using the technology. So we tried to simplify it for them. Making modules is hard, you know, and so we wanted to focus being the best of the world, the profs guide on glass. Well, we'll go back

Paul Yeager   to the land here. It sounds like you're trying to not necessarily make panel's module smaller, but more efficient. So maybe you might not need as many exactly that close.

Scott Graybeal   Exactly right, you have two choices, you can either make a smaller site, or you could use the same real estate and make a more powerful site. And so those the two approaches,

Paul Yeager   yeah, because you might run into this land is not available and replaced. So we have to make what we have now. Better. That's exactly right. So in the solar industry itself, I know it's we're talking a whole lot of moving parts, there's a lot of people making all these different types of widgets. But how many companies do you think there are out there in the United States that are based in the US that are making, I'll call them enhancements for the solar industry.

Scott Graybeal   In the perovskite space, in particular, I would say there's probably about eight that I could read, you know, list. And they range in size from a couple of folks doing some great work all the way to companies like ourselves, you know, where we're employing probably close to 45 people today and ramping even further. So it's quite a spectrum. I would say the majority of them, though, on that earlier stage of that innovation cycle, where they're working on some really good stuff, there's no question about it. But we're the closest to actually manufacturing in the US. And in fact, our site will be the largest of its kind in the western hemisphere. So there are a couple of competitors we have in China, they're a similar size to what we're building here. But we're focused on making sure that we can gain a competitive edge in our market, but also internationally.

Paul Yeager   Have you been to China to see any industry,

Scott Graybeal   I have not been to China in about three years since before COVID. But we do have a presence. We are global, even at our small size. So we do have an office in Taiwan. And so we do have folks that are engaging in the industry in Asia, to really understand what are the trends? What are the things we need to be thinking about? What are the suppliers that we should maybe be looking at? Are there other partners that we can leverage. And even though, you know, we see an expansion of solar here in the United States, a lot of this is coming from Asia, so companies from China are coming to the US to expand operations, or start Greenfield operations. And the decisions get made in China. So you have to have a presence in Asia, in order to really leverage that and to be part of those plans for those expansions.

Paul Yeager   I think in a lot of industries, China gets credit for a, I won't say efficiencies but products of scale, they can make a lot of product a much more efficiently than we can in United States as the solar. And I read just recently, the solar industry in China is struggling a little bit. Is there. My Is that an accurate story? And do you know why?

Scott Graybeal   Well, I depends, I think from the lens at which you're looking at it. There, it's vibrant, I can say that. I mean, there's a lot of manufacturing, it is a very, very, very price competitive market, and has been that way for 10 years, there's a lot of price pressure in that space. But all of these companies are expanding, where the most recent challenges have happened more on an international scale manifests themselves in the tariffs that are being put in place, for example, here in the United States, as well as what we see in India and other countries that are trying to build out a solar manufacturing environment, but also with issues regarding the source of poly silicon. And most recently, we've been dealing with the Sheehan situation where there's allegations of forced labor, which really have been problematic. And so the US, for example, will not take any polysilicon that's comes from the that region. So it has to be certified that it doesn't that has not been through one of these identified forced labor concerns. So that's what's kind of cause a bit of an international strain. But overall, you know, I think the solar supply chain as it exists today is quite complex, you know, silicones, quite complex with a majority of it made in China today. And so it behooves I think any industrial country to really look at this and figure out how to do it again, themselves, they haven't done it before. And for the US, we've done it before. So now we have to turn on a lot of latent capacity and bring up new capacity in order to be more self sustaining, in that this new emerging framework, and what we're going to see over time, I think is more regionalization. You talked about regionalization in the context of one and projects. I think about it more in that geopolitical scheme. What I do think is that we do see an emerging poll that's happening polarization that's happening real time in front of us. There's a China poll, and there's a Western poll. And we do see countries that want to produce their own products put in frameworks to make that more successful in this is India and our, one of our largest investors is Reliance Industries, which is based out of Mumbai, India, and they have very aggressive plans to build out a domestic supply chain from all the way from courts to module and we're happy to be a part of that journey with them.

Paul Yeager   Well, at least in the commodities world, India is seen as someone who will buy from anybody, they don't necessarily line up with, oh, we have a strong alliance with the United States or China, or Russia, basically, whoever gets us to as the cheapest or the best we're going is that the same in the solar industry?

Scott Graybeal   No, they actually have import tariffs on Chinese products. So it'd be great in between 25% for cells, I believe in 45%, for modules, and so there is a strong push to develop a domestic industry. In fact, they've they've put their money where their mouth is, and have supported companies in developing a domestic industry. To the extent that we see an Indian manufacturer coming to the United States, Vikram solar not too long ago announced they're moved to the United States. And so they're going to build a robust industry. And I think that you're seeing a level of sophistication emerging in India, where some very high end manufacturing is going to be occurring. And I think they're putting the right investments in place to make that happen. And that's exciting to see, you know, I've been going to Indian business for going on 15 years now. And it's been it's been transformational, and I'm excited to see what they're doing. And it's fun for me when I go to these countries that are still investing in infrastructure. And it makes me proud finally, that the US is investing in infrastructure, like roads and bridges and electricity, like, Well, yeah, we kind of forgot how to do that. It's good to see a comeback, finally. But they're, they're doing the right things. And it goes all the way from investing in education and training for people all the way through, you know, the product development engineering that needs to happen.

Paul Yeager   So, I know it's a big question. And there's a lot of moving parts on this one. But Scott, who's the global leader, which country in creating solar technology improvements, and production? Well, today, it's China, still China, and social on both sides of that ledger. Correct.

Scott Graybeal   There's a tremendous amount of innovation that comes in China. And I think that we were really 50 I was part of many these meetings back in that solar to Dotto day, where we didn't believe a lot of what we were hearing about China, we couldn't believe that polysilicon costs could drop as low as they can, there was people that would go to these meetings, and show all this math behind why Oh, everything coming out of China must be money losing, there's no way that they're doing it, the lowest cost we can get out of the Siemens process, which is the process in which you make poly silicon is $30 A kilogram, I remember being in a meeting and somebody said that and they swore by it, well, we see polysilicon prices that range between 10 and $15 a kilogram pretty regularly. So that was wrong. And what China's showed the world was something that we had we had proven as a country is that scale drives cost down over time. And this was a gentleman that named Theodore right at of right aerospace in the 1930s, developed the concept of learning rates, and for every doubling of capacity costs would go down by a fixed percentage. And that's exactly what happened, nobody was investing at the scale that China had invested in. And we can't shake our fists and be too angry at it, because we didn't do it. You know, we didn't invest at that scale. Now, what we do have, though, is intellectual property protection. And that's an important feature even of our business. So things that we develop, of course, we go seek the maximum out of intellectual property protection, we can and I think any company that does it is hurting themselves, obviously. But we do have a functioning system that provides injunctive relief, if somebody is violating patents as an example, and wishes to import into your market or any market in which you have patent protection. So there, there are mechanisms in place that we can protect ourselves as a company, unlike many other companies can as well, but China still dominates 45% of all solar consumption today is in China, and it's all from domestic sources, that relative fraction is going to decline, though by 2030. By 2030. It'll be more like 39% with with really the US and India growing. And so the US India's solar markets are growing faster than the Chinese solar market on a percentage basis.

Paul Yeager   So I see the pictures of China with their their air quality and, you know, their their factories or their power plants that are driven by non renewable sources. And so I mean, given what you just said, I think you're going to see some improvements in air when you don't have all that coal being produced in and shoved into this to the atmosphere.

Scott Graybeal   Yes. And there's also a demographic challenge in front of them as well, if you buy into the idea that the inverted pyramid that we see emerging in China today, and it's tough to really believe, I think some of the data that comes out officially, but I think the unofficial sources show that that pyramid is probably more stark than what we really acknowledge, that's going to drive also, by relationship, I think, an improvement in air quality, because you won't need as much electricity to support a smaller economy. And so you know, if you subscribe to that, then that's also an ingredient here. But you're correct. I mean, if you but there is still a lot of coal production that's being put online every day. And that's because you're trying to fuel an economy that is really needs thermal sources and electrical sources to grow. And it's tough, because today, when we think about solar, we wouldn't consider it a quote unquote, dispatchable resource. And there's an argument, then I've seen both sides of this argument saying, Well, okay, in just the scenario you and I talked about, if you have solar, let's say, in Southern Nevada, and you're sending it to Iowa, that's almost a dispatchable source, because there's not a lot of rainstorms in Southern Nevada, there, it's there's likely to be less intermittency. So you get a fuller, let's say, slice of the day would be coming from that source. And that does bring a little bit of despatch ability to the equation, but it's hard to talk about renewables without talking about energy storage nowadays, and you need both Right, right. So low cost, energy storage is still something that we as a country should be investing in. And driving in there, there. There is a tremendous technology out there, we're starting to see emerge that I hope will change the equation. But today, the automotive industry is really driving a significant amount of demand for lithium ion batteries as an example. And I had been involved in energy storage extensively at one point in the challenge we had was they were the the automotive industry was driving demand, and they were taking off demand and it was hard to find batteries for a stationary storage projects. Which kind of leads you down the path is is lithium ion the best solution for stationary storage? Should we be looking at other technologies? And there's many companies would argue, yeah, absolutely. Come look at vanadium redox. Look at these different technologies, some of which we haven't even talked about, or thought about. There's some really interesting work happening there. And that needs to be deployed at scale to really make renewables dispatchable and much more useful.

Paul Yeager   Alright, final thought here. Scott. Do you anticipate the solar industry in the next 16 years, we'll have as much growth and expansion as it did in the first 16 years of your career?

Scott Graybeal   Oh, absolutely. The solar industry itself is going to be three to four times larger than it is today. When we look at just installations. It's incredible to see the growth and it's continuing to accelerate. Like I mentioned that we have 100 megawatts site here today, that's considered a pilot line. 16 years ago, this was a full blown manufacturing operation. And it's a drop in the bucket by comparison. Today, we're going to continue to see this acceleration. But I would say that that acceleration is only going to occur with increased innovation. And the exciting thing about where we're at today is that we're at the beginning of this PV three Dotto revolution, where we're going to see lower cost solar, more reliable solar and more powerful solar hitting the market, which is just going to almost become a flywheel effect, as we see this industry continue to grow.

Paul Yeager   Is your facility there powered? How much by solar,

Scott Graybeal   we've got about 90 kilowatts on the roof here, we're going to expand that once our product starts coming off the line with our partner module company. So we'll be putting some of our stuff in and hopefully I've every square inch we possibly can cover. So I couldn't give you a breakdown. I haven't seen the electric bill yet.

Paul Yeager   I mean, is it like a fourth of what you use?

Scott Graybeal   I would estimate that's probably safe to say, yeah, yeah.

Paul Yeager   When you start adding up a fourth everywhere or a half, or whatever it ends up being that's a that's a huge contribution to the overall power grid, and a removal off of the grid of the demand that would be needed.

Scott Graybeal   Yeah, is significant. And there's a trade off. And we look at the macro that we have to be thoughtful about. And that's where we're here in California, we have that duck curve. And you've probably heard about that we produce so much solar electricity during the day, the demand curve went from being kind of like a camel to now being like a duck. And where where we need to be thoughtful about now is now we're producing so much solar, how do we store it cheaply, so that we can use it in the evenings? Because peak demand now is shifted to like between 7pm and 9pm here in California, and so that's some things we need to work on. But it's it those are good problems to have in my book. Well,

Paul Yeager   I think you're not you're not alone in that that there's a lot of these renewables have been trying to figure out how do I store energy for me that's still the legacy See energy production? Cold doesn't It doesn't matter if it's night or day, right? It works. I mean, wind is to an extent, works in night or day, but it doesn't work on a calm day. Today outside my window. Yes, it's working. But and so would my solar panels if I had them. So everybody's, excuse me trying to figure out, like you said, how to store it, so we can use it when it's needed. Is that line that part of the business next?

Scott Graybeal   Yeah. Well, I think that's an important, important consideration. We do pay attention to that market quite extensively. But also we pay attention. And we work with companies that are in the carbon capture industry, hydrogen, hydrogen production, Evie charging, were part of that solution set because everybody needs cheap green electrons. And that's something that is helping to really accelerate the deployment of solar, particularly high efficiency solar products that are low cost.

Paul Yeager   All right. Well, if we keep going, we're both gonna get in trouble politically, because we could really step into open up a whole nother can of worms, Scott. It's hard. It's hard to avoid it. But yeah. Scott, I appreciate your time. Thank you so very much.

Scott Graybeal   Thank you. Appreciate the time, Paul. It was great meeting you.

Paul Yeager   All reminder, New episodes come out each and every Tuesday. We thank you for making us a part of your learning experience. Thank you so much. If you have any feedback for the show. Send it in an email MarkettoMarket@IowaPBS.org. We'll see you next Tuesday for another installment. Bye bye.