The R&D Tax Credit Aspects of Solar Technology
Solar-Technology
Every four minutes a photovoltaic system is
installed in the U.S. Recently emerging solar
technologies can help reduce greenhouse gas emissions as well
as reduce U.S dependency on foreign countries for energy
supply. However, before solar technology can become ubiquitous
throughout the states, some hurdles have to be overcome.
Roadblocks for solar technology include creating panels that
are more efficient, determining how to efficiently store
energy generated from solar panels, efficiently converting
solar energy from AC to DC, and reducing the installation
costs of solar panels.
Government agencies, universities, and private enterprises are
all working vigilantly to turn these barriers into bridges and
poise solar energy to become a predominant energy source in
the world.
Presently, most solar panels convert less than 20% of the
energy from sunlight into electricity. Increasing the
efficiency of solar panels is one of the most direct ways to
ensure that this technology gains traction. Companies involved
in the research and development of more efficient solar
technologies are eligible for substantial R&D Tax Credits.
The Research & Development Tax
Credit
Enacted in 1981, the federal Research and Development (R&D)
Tax Credit allows a credit of up to 13 percent of eligible
spending for new and improved products and processes. Qualified
research must meet the
following four criteria:
- New or improved products, processes,
or software
- Technological in nature
- Elimination of
uncertainty
- Process of
experimentation
Eligible costs include employee wages, cost of supplies, cost of
testing, contract research expenses, and costs associated with
developing a patent. On December 18, 2015 President Obama signed
the bill making the R&D Tax Credit permanent.
Beginning in 2016, the R&D credit can be used to offset
Alternative Minimum Tax and start up businesses can utilize the
credit against $250,000 per year in payroll taxes.
Companies
involved in
the development, manufacturing, and installation of solar
technologies can potentially offset high R&D costs by
utilizing the R&D Tax Credit.
Efficiency Through Color Separation
The majority of solar panels today are made up of one
semiconductor material, usually silicon. Using one kind of
semiconductor material only allows certain frequencies of
light to be converted into electricity causing other
frequencies of light hitting the panel to be lost as heat.
Figure 1: Price
History of Silicon PV Cells since 1977
Researchers at Caltech Institute of Technology are working on
increasing the efficiency of solar panels by creating
precisely structured materials, which are able to sort
sunlight into ten different colors. Once the light is divided
into its various colors, the light can then be directed at
solar cells with semiconductors that are designed specifically
to convert the particular color of light coming in, into
electricity. This process greatly increases efficiency and
electricity generation.
This technique of sorting light into different frequencies is
not new but in recent years, there have been breakthroughs in
manipulating, sorting, and guiding light. Using light
separation, solar panels can be expected to convert 50% or
more of the energy from sunlight into electricity.
Nanotechnology and Solar Cells
Nanotechnology has the potential to revolutionize solar cells.
One of the most beneficial aspects of nanotechnology in
the manufacturing of solar PV cells is the cost savings. Less
energy is consumed in the
production of nanoparticle solar cells than in the
construction of conventional PV cells made from crystalline
semiconductor material, which uses a high-temperature vacuum process.
Nanoparticle PV systems are also less costly to install due to
their lightness and ability to be produced in flexible rolls.
The installation of these soft rolls does not require the need
of expensive metal mounting systems and supporting tools.
Conventional rigid PV systems use panels that come in large
rectangles and when wind blows at high velocities, these
panels can be ripped off roofs if they are not anchored
properly. Currently, nanotechnology solar cells are not as
efficient as other solar technologies, however the cost
savings of nanotechnology can offset this lack of efficiency.
Carbon Nanotubes
Carbon nanotubes (CNTs) will allow for lighter, flexible, and
less expensive solar cells. CNTs have been deemed a promising
material to construct solar cells from, but the technology has
proved to be inefficient compared to silicon solar cells.
Recently, a research team at Northwestern University’s
McCormick School of Engineering has developed a new type of
solar cell that is twice as efficient as earlier CNT solar
cells. This was accomplished by altering the CNT’s chirality,
which is an amalgamation of the carbon tube’s diameter and
twist. Previously CNTs were constructed using one kind of
chirality; the only issue with this approach is that each
chirality only absorbs a narrow range of the light spectrum
coming in.
The new approach in the design of CNT panels is to use
multiple chilarities; this has allowed for a broader range of
frequencies to be absorbed by the panel. New polychiral CNT
panels developed by Northwestern have been able to absorb
near-infrared wavelengths, a capability that many leading
thin-film technologies lack. CNT technology still lags behind
silicon PV panels, but CNT panels have the advantage of being
less expensive to manufacture. The end goal of CNT technology
is to develop panels capable of converting every photon from
the sun and converting it into electricity.
Perovskite Developments
Perovskite has unique properties that are being tested in
solar panel design. It has the potential to replace silicon as
the primary material used in solar panel construction due to
its ability to be made into layers 1,000 times thinner than a
human hair. It can also be tinted different colors and
applied to flexible films. All these characteristics make
perovskite an ideal material to be integrated into special
coatings that can act as paint. This would allow the sidings
of buildings as well as many other surfaces to be potential
sites for solar energy production.
University Efforts
MIT
The Massachusetts
Institute of Technology is pursuing ways to make solar
technology more efficient. Their most recent breakthrough
involves advances on the quantum level. At approximately 9%
efficiency, MIT has set a new record efficiency for
quantum-dot-cells.
Quantum dots cells use a matrix of finely
tuned crystals that are tuned to specific frequencies of the
light spectrum. The major advantage of quantum dots is that
they are capable of exciting as many as seven electrons from
each passing photon in light. This is far more efficient than
silicon panels, which are only capable of exciting one
electron from each passing photon of light. This 9% may
seem trivial but what makes quantum dot cell panels so
attractive is that they are inexpensive to manufacture and
they are highly adaptable. In addition, silicon technology has
had six decades to reach its current level of efficiency and
still has not achieved its theoretical efficiency. Quantum dot
cells are a new technology and have only been around for four
years, making 9% efficiency a major accomplishment.
Michigan Technological University
Michigan University has
teamed up with Queen’s University in Canada to take a
different approach to increasing the efficiency of solar
cells. Instead of increasing the effectiveness of the panel
itself, they are going further up the energy food chain to
improve efficiency. The goal is to get more light to shine on
solar panels. The increased light will allow the solar panel
to convert more light into electricity.
When flat-faced solar panels are installed for a large-scale
system, they are spaced apart to prevent shading. As the sun
shines on the PV system, a large amount of potential energy is
lost due to the light hitting those spaces. By installing
reflective material in the spaces in between the rows, light
can be reflected back onto the panel.
This solution may sound simple, however forcing solar panels
to receive more light than they were designed for will cause
the panels to work harder and reduce their lifespan.
Another unintended consequence of increasing the amount of
light that hits a solar panel is that this light heats up the
panel and reduces the panel’s efficiency. Many people may
think the hotter and sunnier it is, the more electricity a
solar panel will generate, but this is not the case. The drop
off in efficiency for solar panels due to heat begins at about
87 to 91 degrees Fahrenheit.
Researchers at Michigan and Queen’s University are using
mathematical analysis to reduce the risks associated with
bi-directional reflectance function. Through their analysis,
they were able to strategically place reflectors to increase
the efficiency of a solar farm. They were able to increase the
effectiveness of the panels by 45% and simulations showed that
efficiencies could be increased by another 30% if better
reflectors were used.
Cornell University
Cornell is heavily
researching the chemistry behind solar cell design by layering
thin films of organic-inorganic metal halide perovskite onto
silicon to increase efficiency. The process of
developing new PV material starts with the development of a
solution of organic and inorganic molecules. The solution then
must be refined so that it can be smooth and defect free. Labs
around the world are finding it difficult to develop a
defect-free perovskite, however, Cornell researchers have
accomplished near-perfect solar cells using non-halide lead
acetate. One of the major advantages of using this new liquid
source is that it can be easily applied using a simple
solution coating.
Yale University
Yale is conducting research that
promises to significantly increase the efficiency of polymer
solar cells. Dr. Andre Taylor’s Transformation Materials &
Devices Lab at Yale has developed a polymer solar cell that
performed 22.5% better than standard organic solar cells. In
their lab, they were able to reach conversion efficiencies of
8.7%. Researchers used a technique known as solvent vapor
annealing (SVA) which chemically modifies the properties of
the polymers to align better than conventional thermal
annealing (in which heat used during the process reduces the
performance of the polymers).
U.S. Army
Recently, the U.S. Army has obtained a patent for the
development of a tiny photovoltaic solar cell. The new cell is
significantly smaller and cheaper to manufacture than current
solar cells. The army is developing these economical, compact,
flexible, and efficient solar cells to be installed on all
sorts of military equipment to power remote equipment that may
have to operate in inaccessible areas. The army is also
looking into ways to overcome wear out, damage, and
stress-induced to PV structures due to heat.
Artificial Intelligence
The use of artificial intelligence (AI) to solve
everyday problems is gaining serious traction in all
industries including the solar industry. AI is starting to be
used to model, analyze, and predict the performance of solar
energy projects. To design solar systems with the
highest efficiencies, it is necessary to collect and analyze
metrological, solar radiation, temperature, and wind data from
the area where the projected solar project will be
constructed. Unfortunately, these kinds of data sets may not
be available, may be of poor quality, or does not encompass a
sufficient time span. AI can be used to fill in these gaps
more accurately.
One of the major downfalls of solar power is its
intermittency. Artificial intelligence can help reduce the
uncertainty associated with this intermittency and be an
essential tool to integrate solar technology into the grid at
scale. Artificial intelligence in the future will allow
utility companies to more accurately predict days where solar
energy will not produce enough to meet demand. In these
instances, utility companies can take action to ensure enough
energy is produced through other means, in order to meet
demand.
Batteries
Historically, one of the biggest factors preventing solar
panels from being ubiquitous has been their intermittent
nature. Being able to generate electricity at night is an
obvious problem, but cloudy or snowy days are also primary
concerns. This inability to continuously generate electricity
has forced facilities that use solar panels to be tied into
the grid or to be hooked up to a battery bank. Both
these options add to the cost of installing a PV system and
therefore the cost per watt for installation.
This is becoming less of a concern with the development of new
battery technologies that increase efficiency while at the
same time reduce the cost of manufacturing. Products
like the Tesla Powerwall are not only allowing homeowners to
store power more economically than ever before, they are also
providing a turnkey solution that makes solar technology more
appealing to prospective consumers.
Power Inverters
Power inverter technology is another aspect of photovoltaic
system design that is getting recognition. Companies like
Google, who constantly have their eyes focused on the horizon,
understand that development of power inverters will be
essential in increasing solar system efficiency. In 2014,
Google announced a $1 million competition to generate new
ideas and innovations that will spur the next generation of
solar power inverters.
Sunlight energy is converted into electricity in the form of
Direct Current (DC). Homes that are tied into the grid rely on
Alternating Current (AC); this is why it becomes necessary to
use a power inverter to turn the DC current into AC. However,
during this conversion process energy is lost due to the
inefficiency of power inverters. Most solar inverters are 95%
efficient, however some systems can become highly inefficient
if an inappropriate power inverter system type is put in
place This 5% efficiency gap may not seem like a big
deal, but when extrapolated over a year for a large-scale
system, the number of watts can quickly add up. Increasing
efficiency of all elements of PV systems allows steady
increases in efficiency without the need for a major
breakthrough in one particular technology, which can be harder
to come by.
Figure 3:
DC to AC Power Conversion
Conclusion
Solar technologies are evolving rapidly.
This industry is expected to grow tremendously in the next ten
years. Companies that are involved in the development,
manufacturing, and installation of solar technologies can
offset high R&D costs by utilizing the federal R&D Tax
credit. Many firms incorporate the credit into their business
model and use the savings as a way to fund future research and
process improvement.