New Jobs and New Math

The job market seems to be the #1 subject on people’s minds.  And government has a role to play at many levels.  We hope the role is helpful.  But it’s not always so.

The oil industry has known for many years that oil can be extracted from shale rock by heating it.  But in the past, when oil was cheap, this process was too expensive, oil would have to be around $50/barrel to make it profitable.

Well, we hit that and more.  Recent crude pricing has been hanging out at $75 a barrel.  So it’s not surprising that shale oil has been developing in the background.  Shell Oil had fully operational pilot plants, spent the money, applied for the permits.  Shell also announced that the industry would create 10,000 jobs nationwide and capacity to directly reduce a fraction of our oil imports from foreign sources.

The Canadians were sitting on similar resources.  I guess the geology of the Rocky Mountains is the same from Colorado to Canada.  And the Canadians spent the money on pilot plants, applied for the permits and started building plants.

This is pretty big stuff.  Getting tons of rocks crushed, transported, cooked until they release their oil, distilling the oil into a usable form.  Big machinery, lots of equipment.  Lots of work.

The only difference with these two stories is that the Canada has completed its first two plants and is planning on a pipeline to the US where they are going to sell the crude to US refiners.  In the US Interior Secretary Salazar denied the permits to Shell Oil saying that the land use was not consistent with our national goals for the use of the land.

As a former resident of Colorado, I have to say, the land in question is some of the most remote and unusable land anywhere to be found.

So what’s the deal?

Before an election its all about the jobs coming back to the auto workers.  After the election its jobs that are never coming back to automotive sector.

State governments have fallen victim to a similar myth in the green economy.  Alternative energy is reportedly going to bring tens of thousands of new jobs to the economy.  And government officials at the state level are trying to parlay renewable energy projects into increased employment in their states.  And that’s fair.  They should be looking for all the help they can.

But many renewable energy jobs are temporary.   A wind farm project may only employ a few hundred people and after the project is done they have to find a new project.  A new wind turbine manufacturing facility in a state is not like an automotive plant.  The plants are usually manufacturing a sub assembly or part for the wind turbine.  The actual number of people required to build a certain part may be 80-100.  Much of wind turbine machinery content is offshore.

The other “new math” of the job conversation is jobs that are “created or saved” by government intervention.  Well, that’s a tough one to prove.  I surveyed several industries using the Department of Commerce industrial output data.  For many industries the relationship is $220,000-300,000 of sales per employee.  Obviously this number can vary quite a bit.  But to “save or create” 30,000 new jobs takes sales of $7.8 Bil of new products or services.

Somebody has to spend a lot of money.  Which means that somebody also has to earn a lot of money. Government cannot spend to offset a recession.  They can only dig the hole deeper.  New products come from entrepreneurs.  And people who are working buy new products.

We need government to help create new jobs, not destroy them.

Robotic Machining Cuts Part Lead-Time From Months To Days

Subtractive processes, often referred to as CNC machining, have not stood still in the rapid prototyping arena. Faster tool path generation is just one of the newer developments enabling machining to play a strong role in the rapid prototyping and direct digital manufacturing arena. Now, robotic machining has the potential to significantly affect the rapid casting arena, especially in the area of large castings. Tooling costs as well as lead times increase dramatically as parts get larger. The equipment needed to deal with the size and weight of extremely large parts becomes more rare and thus, more expensive. The larger the equipment used for these large parts, the slower it will operate due to its heavy physical characteristics. The most significant advantage that robotic machining seems to have is the fact that the robot moves independently of the work piece giving it the ability to feed as quickly on a large part as it does on a smaller, lighter part.

The US Department of Defense (DoD) has been seeking a way to reduce the cost of producing cast spare parts. The Advanced Technology Institute (ATI) currently leads several national collaborations that are developing advanced robotics capabilities and implementing both new and existing robotics technologies in response to the DoD’s need.

One collaboration is with the American Metalcasting Consortium (AMC). The ATI-managed AMC partner companies, like Clinkenbeard, are using robotics technologies to support legacy weapon systems; which could help meet the Defense Logistic Agency’s goal of dramatically shorter lead times for the production of legacy weapon systems parts. The patented Clinkenbeard® Toolingless Process proved that it could reduce lead times for military cast spare parts from six to twelve months to six to twelve days.

The results, according to ATI, also demonstrated that the Toolingless Process can reduce capital investment by as much as 35%, reduce individual parts cost by up to 20%, and improve cycle time by 25%.

Lead times often exceed a year because technical data may require reworking, including the development of a solid model of the part. But, even when a solid model is generated first, the Clinkenbeard process can supply a cast part in less than a month. The secret is computer-generated molds with no tooling.

The Toolingless Process consists of machining sand cores and molds, and is accurate. According to the company, this process can reduce the lead-time to obtain development castings by up to 90%. With this process, you can:

• eliminate the need for prototype tooling, depending on project requirements.

• make and test multiple design iterations during product development, from the simple to complex parts.

• reduce the cost of production tooling for one-of and small quantities.

• obtain accurate, prototype parts while large quantity tooling is made.

• eliminate tooling inventory.

• match exact production core materials and chemical levels so that prototype castings emulate production.

• incorporate engineering changes into high-volume production sand cores.

Clinkenbeard developed the sand machining process using CNC machining centers. By using robots with sand machining, company technicians can use the process on much larger molds and cores. Robotic technology will reduce the cost dramatically compared to the same expenditure for CNC machining centers.

Clinkenbeard
www.clinkenbeard.com

American Metal Consortium

http://amc.aticorp.org/

Defense Logistic Agency
www.dla.mil

Advanced Technology Institute (ATI)
www.aticorp.org

Universal Robotics Lauches 3D Software Compatible With Webcams

Universal Robotics, Inc., a software engineering company, announced the launch of two simple-to-use 3D vision software products: Spatial Vision and Spatial Vision Robotics. The products can turn any pair of webcams into a highly accurate, cost-efficient 3D vision system that can be employed in virtually any setting without expensive equipment.

With Spatial Vision and Spatial Vision Robotics, a user can plug in the cameras, calibrate their space and receive highly accurate measurements in under 30 minutes. These products will expand the use of 3D vision to markets where it hasn’t been feasible before.

3D vision systems offer many benefits over their 2D counterparts, including better accuracy and object identification and tracking, which are essential features in security, engineering and robotics applications from biometrics to real-time control of machines. Despite their benefits, broad adoption of 3D vision systems has been limited in many markets because the systems can be costly to implement and maintain.

Universal’s Spatial Vision products eliminate the need for the precision mounting, specialized cameras, and time-consuming set up that is required for many 3D vision systems. Using two webcams that can be set up and calibrated within a matter of minutes, Spatial Vision and Spatial Vision Robotics can determine the 3D position of any point relative to the cameras with millimeter accuracy.

The Spatial Vision product can be easily deployed in any setting in which cameras can be installed, including laboratories, office buildings, department stores and warehouses, and is an affordable solution for anyone looking for an accurate way to observe and measure an environment. It can be employed in security applications, measuring in-store foot traffic patterns, and more scientific applications requiring object tracking and visual analytics without a wand or sensing device. Spatial Vision offers 30 percent improved accuracy over 2D systems used in object identification and tracking applications, such as facial recognition and other biometrics. It is optimized for use with popular Logitech 9000 webcams, but can be  customized to work with any USB 2.0 camera.

Spatial Vision Robotics has been specially designed to be used in concert with automated machines. By adding LEDs to points of interest on moving machinery, Spatial Vision Robotics provides 3D position on the machine and its surroundings in robot coordinates as seen from the camera. The program enables 3D calibration between the extrinsic object of interest, the robot and the cameras, as well as intrinsic calibration with the cameras. It can work with any robot and is currently optimized for Yaskawa America (Motoman) SDA-series robots. Spatial Vision Robotics can be integrated with path planning and high-speed inverse kinematics to enable real-time control of robots.

Spatial Vision and Spatial Vision Robotics were created as part of the development of Universal’s signature technology, Neocortex™, a sensory-motor based form of artificial intelligence that enables moving machines to learn from their experiences and perform tasks that are unsafe or difficult for humans. Neocortex was developed over seven years with NASA and Vanderbilt University, and was funded by U.S. Department of Defense.

www.universalrobotics.com

Mechatronics and Economics

Recently, I did some industry analysis on jobs and revenue.  How many dollars of sales are required to “create or save” a job in a given industry.  I only looked at a couple of industries and found that it ranged from $219,000 to $275,000 in sales for certain types of processed materials to employ a worker in that industry.

Obviously, this type of metric will vary wildly depending on how highly automated a particular industry is.  The beverage industry is highly automated and doesn’t have a large employee staff to generate finished products.  But interestingly, the companies that build machinery for the beverage industry have fairly high employment because it takes a combination of technically trained skilled workers to make the machinery that makes the beverage products.

The agricultural economy has grown dramatically with the introduction of machinery to assist in the process. Complex machines have been developed for many applications to increase productivity.  The latest round of enhancements are tilling and planting equipment that uses Global Positioning Satellite information to keep the tractors in a straight line and computer plots of the land to maximize the planting area per acre.  Pretty amazing stuff.

In the automotive area, there are some interesting statistics.  In the ten year period from 1998 to 2008 the industry increased its gross output per employee by 33%.  This is a huge statistic and represents the long term impact of automation on the manufacture of vehicles.  The other interesting statistic is that the average internal price of a car today is the same as that ten years ago.  Given that the US industry has pushed it’s quality to compete with the Japanese cars that were perceived as superior to US in quality, this is an amazing feat.

Of greater interest is the comparison of total vehicle shipments.  The most cars and light trucks ever shipped by the US Auto makers was in the year 2000 when we shipped 17.8 million units according to Ward’s Auto which reports on the car industry.  This feat was almost duplicated in 2005 when 17.4 mil units were shipped.

A relatively stable manufacturing base over the years, the US auto industry hit a disastrous slide in 2008 shipping an anemic 13.49 mil units followed by an even worse 2009 when we shipped 10.6 mil cars and trucks.  This was the year in which the Chinese automakers topped the US manufacturing rate for the first time ever.  A point that the Chinese press made with great vigor in spite of the fact that the majority of Chinese automakers are actually joint ventures with foreign companies, the single original Chinese auto maker being in great difficulties due to poor product quality.

The 2009 US auto showing is particularly dismal when you consider the “cash for clunkers” incentive which spent $1.4 billion taxpayer dollars to generate 200,000 additional unit sales.  A small showing in the scheme of things even if the market was 10 million units.

Will the US auto market pick back up? Certainly, but not to the former highs of 2000 and 2005.  2009 shipments were off by 40% from the 2005 high, and that is too much of a gap to be easily recovered.  Especially when unemployment continues to be running in the 10% range and higher.

Is there hope?  Yes.  Serious electric hybrids and battery manufacturing for the US automakers will create tens of thousands of jobs in the next couple of years.  Demand for foreign hybrids has been running at over 400,000 units per year, and will likely increase once there are quality US made products available.

States that pay attention to the needs of the industries they provide locations for are States that will thrive with low unemployment and low deficits.

Linear Actuators

Linear Actuators are a class of mechatronic systems with some unique design constraints.  As a result there are dozens of approaches, dozens of vendors, the option of designing the actuator from scratch, and, frankly, a lot of confusion.  The problem lies in the fact that the actuator as a subassembly is the combination of a number of separate technologies.  This means there are a number of design tradeoffs incorporated into the resulting actuator that must be acceptable in order to use that actuator.

Categorizing linear actuators is not entirely straightforward because many categories overlap.  The “motive power” category can be any type of power source, rotary motor or linear motor powered.  Linear motor solutions are much more commonplace in linear actuators today due to declining costs for this technology choice.  But in a linear motor based actuator, the linear motor is both the motive power and the mechanical transmission at the same time.

Categorizing linear actuators by their mechanical transmission style is another approach.  The most common categories are screw type, belt and linear motor.   But the motive power for a screw based actuator could be a stepping motor or a servo motor.  The stepping motor is predominant because of it’s suitability for positioning, but it may be underpowered for some applications where a servo is needed.   So the linear actuator transmission category can have overlaps because of the different motor types that are used in conjuncion with it.

Price seems to be one means of eliminating the ambiguity.  Stepping motor and lead screw combinations are popular because they are economical and maintaining 0.001″ accuracy is very easy.   Linear motor systems are capable of .5 micron accuracy with little or no friction, acceleration and speed that is incredible, but generally the higher performance comes at a higher price.

But in the end, the selection process is best guided by the criteria of the application.  The list is, thankfully, short.  Load weight or force that must be generated, speed, accuracy and life expectancy or number of cycles of operation.  This last is probably the key determinant in system selection.  Long life or high cycling goals lead to linear motors actuators with little or no friction. You have to familiarize yourself with the overall field because the tendency of confusing the technology and the application needs.

At the recent Semicon gathering of manufacturers involved in semiconductor manufacturing, a lot of attention is given to the mechatronic content of machinery.  And as far as I have been able to determine from many different market research projects, semiconductor manufacturing is one of, if not, the largest market for mechatronics every.   So it’s also not a surprise that a lot of vendors come to the Semicon show with their latest and greatest product offerings.

Among the most interesting, Nanomotion continues to extend the reach of piezoelectric linear motors, yet another technology choice within the linear actuator sphere.  Piezo motors have only one moving part, and meet the high precision, high reliability criteria.  With increasing usage, there has been decreasing cost for this unique solution, along with superior position feedback technology and excellent packaging for space constrained applications.

In addition, IKO has released a number of new linear actuator assemblies, both screw driven and linear motor driven.  They are also showing a number of unique 2-axis configurations one of which is the thickness of a tape reel and is targeted to unloading parts for electronic pick and place machinery.

Brilliant examples of manufacturers continuing to integrate mechatronic technology to make it more convenient for the customer.

Cars, Cars, World Cars

They are everywhere.  And even in the electronic age, the economic impact of the automobile is probably the second largest segment of the economy in the US.  And a very large feature in every industrial economy in the world.

Worldwide, we hit a recent high of 54.9 million cars built in 2007.  But there have been steady declines since.  2008 saw a slide of 3.7 percent with 52.9 million cars shipped.  2009 was down nearly 2% at 51.9 million, and 2010 appears to be on track for another sluggish year with just under 51 millions units expected to ship by year end.

The regional variances are really interesting.  Fiat’s CEO estimates European car sales to slow down by 15% during this year.  US sales, briefly bolstered by “cash for clunkers” were the worst in 24 years at 10.4 million units with sales by the Big 3 reportedly off by 20+ and 30% levels.  So if Europe and the US are off by double digits, and worldwide sales are only off by a percent or two, where are the rest of the cars being sold?

Amazingly, China’s market for new cars is exploding in double digit growth and the Chinese Auto Industry reports 13.6 million units sold in 2009.  That much more extraordinary since in 2006 they sold only 5.4 million cars.  This report has made the news everywhere.

It is certainly with great pride that the Chinese Auto Industry makes this announcement.  However, as I read the announcement more closely, they include in their data commercial trucks, which may not be the same as our light duty truck category, and buses, which are generally low in volume and shouldn’t really make much of a difference.  But differences in the reporting basis are a cause for concern about the claim and the comparison.

China has, over the two decades, worked very hard to bring its massive industrialization into the world market.  They began an aggressive program to graduate 5000 students per year with qualifications in the semiconductor industry.  With considerable forethought, they have battled their way into the mainstreams with wafer fabs and all the needed resources to become a world leader in electronics.  The years of effort have paid off.  China is the low cost leader worldwide in electronics.  But you still have to watch quality and consistency closely.  And there is still a logistics cost to ship to foreign markets like the US.

In the automotive industry it’s a bit more difficult.  Every major material science and manufacturing process must be mastered to build complex machines, often containing more than 10,000 unique parts per vehicle.  Every mechatronic discipline is involved in the vehicle operation and even more complex mechatronic challenges exist on the manufacturing floor when you are trying to make 1,000,000 of something.  It’s a daunting challenge.

Of the top ten brands in China’s car market, 9 of them are foreign joint ventures.  BYD, the lone Chinese supplier among them, is experiencing great expansion, great sales success, but significant quality problems as well.

There are a wide range of choices in the worldwide auto market.  From the Smart Car’s 45 mpg and $12,000 sticker price to the late-great Hummer’s 9 mpg and incredible $40 to $60K selling price. Italy’s Fiat has re-issued the 500 model with an impressive 69 mpg fuel rating and a price of about $13,000 (this will vary quite a bit with the Dollar versus Euro swinging around a bit).  This car hasn’t been available in the US but with the recent shuffle with Chrysler, it is possible we could see it in the future.  And 69 mpg would bring a lot of interest, even at current gas prices.

Is China going to be the giant in manufacturing over the next 10 years?  Without a doubt.  But there is still a lot of work to be done.

Are US Auto Sales coming back?  Several forecasters are projecting significant increases in 2011.  Many people, rightly concerned with a soft US economy, are uncertain.  But financial incentives for new car purchases may again be on the horizon.  And more innovation is coming as American car makers introduce more electrics, hybrids and high mileage gasoline vehicles to the market.  With a little luck, things could get a lot better.

And I am betting that they do.

Mechatronics as Process

There are three basic disciplines of control.  Discrete control which generally relates to making a product or dealing with sequential and event driven logic, process control which deals with the conversion of raw materials into more complex bulk products, and real time control of things like electric motors.  In general, discrete control is not really time based, although there are exceptions. Process control is based on longer time periods due to the nature of the large batches of material that are being processed and the associated thermodynamics.  The hardest of all real time control in the case of electric motors which requires nanosecond capability from the embedded control system to achieve the performance needed by energy conserving systems.  As a by product of the different time bases, each technology has grown into it’s own discipline and control philosophy.

Occasionally the line between mechatronics as the design of mechanisms in discrete manufacturing and applications that are more process oriented blur the neat categories of the major control disciplines. More and more control system requirements involve the blending of 2 or 3 different types of control into a single architecture.  This creates subtle problems in order to properly architect the system so that the final effects are achieved.

Polishing and grinding, for example, appear to be positioning applications.  A grinding wheel or buffing wheel must be brought into position to make contact with a workpiece.  So the normal control system behaviors must be dealt with in order to achieve position.  But positioning the tool is only the beginning of the process.

How do we measure the process of grinding or polishing?

And most importantly, how do we know when it is done?

The process of grinding or polishing is a matter of torque in the application of the working tool to the workpiece it is in contact with.  Generally through an electric motor that is turning the tool.  By measuring the torque, which is current in the motor, we can know that the actual process is being achieved.  It may require empirical measurement to determine how much torque is required to achieve the proper surface finish, but there is a direct correlation.  Too much current means the tool is buried in the part, too little current and there is no work being done.

But at this point, there is a process that can be controlled.  If the proper torque level is applied through the motor the runs the tool, there is also a corresponding value as the contact is reduced that indicates the completion of the process.

This behavior is completely separate from the position of the tool.  However, if there is reduced contact with the workpiece due to the tool wearing out, that is, the size of the tool has decreased slightly, then the positioning system has to be updated to compensate.

These are simple concepts, but they are often overlooked.  Ironically, there are many applications that require close consideration of the mixed control methods.  Chemical mechanical planarization of silicon wafers suffers from similar difficulties with the need for extraordinary precision in polishing the surface of the wafer.  Do we really know when the process is done or do we just leave it running an extra 20 minutes just in case?

There’s always room for improvement.  And some of the recent control system innovations are delivering significant performance that should be considered as we pursue new applications.

Gears Boxes and Life Expectancy

Gear boxes are a complex subject in their own right.  The equations of motion required to generate gear teeth are pretty complicated.  And the issues associated with gear box reliability are even more complicated.  The parameters of merit are precision and load capability.  But cost is always a factor, and ultimately every system’s performance must be measured within the context of its life expectancy.

One of the most complex parts of the automobile is the transmission, which is a multistage gear reducer that “tunes” the speed range of the engine to the desired speed range of the vehicle at power levels of several hundred horsepower.  What makes this so extraordinary is that the workings are almost entirely automatic.  And the gearbox life expectancy is huge.  I just sold a 15 year old car and it’s transmission system is still working perfectly.

Manufacturing processes associated with gear manufacturing have evolved to help deal with the various demands for performance at lower costs.  The traditional method of gear cutting using machine tools generates accurate parts, but metallurgists found that the grain of the metal cut by machining caused weakening of the gear tooth.  Powder metallurgy had been progressing to the point where it was more cost effective to mold gear profiles in sintered powdered metal and do only finish surfacing with machining processes.  Later improvements in the process include the ability to load higher strength materials where needed in the design to produce higher strength parts at lower cost.

But as load requirements increase, all of the performance issues are magnified.  And unique environmental conditions can play a part as well.  In the current design of horizontal wind turbines, the gear box design is a critical component.  The gear requirement at 2.5 megawatts is certainly a challenge, but adding the need for precision and and durability to survive 25 years of operation make the task incredibly difficult.

There are a couple of subtle aspects to gearbox operation that need to be considered.  One is reversal stress.  How does one calculate reversal stress?  It’s the absolute value of the power, two times the power for simplicity, divided by the time period of the reversal.  This is usually a really big number.  And as the time allowed for the reversal decreases, the number goes up.

It doesn’t matter if the application is a servo motor system on piece of machinery or a gear increaser on a wind turbine.  The situation is the same.  It’s just more expensive when it’s a 30,000 pound reducer that’s 180 feet above the ground on a pole.    But the principles are all the same.

Keeping the machinery running is a tough task regardless of the field.  But monitoring the mechanical systems is key place to start.  Next generation gear boxes will likely include electronics to monitor the loading and condition of the gearbox to prevent catastrophic failures.

The Next Industrial Revolution

The industrial revolution was a period of unprecedented expansion of technology that lead to a huge increase in economic opportunity.  It was a period marked with great inventiveness that transformed the Europe and America.  The power of that inventiveness echoes through today.

Similarly, in recent years, there have been a number of significant breakthroughs that offer great potential for the improvement of many current technologies.  But more subtle transformations are taking place throughout the industrial landscape that offer new opportunities yet to be explored.

In many areas of part production, there are solutions that offer reduced cost per part.  The emergence of new CNC’s that are available at the $10,000 level reduces the amortized cost for producing parts by as much as 500%.  Simply put, it you have to produce 1000 parts on a machine tool, the final cost of the part is significantly impacted by the cost of the machine tool.  A $50,000 machine tool will cost $50 per part across 1000 parts.  A $10,000 machine tool will only cost $10 per part.

This economic shift may make it possible to enter a market with an improved price point for an existing product, or create an opportunity to do something new that wasn’t possible because of cost and volume constraints.

In similar fashion the metals industry has consistently worked to developed processes and technology that allow part cost reductions, and more recently, smaller batch sizes for certain applications.  The smaller batch size has the same effect on cost, it lowers the investment cost for improving old designs or coming up with new ones.

The same trend is in place in the controls arena.  Processor technology that used to cost $20. a few years ago is available now for $2-3 and network versions that permit Internet interface are available for around $5.  This makes it practical to embed intelligence and communications in products even if the application is relatively simple.  The low cost is a compelling value in many products.  And in many arenas there are libraries of application code that already exists that may provide 60% or more of the development code for something you are working on.

Energy is still a bit of a limitation.  We don’t have a “Mr. Fusion” nuclear reactor that runs of kitchen scraps.  But things are looking up in this area with lithium based batteries making great strides in energy density.  And there is substantial improvement on the way.

But the real point here is;  Dust if off and Try it Again.  Take those “back of the napkin” sketches you’ve been tinkering with or thinking about and look at them again from the perspective that there dozens of technology improvements out there that will reduce the cost of the product you were thinking about a couple of years ago.  The change in the economics, as amortized cost, or the cost threshold to get your first batch of parts made, are factors that have a huge impact on the feasibility.

It just may be the time for a breakthrough.  A second industrial revolution.

Solar Power and Economies of Scale

If solar power costs decline to “grid parity” or the same cost as generated electricity costs at the grid, it will take over a significant portion of the utility industry.  That has been the goal for 20 years.  It’s a great idea.  Because eventually homeowners can generate their own electricity, become independent of the utility and reduce their operating costs.

Or so the story goes.

We’ve been trying to reach grid parity for some time.  Without much success.  And not because we aren’t trying.  Billions of dollars of government subsidies, R&D funding and private investment are being poured into the pursuit.

Energy independence!  Both as a Nation and as individuals.  It would be great to be able to say, personally, we don’t have pay any utility bills.

The first great fallacy is that either solar power and wind power can cause energy independence for the US.  This is because the energy we depend on is not electricity, it is Middle East Oil for gasoline.  We are dependent because of our cars and the choice to not make our own gasoline, even though we can at lower cost than importing it.

But on top of that, almost none of the electricity generated in the US uses Oil.  It’s all coal, natural gas, or nuclear.  So the idea that the US will reduce it’s foreign oil imports by generating electricity with solar power or wind power, is completely ridiculous.  There is no connection between the two.

There is a theoretical energy equivalency that can be expressed.  But there is no real connection.  So people who make this claim are intentionally misleading anyone who listens.

How are we doing with respect to the cost of electricity generated by solar power?  It’s been an interesting couple of years.  The industry experienced a brief shortage of raw silicon which kept prices fairly high.  More recently there was a precipitous drop in panel prices.

Opinions vary as to the cause of this drop, but with the massive increase in manufacturing capacity worldwide, I would guess that the price drop is strictly a matter of oversupply.

Economies of Scale will fix the problem according to some.  After all, look how well we’ve done with computers, hard drives and flat screens. Flat screens that were $10,000 to $50,000 a decade ago are now affordable to the point where the CRT has become obsolete.

Since the biggest component cost of the solar panel is silicon wafer, we should expect similar results in the solar market.  The stampede to build more solar panel manufacturing plants resulted in oversupply.

Now the race continues to drive costs down.  Panels that were selling for $3.50/Watt a year ago are down to $2./Watt and prices are expected to continue to fall. And some manufacturers will not be able to keep up with falling prices using older technology.

But are we getting to grid parity?  Is Solar power cheap enough to compete with utility power?  Nope. Because even at today’s bargain pricing, a 225 Watt panel will only produce 900 kilowatt hours in a year at maximum efficiency.  At market cost for electricity, $.05/kW, it’s only $45 worth a year.  And it currently costs about $1125 pay for the panel, installation and balance of system components.  That means it will be around 25 years, the end of the useful life of the system, before it breaks even.  Yes, in California where consumers pay $.23/kW the payback is better, but it’s still very expensive to convert to solar.

We have got to do better than that.  And we will.  The technology is coming along.  But economies of scale by themselves can’t quite get us there.

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