Ion Yadigaroglu, a partner at Capricorn Investment Group and an early investor in Tesla and SpaceX, recently led a $17.5 million Series B financing round in Erthos because he believes the company can lower large-scale solar installation costs by 20 percent with its new structural approach.
Erthos’ method of building solar plants does away entirely with trackers, racking and structural steel. Instead, it installs the photovoltaic solar modules directly on the ground. Canary Media covered the startup when it unstealthed last year.
It’s a radical innovation that challenges a basic architectural tenet of utility-scale solar — and the $3 billion business of trackers and racking. By eliminating what it sees as “a tremendous amount of unnecessary materials and risks,” Erthos claims it can build a solar power plant in half the time on one-third of the land, all while using 70 percent less cable and trenching.
“I can say with a straight face that Erthos may be the single largest contributor to decarbonization that we’re involved with over the next decade,” said Yadigaroglu.
20 percent cost improvement on a commodity product
“There are very few opportunities to make 20 percent improvements in the cost-effectiveness of solar,” Yadigaroglu added.
The CEO of Erthos, Jim Tyler, agrees: “We’ve done something that’s very difficult to do. We’ve reduced the cost of a commodity — a 20 percent change is just stunning — when companies are trying to make 1 percent or half a percent improvements.”
Yadigaroglu continued: “Erthos is making solar more competitive — and it’s doing so in a very boring way. It doesn’t require reindustrializing or taking five or 10 years to develop a product and then building factories around it. It’s simply rearranging parts of the industrial supply system, and then putting solar on the ground differently than the standard practice.”
Daniel Flanigan, chief marketing and product officer at Erthos, said the company calculated the threshold at which the performance gains of tracking are negated by the low price of solar modules.“You can simply buy more solar modules for the loss of energy you endure for not having a tracker,” he told Canary Media last year. “We cross that threshold at module costs of 38 cents per watt.” Despite recent price increases, bifacial modules are still below that threshold and are forecast to be well below it when prices stabilize in 2023 or 2024.
“It’s simpler to install than any system out there” because it eliminates geotechnical concerns, according to Flanigan.
Erthos provides a development platform, acts as the solar architect for the developer and project engineer, and provides operations and maintenance services. The company partners with Directional Services, an installer of utility-scale solar, and has licensing agreements with solar module manufacturers ET Solar, ZNShine Solar and HT-SAAE.
Ensuring that solar costs keep dropping
The U.S. utility-scale solar market has been on a multiyear hot streak in growth, hitting 50 gigawatts of cumulative operating utility solar in 2020 and on track to reach 100 gigawatts by the end of 2023, according to research firm Wood Mackenzie.
The 82 percent reduction in solar cost over the last decade stemmed from economies of scale, better technology and supply-chain improvements, according to the International Renewable Energy Agency. But it would be very difficult to keep costs declining at that pace, at least with the current cost stack.
U.S. costs are $0.83/watt for fixed-tilt utility-scale PV systems and $0.89/watt for one-axis-tracking utility-scale PV systems, per the National Renewable Energy Laboratory’s photovoltaic cost benchmark report from Q1 2021 (all watt figures are direct current).
Racking costs accounted for about $0.12/watt for a 100-megawatt system, according to the report. That’s the slice of the pie that Erthos is looking to eliminate — part of the lightest blue section in the chart below from NREL.
But is it too good to be true?
When confronted with Erthos’ novel approach, solar enthusiasts and potential customers often have a lot of questions. Back when Canary first reported on Erthos, our astute commenters posed some questions of their own. Indeed, Erthos fields the same queries with such frequency and uniformity that employees have come to refer to them as “the 30 questions.” Here are a few of their answers.
Can you inspect and repair the panels in the middle of an array?
“We can definitely service the panels. Also, that is our contractual responsibility under our long-term [operations, maintenance and cleaning] service.”
How do Erthos installations hold up to wind?
“Our current wind report from CPP provides a rating of 151 miles per hour. We are undergoing further study where we believe we will reach 170 miles per hour. This allows for installation in hurricane zones.”
What about dirt accumulating on the panels?
“Soiling is not a con. It is a pro, because of nightly robotic cleaning. Also, because we do this, we are relatively immune to hard-to-predict soiling events such as fire ash from wildfires and windstorms.”
How do the installations perform in the rain and snow?
“Our hydrology report proves that an Erthos plant is almost the same as native soils with respect to accumulated water depth and velocity in rainstorms. All of our designs include professional civil design that includes water runoff management and containment basins as per the jurisdiction’s application of building code and other local requirements.”
What about flooding?
“The glass/glass modules and the connectors we specify are all rated for submersion, so flooding is not a catastrophic event in case it does occur.”
What about damage to or from wildlife?
“Utility-scale systems are fenced and prevent animals from entering — both for Erthos and trackers.”
The company currently uses one side of a dual-glass bifacial module, but it is looking to transition to dual-glass monofacial as that technology goes down the cost curve. Incidentally, the bifacial panels are exempted from the tariffs imposed on most imported solar equipment by President Trump, which were recently extended by the Biden administration. The only difference between an “Erthos-compatible” solar module and a standard module is the custom mounting hole pattern.
Not enough VC love for solar hardware
“Engineers have a hard time with this,” Yadigaroglu told Canary. “But when it becomes possible to remove something from an engineering equation, it’s almost always the right decision to actually go all in and remove it.”
“It’s a little secret in our industry,” said Erthos CEO Tyler. “The module price got to a point where the steel didn’t make sense anymore. But the developers, the engineers, the [independent power producers and] the factories are so invested in that steel supply chain and the paradigm of lifting everything off the ground and tracking and making as much energy out of that plant as you can. But the reality is that what we’re all after is reducing the cost of electricity.”
Solar software startups are showered in venture capital funding, but solar hardware companies aren’t getting a lot of VC love these days. That’s owing to memories of bubbles gone by, China’s domination of the commodity module and electronics industry, and general faintheartedness. So it’s notable to see a discerning cleantech investor making a bet on new solar hardware.
Ignoring the NREL U.S. cost scenarios depicted in the chart above, enthusiastic hardware investor Yadigaroglu cited global price figures as he sketched out Erthos’ near-term outlook: “We’re going to do 120 gigawatts this year at, on average, 86 cents [per watt]. How do we get to 200 gigawatts next year at 72 cents?”
Erthos rakes in $17M to install solar panels directly on the ground
The startup says its down-to-earth approach can cut the cost of solar farms by 20%.
4th of March 2022