Carried Away

Solar Market Bubble Bursting

Solarbuzz is reporting that in 2008, solar panel installations increased by 110% over 2007, well ahead of even the most aggressive forecasts.  5.9 gigawatts (peak capacity) of panels were installed, 2.4 gigawatts (41%) of which were installed in Spain and 1.86 gigawatts (32%) in Germany.  The US was the third largest market with installations of 0.36 gigawatts (6%).  Retail nominal prices for solar panels were steady and the industry appears to have worked out of  the shortage in 2007 of polysilicon.

Global solar market breakdown from Marketbuzz 2009

In 2008, thin-film solar panel production -- which does not use polysilicon in its manufacturing process -- increased 123% to 0.89 gigawatts (peak capacity).  Many companies are drastically ramping thin-film solar production this year.  First Solar -- the leader in thin-film solar -- now has manufacturing capacity of over 1 gigawatt.  By my count, Applied Materials' thin film customers alone have announced up to 3/4 gigawatt of new capacity for 2009.  Oerlikon's thin film customers are expanding aggressively as well.  Lastly, Sharp is opening a very large format (8.7 square meter glass panel) thin film solar plant at the end of this year. 

It seems evident that demand this year will not match the rapidly increasing supply, which will result in falling prices and a shakeout in the industry.  On Tuesday, Applied Materials announced that a $1.9 billion order from Best Solar in China for thin film solar panel manufacturing equipment was reduced to $250 million.  We can expect similar shocking news from others that they too are reducing the amount of capacity that they are planning to add this year.

Unfortunately, the solar panel demand now is driven by subsidies.  In 2007, Germany added the most solar generation capacity worldwide, even though the country is not blessed with an advantage in photons.  However, German sales have been sustained by very generous subsidies.  It is hoped that subsidies will bridge the industry until the ramp of industrial-scale thin film production is well underway.  With this ramp, some think that the price of solar panels will decline enough in the next several year such that solar generation competes with other electicity sources without subsidies.  It seems possible, but we will have to see how the industry weathers this bubble bursting.

No Substitute for Trial-and-Error

Congratulations to SpaceX on reaching orbit with the Falcon 1 some months ago!

Since then, my elation about the success has passed and a more earthly assessment of the implications has started to take shape.  As long as it continues to launch satellites successfully, SpaceX will start driving down the price of launch overall.  However, the fall in prices may be slower than we hope because SpaceX probably will have more failures.  Perhaps soon.  Perhaps on the next launch of the Falcon 1.  In a more perfect world, we would hope that the failures happen sooner rather than later so that any problems in the design, fabrication, and launch of these rockets can be hammered out.

It has come as something of a revelation to me that trial-and-error cures most ills.  Even bad designs sometimes can be made to fly, given enough trial-and-error.  The trick is to have enough bankroll to survive the process.  You take a look at your bankroll and pick your process such that you don't run out of money doing the repetitions.  The US Government has almost an unlimited bankroll and therefore uses a spectacularly expensive process.  Elon Musk had several hundred million dollars in the bank and picked a focused group of a couple hundred employees.  John Carmack had maybe ten million dollars in the bank and picked a focused group of ten volunteers.  Korolev had his bankroll and process too.

Likewise, even great rockets will have failures in testing.  I think that the Falcon 1 & 9 are beautiful and relatively simple designs.  The company is using the latest in manufacturing technology.  And launch operations are lean and professional.  But even so, the company had three failures before a success.  The Falcon 9 probably will have at least one failure early on.  Hopefully, Musk has a bankroll equal to the task.  It seems likely that he is almost out of ready cash, what with Tesla Motors needing more equity investment than originally planned and Musk's recent divorce announcement.

Lately, I have been following Armadillo Aerospace and feel the most comfortable with its approach to design and testing.  The number of flight reps that Armadillo performs on its hardware is impressive.   Failures don't lead to existential questions for the company, unlike with SpaceX.  Carmack's bankroll appears more than up to the relatively modest task of sustaining development and failure.  The approach is not without its pitfalls, of course.  Some followers or supporters of the company may become impatient.  Carmack may lose interest or -- God forbid -- he may otherwise become unable or unwilling to push the company forward.

At the end of the day, the reward in systems that are sustainable favors Armadillo hugely.  An Armadillo manned orbital system definitely would be cheap enough to serve average people like me.  This is what I keep my eye on.  Further, I wonder if the risk of project failure is equal or lower for Armadillo versus the NASA programs or even SpaceX's programs.  After all, if Carmack runs out of money, at least there are many more people available with the capability to fund the project in the breach.  If Musk runs out of money, only billionaires will be able to help him.  If NASA runs out of money, the project is shut down.

Falcon 1 Flight 3 Anomaly At T plus 2:10

SpaceX's third attempt appears to have had an anomaly at around 2:10 into flight.

SpaceX will post any information to its web site when it becomes available.

SpaceX Plans Third Falcon 1 Launch

SpaceX has announced that it plans to launch its Falcon 1 as early as 2 hours from now -- 7 PM Eastern Time.  You can follow along by watching the webcast on the company site, which will begin at 6:30 PM Eastern.  If the rocket doesn't launch today, the company has the range booked for several more days to try again.

I am confident in SpaceX's ability to complete this mission.  The company appears to be approaching this launch more professionally than the two past missions (and more expensively, but let's leave that aside for the moment).  That said, I am nervous to see it launch, given the history of rocket flight.

The way that we progress in this world is by a number of us working hard on projects and risking embarrassment and failure.  Sometimes the odds are long and the payoff unclear.  No matter the outcome of this launch and even if a successful launch only marginally reduces the costs of getting to space, I feel like SpaceX has contributed a great deal by trying something new in a business that has seen so little innovation for the last few generations.  I have been following the company's progress for over four years on this blog, and I feel some personal satisfaction to see everyone at SpaceX continue to try for the heavens.

So good luck to SpaceX and godspeed Falcon!

SpaceX's Yogurt Shack

The majority owner of the Washington Capitals (NHL), Ted Leonsis, just opened a web video service called Snagfilms that shows full-length documentaries for free with a couple of commercials mixed in.  I watched the entertaining Super Size Me, an experiment where the protagonist eats nothing but McDonald's food for a month.  Three meals a day.  In the movie, it is mentioned that only 6 items on the McDonald's menu are sugar-free.  I can vouch for a 7th menu item that is sugar-free that is not mentioned:  hot tea.  Snagfilm's commercials were the greatest.  Two commercials for candy.  Irony is the greatest comedy.

Speaking of sugar, yesterday and today I took some R&R time from work.  Yesterday, I rode the Mount Vernon Trail, which is about 20 miles each way from my condo in the city.  Because of this, I had some calories to spare, and since this afternoon was rather. . . warm (97 F/humid), I decided to stop by the new yogurt shack a couple blocks over from by place, Mr. Yogato.  Mr. Yogato is on 17th Street next to the cafe that used to be one of the few cybercafe's in the city -- I think it is merely a cafe now.  DCist mentioned that Mr. Yogato was started by a few of the folks at SpaceX's Washington office, so my interest was piqued.  Click on the pics for bigger versions.

Mr. Yogato Yogurt Shop

The inside decor is spare, but they have a nice picture of SpaceX's 2nd launch attempt.  I have seen this perspective a couple of times before, but I wonder how they managed it -- helicopter?

Picture in Picture -- SpaceX Falcon 1 Second Launch Attempt

The yogurt was very good.  They had a mojito flavor that was a little too sweet for my tastes, but the tangy was delicious.  I had raspberries as my topping.

Everybody Likes Yogurt

The shop seemed well frequented for such a new shop.  This was reinforced on my way home when a couple of women in the elevator in my apartment building had cups full of yogurt from the shop.  They said that they had been there several times and that it was "supposed to be better than tangysweet."  You will have to judge for yourself.

I Was Wrong About Oil, At Least In Small Part

Never did I expect that the price of oil would increase to $100+/bbl, but here we are right now at $106.40/bbl for April '08 light crude.  However, I was correct in thinking that the world would soldier on despite the oil price.  The U.S. economy is in or near recession not because of the price of oil, but because of the bursting of the housing bubble.  There are no oil shortages.  There is no crisis.  The market is working just fine.  It would be fine at $150/bbl.  It would be fine at $200/bbl.

The price is forcing work on substitutes for oil.  Within a decade, we could end up using electricity for most of our individual transportation needs.  The technology is mature enough to make the switch and it wouldn't inconvenience anybody except in the rare situation.  Maybe the price of oil would need to be higher in order to force the substitution, given that gasoline and diesel are strong products.  Of course, oil is used for very many other things -- its use permeates our economy -- but I am sure that there are substitutes in most of those markets as well.

The Value of a Human Life -- DARPA Urban Grand Challenge

Congratulations to Carnegie Mellon for winning the 2007 DARPA Urban Grand Challenge, held last month at an abandoned military base in California.  Carnegie Mellon 's vehicle "Boss" was able to traverse a 60-mile urban course at 14 miles per hour without a single traffic violation and without human intervention.  The grand prize was $2 million.  The second-place finisher was Stanford's "Junior."  Motor Trend has a good blog post about the event.

Carnegie Mellon's "Boss" SUV, the winner of the 2007 DARPA Urban Grand Challenge (Motor Trend)

Here's the reason why this is cool and important stuff.  According to the National Highway Traffic Safety Administration, in 2006, there were 42,642 people killed and 2,575,000 injured (1.5 MB PDF) in traffic accidents in the United States, incurring an economic cost of about $230 billion, or about 7.6 cents each mile traveled (2000 estimate).  Over the past couple of years, it has become clear that these traffic accidents are almost entirely avoidable by cars driving themselves.

Bezos Or Page Running SpaceX; 60-Foot Ceilings

Inc.com named Elon Musk its Entrepreneur of the Year.  Its profile of Musk, written by Max Chafkin, seems to hit the salient points, including some of Musk's thoughts about his prior ventures and the qualities needed by a SpaceX CEO.  Regarding who could run SpaceX besides himself, Musk says

This may be presumptuous, but I have not met anyone who could do this. . .  Well, wait, that's not true. Jeff Bezos could do this. Larry Page could do this. Bill Gates could do this. But there's just a really small list of people with the sufficient technical and business ability to do this job.

It's nice to know that two out of the three people who he mentions are indeed involved in the new guard of the space business, in one way or another.

However, I chuckled when Chafkin wrote of Musk's marveling at the 60-foot ceilings at the new SpaceX headquarters in Hawthorne:  "There's something strange and touching about a man this intent on reaching the heavens who can pause to marvel at a really high ceiling."  I daresay that Musk had Mars in mind rather than merely a neat high ceiling.  The first stage of the Saturn V has a diameter of 33 feet.  Some of the kerosene-fueled Nova "Mars Rocket" designs had first-stage diameters of about 70 feet.  I question the advisability of going with jumbo rockets, but if you are going jumbo, then you need very high ceilings.  The Falcon 9 -- a large rocket -- has a diameter of 12 feet and was bumping up against height constraints at the old factory.

SpaceX's Falcon 9 First Stage in Production

I would be interested in knowing the dimensions of SpaceX's new hangar that's under construction at Cape Canaveral.  It might give us some clues about the maximum size of the rockets that Musk is contemplating.

Why Would RpK Want to Continue COTS?

Rocketplane Kistler (RpK) has written a letter to NASA seeking to overturn the agency's decision to terminate RpK's COTS Space Act Agreement.  NASAspaceflight.com has some interesting excerpts.  In the letter, RpK has a delicate task:  (1) It must state that all of RpK's problems are due to NASA actions; and (2) it must state why NASA should reconsider its decision even though RpK is saying such bad things about the agency.  I don't blame RpK for making its case robustly, but I wonder why RpK would wish to continue COTS, especially if what the letter says about NASA is true.  COTS contemplates RpK putting up most of the money -- 70% -- for the program, after all.

As stated previously, I have a minimum of high regard for the way that NASA has done businesses in the past.  It is not a reliable partner.  Its actions are at best capricious.  NASA is the type of customer where you don't know for sure whether the checks will clear.  Given these attributes, why would any reasonable businessperson put NASA on a critical path?  Fiduciary responsibilities to shareholders dictate otherwise, even if your stomach or conscience could take it.

It appears to me that NASA was realistic about its attributes when it structured the COTS program.  The program only makes sense for a business if NASA is perceived as an expendable junior partner -- i.e.,  if the business were going to do a program like COTS no matter NASA's involvement.  This structure also protects the American taxpayers against a bait-and-switch from a commercial program to a traditional government cost-plus program.  Apparently, RpK's business plan conceived of NASA's business as central to its plan.

Once RpK's Space Act Agreement is terminated, we could have another round of suitors for the COTS money.  But none of these other suitors appear to be designing and building hardware no matter NASA's actions.  They all appear to be waiting for NASA to be the senior partner.  In this respect, probably they are in the same position as RpK.

I note that there are other programs out there that don't appear to be angling for COTS money -- Armadillo Aerospace and Blue Origin are two examples.  Lastly, of course there is SpaceX, which is receiving COTS money, but had its Falcon 9 rocket and Dragon capsule in development well before COTS.  SpaceX appears to have approached COTS as an opportunity to do some marketing with NASA for space station-related and non-space station-related business.

Musk Confirms Minimum Scale of SpaceX

On July 26, Elon Musk was the guest for The Space Show, with Dr. David Livingston.  Clark Lindsey has a good summary of the key points made, so I will not list my own notes here.

One item that I think is especially noteworthy is that Musk confirmed my suspicions that the scale of operations contemplated by SpaceX in the COTS competition is well above the 300 to 400-employee "small company" range (arbitrarily defined by yours truly).  In the interview, Musk mentioned that SpaceX likely will be at 500+ employees next year -- about one-fourth the size of the Delta IV and Atlas V operations.

In my August 2006 post, I mentioned that SpaceX will put in upwards of $200 million of its own skin in the COTS venture versus $274 million for NASA.  Subsequently-released information appears to suggest that SpaceX's investment is much larger -- perhaps in the $400 million to $600 million range.  Certainly, the COTS business, as currently imagined by Musk and NASA, requires very substantial financial wherewithal and bureaucratic scaffolding.  I wonder where SpaceX's head count will top out?

To be honest, I don't know why the t/Spaces of the world are so eager to sign up for similar deals with NASA, should RpK fall out of the COTS business.  COTS doesn't seem to make much sense as a primary/sole customer justifying such a large commitment.  Perhaps this is part of the reason why RpK is having hiccups pitching its business case to investors.  To be sure, RpK is extremely sensitive when NASA fine-tunes the timing of its COTS resupply manifests, as if such fine timing will make or break the business case for the company.

This brings us to the hypothetical of what should be done by NASA if SpaceX or RpK exits COTS.  Should it:  (1) Solicit bids for the unused development money; (2) give the unused  development money to the surviving COTS company in order to accelerate development on the manned option; or (3) use the funds for other development?  I haven't settled on an answer to this questions, but my conspiracy theory has been that Griffin and his team set up COTS such that it would be difficult for anybody other than a company with a business case remarkably like SpaceX's to complete the regimen successfully.

As an aside, SpaceX's new Hawthorne facility appears to consist of 765,500 square feet of space rather than the half-million square feet quoted by the company (building 3-55 itself appears to be a half-million square feet; the other buildings in the East development appear to make up the remainder).  Both figures are pretty extreme, but the higher figure is hard to imagine, as I sit in my 400 square foot studio condo here in the city. :-)