The holding company for four southeastern utilities soon could become the first power company to own controlling interest in a factory making cells to convert sunlight to electricity.
The cells could be mounted on individual buildings to provide them with power directly or erected in large groups to supply additional power to utilities. Such uses of solar cells on a large scale long have been a goal of advocates of renewable energy. Outside of two California utilities' relatively small demonstration systems, this goal hasn't been met.
The prices of solar cells have dropped from hundreds of dollars per watt of capacity in the 1960s to $5 to $8 per watt today. Once prices drop to $1 or $2 per watt -- expected within the next decade -- solar power could be economical for individuals, according to industry observers.
The Southern Company, parent firm for Alabama Power, Georgia Power, Mississippi Power and Gulf Power, has asked the Securities and Exchange Commission for permission to create a subsidiary to make photovoltaic modules, as the solar cells are called, from amorphous, or noncrystalline, silicon using technology developed by Chronar Corp. of Princeton, N.J., a one-time watch and digital display company. Public utility holding companies need SEC permission to diversify into certain activities.
The first step would be a modest-sized facility in Birmingham, Ala., turning out enough modules in a year to generate a cumulative megawatt of power under full sunlight, a measurement known as a peak megawatt. That is enough energy to run about 250 average-sized homes.
Southern then would have the option of buying a facility capable of producing panels generating a total of 200 peak megawatts -- not coincidentally the amount of new capacity Alabama Power will need to meet summer peaking demands in the year 2000, according to Herbert M. Boyd, the utility's manager of forecasting.
By contrast, a full-scale nuclear plant produces about 1,000 megawatts during all hours of full operation, not just at mid-day; however, Southern believes the solar panels could prove more economical than building one of these large conventional power plants. Still, the possible second factory would be huge by photovoltaic standards. Various surveys put 1984 worldwide solar cell production at 25 peak megawatts, of which 10 to 12 peak megawatts is estimated for U.S. companies.
Construction of the first plant could be completed as early as next year. Chronar, which would own 15 percent of the plant, would be obliged to purchase whatever panels Southern does not want during the first four years. After that, Southern would take responsibility for marketing.
The first plant will use Chronar's current, and less economical, batch-production technology for solar cells made from thin-film amorphous silicon sprayed onto glass. This silicon is cheaper, but produces less efficient panels, than those used in the traditional single-crystal or polycrystalline silicon cells.
Similar amorphous silicon material, but on different mountings, is used to varying extents by several other solar companies, notably Arco Solar Inc. of Chatsworth, Calif.; the Sovonics joint venture of Standard Oil Co. (Ohio) and Energy Conversion Devices of Troy, Mich.; and Solarex Corp. of Rockville.
Before Southern commits to anything as large as a 200-megawatt-scale factory, Chronar must develop continuous-flow production methods, an undertaking likely to require several years. Such a sizable operation could take the form of 20 production lines, either at a single location or spread across the service districts of the four utilities.
While he would not predict what the price of electricity will be at any year in the future, Alabama Power's Boyd stressed that increased regulation of utilities means "the cost of power is going to go up." Even the one-peak-megawatt-plant production line will not be a commercial venture initially, admitted David Stear, supervisor of media relations with Southern. The panels Chronar makes now are "not commercially feasible for our customers," whose electricity is presently billed to retail customers at an average rate of 6.5 cents per kilowatt hour.
Southern's application asks for SEC permission to sell the photovoltaic modules only within the utilities' service districts. Broader marketing would require additional government permits. The agreement with Chronar also would let the holding company purchase the panels at 85 percent of the solar firm's list price.
Although there are no definite plans, the utilities could field-test the first modules on individual houses. Alabama Power already has signed an agreement with Chronar to buy 100 kilowatts worth of modules from another of Chronar's production facilities before the new plant goes online.
The solar company operates one-megawatt factories in Port Jervis, N.Y., and Bridgend, Wales, U.K., and has contracts for similar plants in Lens, France, and Titograd, Yugoslavia, along with the smaller experimental line at its headquarters.
The subsidiary, capitalized by Southern at $125 million, also is envisioned as a vehicle for projects involving cogeneration, alternative energy and fiber optics. Southern is putting up $6.1 million for the photovoltaic plant, and Chronar is supplying engineering and technical expertise valued at $1.1 million. Southern will own 85 percent of the plant.
Under a separate arrangement, Chronar will sell 70 percent of its equity in the plant to AFG Industries Inc., a Kingsport, Tenn., manufacturer of float glass used by Chronar to mount the amorphous silicon. Until recently, Chronar had been considering building a similar plant in Tennessee with AFG and another one directly with Alabama Power. Both proposals were dropped in favor of the newly announced regional plant.