Clean & Sustainable Technologies Group

Australian solar innovation: losing our place in the

June 2009 griffithhack.com.au Solar innovation report The Opportunity

As one of the world’s sunniest places, should be well placed to both use and drive solar technology innovation. Unfortunately, our research shows this isn’t the case.

By Mike Lloyd and Justin Blows

Solar power potential Australian solar innovation It is believed Australia could supply Australia is falling behind a number of other countries in its use of its electricity with the sunlight . This study uses patent filing data to determine if this falling on a square area about 1 under-utilisation is due to a lack of local solar innovation. 50 kilometres by 50 kilometres . Many Australian rural communities Griffith Hack’s report authors, Mike Lloyd, IP Portfolio Management are situated long distances from Consultant, and Justin Blows, Patent Attorney, found that Australian major power generation plants, solar innovation has been flat over the last five years, while the rest of and locally based generators, such the world has been surging ahead. as solar power plants, are naturally Australia has produced some world-leading solar innovators, and suited to these areas. Solar power some of these innovators remain in Australia. However, Australia has a significant potential to reduce the consumption of fossil fuels, cannot afford to rest on its laurels, otherwise it will risk falling behind which is thought to be a major both in the use of as a power and heat source, and contributor to climate change. also in the worldwide export of solar technologies. Solar power production is The recent announcement of significant federal and state growing rapidly around the world. government funding is encouraging, and we look forward to seeing Photovoltaic power production is this funding reflected in new innovations and patent filing data. expected to grow 40% in 20092, building on growth figures estimated in 2008 to be as high as 110%3. Germany, Japan, the US and Spain are the major contributors

Contents – The opportunity...... 2 Our solar power potential – The method ...... 5 Understanding this study – The results...... 6 Solar innovation trends – The lessons...... 10 Increasing innovation

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Australia’s weak performance in the utilisation of solar power is a poor reflection of the quality of its innovators

to this growth, with solar power Australia’s performance partnered with the state of already providing around Australia’s weak performance to build the world’s 2.2% of Germany’s and 0.5% of in the utilisation of solar power largest photovoltaic power Japan’s electricity production is a poor reflection of the quality plant near . capacity4. The comparable figure of its innovators, who include for Australia is 0.15%5, which is some of the world’s early pioneers Patents and innovation barely ahead of the global estimate in this field. For example, Patent applications are filed by of around 0.12% of total global Dr Zhengrong Shi, formally from inventors or their employers electricity capacity. the University of New South to claim ownership of their A similar picture is seen with Wales, became the world’s first innovations. Ownership in turn solar hot water. By 2006, there solar billionaire after founding provides the underpinning was an estimated 1.3GWth the Nasdaq-listed Suntech. Also, for subsequent commercial (gigawatt-thermal) of installed Dr David Mills, formerly from the innovation. For this reason, solar hot water capacity in University of Sydney, developed patents are a good predictor of Australia6, which is equivalent to and licensed solar water heater commercial innovation. 2.8% of our electricity capacity, technology that is now used by 60% As examples of this, the and ahead of the equivalent of the world’s solar collectors7. Dr Australian patent database shows worldwide figure of around 2.4%. Mills later founded the Californian the aforementioned Dr Shi and However, this compares poorly company Ausra, which is now Dr Mills are inventors of 12 and with Israel, which has around building a 180MW (megawatt) solar 20 Australian patents or patent three times Australia’s installed thermal power plant in California. applications respectively, while capacity of solar hot water with More recently, Victorian Solar Systems has filed 20 patent about one-third of our population. company Solar Systems has applications since 1993.

Waking up to Australia’s potential “Australia appears to be waking up to its enormous potential in both solar production and solar technology commercialisation. The world’s highest capacity photovoltaic power plant is being built near Mildura, Victoria, using Australian technology, and the federal government has allocated significant funding for other solar power plants. However, recent patent data shows Australian solar innovators are falling behind some other countries. I hope this report encourages Australian innovators, and their supporters, to improve our competitive position.” – Mike Lloyd.

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Strong local innovation performance is a sign of a healthy local skills base

Innovation performance investment in research, In this study, we used recent development, commercialisation, patent data to investigate current deployment and diffusion of the solar innovation in Australia, and technology within the market. to help understand whether the • Increased likelihood of attracting recent underperformance in the funding for the technology through take up of solar power in Australia equity, loan or government grant. is because of a corresponding • Clarity and legal certainty, which underperformance in innovation. promotes technology transfer While rich countries such as through licensing, joint ventures Australia are always free to benefit and sale of the technology. from imported technologies, a • Leverage when engaging other strong local innovation performance commercial parties about an Market dominance is a sign of a healthy local skills base alleged infringement. “Economists believe a mass and associated economic benefits. • Leverage during the negotiation exploitation of clean and of technology transfer and sale. sustainable technologies, The benefits of patenting • Increased reputation and like solar energy technology, The benefits of securing patents are brand value. has the potential to create also significant for individuals and • Confirmation that commercial wealth on the same scale businesses. These benefits include: technology is being developed, as the introduction of the • A claim on ownership of the and not just research publications. railways, electricity, cars, technology it covers, promoting • Proof of publication. and information technology. Some are realising the References opportunity and are 1 Advanced Solar-Thermal: Utility-scale renewable power for Australia, Worley Parsons aggressively protecting new 2008, www.worleyparsons.com/InvestorRelations/ASX/Pages/AdvancedSolar- technology. For example, ThermalPresentation.aspx Toyota has crystallised its 2 Global solar capacity forecast to add 5.5 GW in 09, Reuters UK, 6 May 2009, http://uk.reuters.com/article/oilRpt/idUKL696778420090506?pageNumber=2&virtu early mover advantage in alBrandChannel=0&sp=true hybrid vehicle technology, 3 Photovoltaic global solar grew 110 percent in ‘08, Reuters UK, 17 March 2009, giving it overwhelming www.reuters.com/article/GCA-BusinessofGreen/idUSTRE52F65S20090317 4 Renewables 2007 Global Status Report, Table R4, www.ren21.net/pdf/RE2007_ market dominance – which Global_Status_Report.pdf it is now executing. New 5 See Tables 16 and 9 and in 2009. Abare, and substantial government www.abareconomics.com/interactive/09_auEnergy 6 See Table R5 in Renewables 2007 Global Status Report backing gives the Australian 7 Solar skills go offshore, but innovation offers hope, by Victor Bivell, solar industry the potential to The Australian, 15 November 2008, www.theaustralian.news.com.au/business/ achieve similar dominance, story/0,,24651512-36418,00.html 8 Unpublished analysis of Australian patent filing data, based on the UK’s provided that innovation is DTI/OST patent classification scheme carefully and thoughtfully 9 China to offer subsidies to boost photovoltaic market, Reuters, 21 May 2009, protected.” – Justin Blows. www.guardian.co.uk/business/feedarticle/8518779

4 griffithhack.com.au cleanip.com.au The Method

How this study was produced Table 1: Categorisation of solar patents found in this study Griffith Hack patent search specialists developed a broad Photovoltaic cells All technologies directly related to search query for patents and photovoltaic solar cells patent applications related to devices capturing solar energy Sub categories • Photovoltaic (PV) modules (how PV cells and the application of captured are assembled and internally connected) solar energy. • Conventional PV cells The analysis was limited to • Dye sensitised PV cells Australian patents registered • Thin film PV cells between 2003 and 2008 to • Silicon thin film PV cells emphasise recent innovations. • Organic/polymer PV cells The patent data was obtained • Nano-crystalline PV cells from the public electronic • Copper indium selenide PV cells database of Australian patents Solar infrastructure How photovoltaic cells or solar thermal – 656 patents or patent systems are mounted or managed, including applications were found. concentration of solar energy The patent was assigned the Sub categories date it was registered with the • Solar concentration Australian patent office, which • Solar tracking in the case of international PCT • mounting (Patent Cooperation Treaty) • Solar power control (how solar electrical applications was taken to be energy was converted and controlled) the national phase entry date. • Combined solar heat and power Provisional patent applications • Solar panel cooling were not included in this data. Solar thermal Technologies that use solar heat as a form The term ‘patent’ is used in this of energy, either to convert this heat to report for both granted patents electricity, or for other industrial purposes and patent applications. Sub categories • Solar thermal heat absorption (how solar What is solar technology? heat is absorbed by the energy converter) Solar technology encompasses •  conversion (how solar a wide range of technologies, heat is converted into electricity or other including the conversion of solar useful applications) energy into power or heat, the various technologies needed to Solar applications Innovations concerned with the application of solar energy to specific applications, such as support this conversion, and solar power refrigerators how the heat or power is used. The patents have been grouped Solar hot air Direct use of solar energy to create hot air or according to the technological and water water, mainly for domestic purposes categories detailed in Table 1.

griffithhack.com.au 5 Solar innovation report The Results

Solar innovation trends Given the strong increase in US industry. Table 2 shows that The number of Australian solar originating applications, the US 19% of solar patents were filed by patents registered doubled from is likely to be the source of most Australian applicants in 2008, which 67 to 135 patents between 2003 Australian patents in the future. compares well to the 13% of patents to 2008 (Graph 1). However, the filed by Australian applicants across increase in patents is entirely due to How Australia fared all technology areas. overseas applicants. We can use the relative proportion Other areas of national interest, The overall trend in the number of Australian originating patents however, achieve a greater of Australian sourced patents was registered as an indication of the fraction of domestic filings. For flat. Consequently, the proportion relative strength of Australia’s example, 31% of Australian civil of Australian solar patents filed by Australian patent applicants fell from 36% in 2003 to 19% in 2008. The majority of patents were Graph 1: Australian solar patents filed 2003-2008 related to solar cells (Graph 2), closely followed by solar 160 infrastructure. Graph 2 also shows 140 that solar infrastructure was the 120 most popular area for Australian 100 Australia solar patents, followed by solar hot 80 Other countries air and water (mostly water) and 60 then photovoltaic cells. 40 In comparison, the rest of the 20 world predominately filed patents 0 in the area of solar cells, followed 2003 2004 2005 2006 2007 2008 by solar infrastructure.

Overseas patents Between 2003 and 2008, the number of Australian solar patents Graph 2: Types of Australian solar patents 2003-2008 filed by non-Australian applicants more than doubled. The number Solar cells of solar patents registered by US applicants quadrupled, and Solar infrastructure the number of patents filed by Solar thermal German applicants tripled, if from Australian applicants Solar application a low base (Table 2). The number Overseas applicants of patents filed by Japanese Solar hot air and water applicants fell, however, reducing 0 100 200 300 their annual share from 27% in 2003 to 10% in 2008.

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Australia is not innovating sufficiently to capitalise on its abundant solar resources

engineering and mining patents Table 2: Leading countries of origin for Australian solar patents and 30% of agricultural patents were registered by Australians % change 2003 2008 2003-2008 during the same period. 2003-2008 These figures demonstrate what 24 (36% of all Australia 25 (19%) 150 (24%) +4% Australian innovators can achieve patents) when backed by large reserves of natural resources, such as minerals All overseas 43 110 485 +155% and land. In this context, it appears that Australia is not innovating Key overseas countries sufficiently to capitalise on its abundant solar resources. US 10 (15%) 44 (33%) 147 (23%) +340% On the other hand, the 19% proportion of Australian solar patents filed is ahead of the Japan 18 (27%) 14 (10%) 121 (19%) -20% equivalent figures for the related fields of electrical engineering and Germany 4 (6%) 13 (10%) 55 (9%) +220% electrical devices (10%), optics (10%) and semiconductors (5%)8. Total patents – 67 135 635 +100% We expect there will be large (All countries) numbers of Australian solar patents filed in the next decade. For example, Toyota filed more than 800 patent families between 2003 and 2008 to protect its hybrid Graph 3: Types of Australian photovoltaic cell patents 2003-2008 engine technologies. When the global solar industry matures to the Photovoltaic modules point at which the hybrid vehicle Dye sensitised solar cells industry is now, the current 20 or 30 Australian original solar patents Thin film solar cells registered per year may not have Crystalline silicon solar cells any significant commercial impact. Silicon thin films

Solar photovoltaic patents Organic/polymer solar cells The most popular area for Australian applicants Overseas applicants photovoltaic cell patents was Nano-crystalline solar cells related to the design of the Copper indium selenide solar cells photovoltaic modules (Graph 3). Radiation power cells Dye sensitised and other thin film photovoltaic cells were also popular 0 25 50 75 100 areas. Australian applicants

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A truly significant technology is likely to be protected by a number of different patents

appeared to file a low proportion of innovations relating to solar It should be noted that many these patents, except in the area of tracking, with many of these of the technologies covered by crystalline silicon solar cells. patents disclosing elements this group potentially cover both related to the concentration of photovoltaic cell and solar thermal Solar infrastructure patents solar energy. technologies, which is why they are Patents related to the concentration Australian applicants filed a in separate groups. of sunlight dominated this category reasonable proportion of the (Graph 4). There were also many patents in all sub-categories. Solar thermal patents About two-thirds of solar thermal patents were related to heat Graph 4: Australian solar infrastructure patents registered by absorption technologies, such sub category 2003-2008 as fluid-based heat exchangers and the selection of ceramic materials. Australian applicants Solar concentration filed a greater proportion of solar Solar tracking thermal conversion patents, which refer to how heat is converted into Solar panel mounting useful energy (Graph 5). Solar power control Solar combination Australian applicants Solar hot air and water patents heat and power Overseas applicants Solar hot water patents greatly Solar panel cooling outnumbered solar hot air patents 0 20 40 60 80 100 (Graph 5), with the majority filed by Australian innovators. The data suggests that Australian companies are competitive in solar hot water, at least within Australia. Graph 5: Australian solar thermal and solar hot air and water patents registered by sub category 2003-2008 Who filed these patents? The leading patent applicant Australian applicants was BP, followed by Japanese Overseas applicants companies Canon and Fujikura

Solar thermal heat (Graph 6). However, Australia’s absorption Solar Systems and the University Solar thermal energy conversion of are both in the top 10. Solar hot water The top Australian enterprises include Solar Systems (with Solar hot air 11 applications), the University of 0 5 10 15 20 25 30 35 40 New South Wales (seven), Rheem (six), the Australian National

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University (six), the University of Sydney (five), Dyesol (four), and Graph 6: Leading applicants for Australian solar patents 2003-2008 Solar Heat and Power (four). It should be noted that the 150 Australian sourced solar patents we BP identified came from 80 different Canon applicants. A truly significant new Fujikura (Japan) technology is likely to be protected Solar Systems (Australia) by a number of different patents. An average of only 1.9 patents per Princeton University applicant suggests the majority General Electric of the Australian solar patent Nippon Kayaku applicants may struggle to make a Energy Research Centre major commercial impact. of the Netherlands UniRac (US) How the states performed Mitsubishi New South Wales is leading University of New South Wales Australia in terms of solar Sony innovation, filing a little less than half of the Australian patents 0 2 4 6 8 1012 14 16 18 20 filed (Graph 7). These patents are being filed by a range of leading applicants, including the University of New South Wales, Rheem Australia, the University of Sydney, Solar Heat and Power, Graph 7: Distribution of Australian sourced solar patents, by the applicant’s Dyesol and . home state or territory Victoria and each filed a little less than New South Wales (43%) one-quarter of the remaining Victoria (24%) patents. Leading Victorian applicants were Solar Systems Queensland (22%) and Universal Biosensors, while ACT (5%) Solar Power Limited was the Western Australia (3%) leading Queensland applicant. Tasmania (1%) The low numbers of patents filed by Western Australian and (<1%) South Australian applicants is Northern Territory (<1%) perhaps surprising, considering 0 10 20 30 40 50 60 70 their hot climates and established technical and scientific resources.

griffithhack.com.au 9 Solar innovation report The Lessons

Economic potential of solar University of New South Wales, the We have seen this complementary The overseas companies founded Australian National University and technology effect in Australia’s by Dr Shi and Dr Mills, and the the CSIRO, this may not be enough mining industry, which built on listed Australian solar related to achieve the full potential of solar Australia’s mineral reserves to companies Dyesol, CBD Energy power for Australia. create a world leading industry and Skydome Holdings, show the This produces two major risks in international mine ownership economic potential of Australian for Australia: and related services. There is solar innovation. There is also 1. Australia starts to lose the little reason why Australia could significant export potential, with critical mass of know-how not repeat this achievement with China recently announcing plans needed to understand and apply solar power generation, especially to spend more than 3 trillion yuan solar innovations, whether considering that production of ($AUD560 billion) on renewable these innovations are generated solar power technology has a high energy by 20209. in Australia or elsewhere. Solar added value, and is therefore at However, patent filing data technologies can be complex, lower risk of being transferred to suggests Australia’s solar and economies often need local low labour cost countries. innovation capacity has been expertise to properly benefit static over the last five years. from technology advances. Strengths and opportunities Meanwhile, solar innovation has 2. Australia has a reduced capacity Australian patent applicants greatly increased in the rest of to export solar technologies. were over-represented compared the world. The ownership of key innovations to the rest of the world in solar infrastructure patents, while under-represented in photovoltaic patents. It may be A larger number of new that photovoltaic technologies are starting to mature, and the solar patents being filed by sophisticated manufacturing techniques needed to produce Australians should lead to a solar cells at commercial volumes are more likely to reside in stronger local solar industry overseas countries with significant electronics industries. Many of the technologies claimed by the solar infrastructure patents Australia has produced two of the by Australian companies or fall within the realm of mechanical world’s leading solar innovators, but individuals is more likely to engineering, and Australia is well these innovators have since moved lead to the supply of these placed to compete in this area. to other countries. And while innovations or complementary Australia still retains some strong technologies by Australian Recent developments local solar innovation capacity, businesses, leading to growth in Recent Australian federal such as that of Solar Systems and green collar jobs and associated government announcements may the scientific capabilities of the tax revenues. help both solar power production

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and innovation in Australia. These Australia’s solar innovation include the Australian federal budget allocation of around $AUD1.4 billion to build flagship capacity has been static solar plants, $AUD100 million for research and development, to be over the last five years managed by the Australian Solar Institute, and $AUD465 million to support the development, commercialisation and deployment innovators, whether in Australia own, which both defends your of renewable technologies. or elsewhere, may achieve such position and can be used against There have also been some recent a strong patent position that your competitors. commercial announcements, competition is significantly For this reason, it is essential such as the 154MW Solar Systems reduced. It would be great if an that Australian solar innovators plant near Mildura in Victoria, Australian patent owner was to continue to safeguard their hybrid solar/diesel power plants achieve this position, but might commercial positions with strong in the Pilbara regions in Western be problematic if the owner was patent portfolios. Additionally, Australia, and a 30MWe (megawatt based outside of Australia. the funding partners for these equivalent) solar thermal system A common defence against this innovators need to ensure that to preheat boiler water at Liddell sort of situation is to build up a their interests are also secured by power station in New South Wales. strong patent position of your patent protection.

How to improve innovation Need to know more? Innovation, to some extent, is a probability exercise – the more Griffith Hack is pleased to discuss the details of this study and new innovations are tried, the other exciting work it is doing to promote the benefits of clean greater the likelihood that one and sustainable technology IP. or more of these innovations To learn more about this study, please contact Mike Lloyd, will prove a large commercial Griffith Hack’s IP Portfolio Management Consultant, on success. Not all patents will lead +61 3 9243 8315 or [email protected] to commercial successes and the range of complementary benefits, To use patent data to determine technology trends in your but over time some should. industry, please contact George Mokdsi, Griffith Hack’s In general, a larger number of Information Services Manager, on +61 2 9925 5975 or new solar patents being filed by [email protected] Australians should lead to a stronger To subscribe to future publications related to clean technologies, solar industry, both in terms of email Griffith Hack at [email protected] production of solar power and sale and export of solar technologies. Visit www.cleanip.com.au to learn more about protecting clean However, there is a risk and sustainable technologies. that some of the leading solar

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