California, United States [RenewableEnergyWorld.com] The photovoltaic industry was hit hard this year, contracting in size as the economic crisis took hold, credit markets tightened and the once-hot Spanish market slowed to a crawl. But speakers at a recent thin-film summit in San Francisco were largely optimistic, with many saying that as the solar market rebounds thin-film technologies are poised to successfully compete against conventional, crystalline silicon-based modules and other sources of electricity. To grab more market share, however, the resonating theme from the conference was cost reduction.
“The bottom line is cost,” said Harin Ullal, a project manager focused on PV for the National Renewable Energy Laboratory (NREL). “Installers want the lowest cost systems, so everyone is trying to squeeze out every cent possible.” Ullal, who has compiled a list of 60 U.S.-based thin-film companies, said during the summit that most industry players aim to reduce costs through a combination of increased scale, module efficiency gains, higher yield and less (or cheaper) materials.
One such company is CIGS module developer XsunX. Vice President of Engineering Robert Wendt said during a panel that the startup is trying to reduce costs mainly through efficiency gains. “If we go from 10-11 percent to 15-16 percent, then the price of all your commodity materials goes down by that amount,” Wendt said.
The Aliso Viejo, Calif.-based company is developing a hybrid manufacturing process for CIGS modules that would combine magnetic media technology from the hard disc drive industry with small-area, thin-film deposition processes. The latter, as opposed to large area processes, have achieved higher lab efficiencies, and XsunX hopes it can do the same on a commercial scale.
Meanwhile, Santa Clara, Calif-based Applied Materials, which makes manufacturing equipment for amorphous-silicon thin-film modules, is taking a multi-pronged approach to reducing costs. Applied’s Christopher Beitel said during a panel that the company believes the biggest savings will come from scaling factory output. Manufacturing lines larger than about 300 megawatts (MW) would lead to savings in reduced capital equipment, labor and materials costs of about US $0.15 per watt produced, Beitel said (To put that in perspective, Lux Research senior analyst Ted Sullivan said Applied’s manufacturing lines typically produce thin-film modules for about $1.30-$1.50 per watt).
Besides scale, Applied is looking to reduce costs with cheaper materials and efficiency improvements, Beitel said. Every $10 per square meter reduction in material costs like glass or wiring and every 0.5 percent efficiency gain would result in overall panel savings of about US $0.06 per watt. While every 1 percent improvement in yield, or the amount of salable product produced per day, would save about $0.02 per watt.
Solar panel makers have always sought to reduce their prices in the hope of attracting more customers, but thin-film companies are under particular pressure to succeed at this today. That’s because the leading thin-film player, Tempe, Ariz.-based First Solar, is now producing panels at less than $1 per watt while conventional silicon-based modules costs have plunged because of a large capacity oversupply.
Most thin-film players, in other words, are facing stiff competition, which is why their chunk of the PV market will remain relatively static in the near term, according to Paula Mints, an associate director with Navigant Consulting who conducts market research on the solar industry. Mints estimates thin film will account for about 25 percent of the PV market this year and forecasts its market share will shift no more than a few percentage points through 2013. “The cost of crystalline silicon is going down and its efficiency is going up,” Mints said. “It’s not a race thin film can win.”
Still, even if thin film doesn’t grow its market share, the overall upward trend in the solar industry that’s expected to begin next year will nevertheless provide opportunities for thin-film companies. Market research firm DisplaySearch forecasts global demand for PV will grow to 7.1 gigawatts (GW) next year from 5.1 GW this year, and then rise steadily to 26 GW by 2013. The firm, however, expects thin-film production capacity to rise during that same time period, from about 3.4 GW this year to 12.7 GW in 2013.
Lux Research’s Sullivan says those thin-film companies that can identify and execute on niche markets will be successful. He said each application — such as roof-mounted solar or building-integrated solar — will “bear a different cost for competitiveness” and the $1 per watt threshold often cited in the industry is misleading. Yes, thin-film companies must reduce costs, Sullivan said, but the targets they must reach to be competitive vary as much as the applications.
Fremont, Calif.-based Solyndra (see image of panels above), for example, makes CIGS panels that are tailored for flat commercial roofs. While Seal Beach, Calif.-based Amonix builds double-axis tracking arrays with optics concentrating sunlight onto highly efficient multijunction cells. In coming years, widespread success for the emerging thin-film industry might hinge as much on smart business decisions as it does on cost savings and technological innovation.
Justin Moresco has been writing about sustainability and green issues since 2005, first as a correspondent in West Africa for IRINnews. He now focuses mainly on emerging clean technology and is based in the San Francisco Bay Area. Before becoming a journalist, he was a licensed civil engineer.