Blogs, Solar

The Solar Market Is A-Changin’

The writing was on the wall. Or maybe on the manufacturing line. After a year of difficulties bringing down costs to compete with traditional crystalline silicon, Applied Materials is officially exiting the amorphous silicon thin film market.

The company announced today that it would halt sales of its SunFab line, a turnkey manufacturing line that hit the market in 2006/2007 when silicon prices were at record highs. At that time, amorphous silicon thin film looked very attractive. Not so much today. GTM Research reported earlier this year that Applied’s SunFab equipment cost about 30% more than standard PV manufacturing equipment. With prices for crystalline PV dropping so quickly in the last 18 months, that put the squeeze on many of Applied’s customers.

Applied says it will focus on crystalline PV through acquisition and by beefing up its own internal RD&D efforts. The company expects the scale-back to reduce operating expenses by about $100 million per year and cut about 500 jobs.

The move is representative of the still volatile market for solar PV. A few years ago, investors and large companies companies like Applied flocked to technologies like amorphous silicon, CIGS (cadmium indium gallium selenium) and organic PV. None of those products has made a large dent. Crystalline silicon is still about 80% of the market. And Cadmium Telluride thin film, lead by First Solar, is about 17% of the market. Now that silicon prices are so low, many of those technologies are not as competitive. ::continue::

Still, a number of companies are pushing ahead and focusing on cost reductions, confident that the market will swing in their favor. After all, it is getting hard to find panels again as demand increases in Asia and Europe. And in the coming years, some analysts predict another possible shortage of silicon.

One company, Oerlikon Solar, has been using the downturn to tweak its own turnkey manufacturing line that it sells to customers. After a quiet period of no sales, Oerlikon recieved an order for a 29-MW expansion of a line in China earlier this month. The company is focused heavily on higher-efficiency tandem-junction cells, which it claims will cost about 70 cents to produce by the end of this year. That goal seems like quite a feat. But if Oerlikon can get costs down that far, then it will be able to compete with the likes of cost-leader First Solar.

These are very interesting times for solar companies. (cliché yes, but when is it not an interesting time in solar?) The market conditions are changing so rapidly, companies like Oerlikon, Applied and others are constantly having to re-evaluate their strategies. I sat down with Chris O’Brien, VP of business development and government relations with Oerlikon, at Intersolar to talk about why the company is still investing in amorphous silicon while other companies are getting out of the market.