Increasingly, thin-film photovoltaics (PV) operations are popping up across China, indicating active development in this sector, which is expected to provide affordable solar power and be used widely in the future.
By Yotam Ariel and Coco Liu
Increasingly, thin-film photovoltaics (PV) operations are popping up across China, indicating active development in this sector, which is expected to provide affordable solar power and be used widely in the future. Most experts believe that skyrocketing polysilicon prices in 2008 increased the price advantage of thin film, pushing Chinese manufacturers to adjust their product mix.
“As domestic polysilicon price rose, the production cost of silicon-based solar cell module in 2008 was, at some point, 4-5 times higher than that of thin film modules,” says Jiang Qian, principal energy analyst at Shenzhen Zhongzhe Investment Consulting Co. “Despite the fact that China’s polysilicon price slumped from US $480 per kilo in 2008 to US $60 per kilo now, thin-film producers still enjoy a price advantage as its production cost is 20% less than that of silicon modules.”
In addition, it is expected that the production cost of thin-film will continue dropping, as Chinese producers are now putting more resources into R&D and partnering with manufacturing equipment suppliers.
“Our production cost of each watt of thin film is about 8 yuan,” says Dr. Liyou Yang, CEO of Astronergy Solar. “But in 2011 or 2012, we can cut the production cost to about 4 yuan per watt, by technology improvements and developing a domestic supply chain to reduce the cost of raw materials and equipment.” Wanting to capitalize on this declining production cost, Astronergy Solar plans to increase its annual thin-film capacity from 30MW now to around 1,000MW in the next three years–a rise of 3,233%, according to Dr. Yang. Astronergy is not alone. In November, Jiangsu-based Best Solar High-Tech Co., Ltd. finished constructing two production lines with a total capacity of 130MW thin film.
The rising demand in thin film is also being driven by its technical advantages—such as tolerance to harsh environment, better performance in lower light conditions and flexibility—over its “thick-film” counterparts. For example, Hebei-based Baoding Tianwei Group Co., Ltd., a silicon module producer, established its first thin-film subsidiary in 2008 and recently signed a three-year contract with Thai Green Energy Co., Ltd., in which more than 70MW of thin film will be supplied for the Southeast Asia market.
In the domestic market, thin film is well suited to large-scale solar farm projects in China’s five northwestern provinces and Inner Mongolia, due to vast available land and harsh climate conditions, says Jiang Qian, Zhongzhe Investment Consulting’s analyst. Also, demand for thin film will increase with the development of China’s Building Integrated Photovoltaics (BIPV) projects, says Zhang Shuai, analyst at Chengdu-based Sinolink Securities Co., Ltd.
U.S. First Solar enjoys great success as a top thin-film producer, but it is hard for Chinese thin film producers to achieve the same, due to their limited production scale, shortage of advanced technology and heavy reliance on imported equipment and raw materials. “Limited production scale and our lower technology level bar Chinese thin-film producers from competing with foreign companies,” said analyst Jiang. Most of China’s thin-film manufacturers have to buy expensive equipment from foreign companies, such as U.S. Applied Materials, Switzerland’s Oerlikon and Japan’s Ulvac Inc., making their upfront investment ten times higher than that of silicon module producers, according to Sinolink Securities’s analyst Zhang.
Also, China’s thin-film producers greatly depend on foreign suppliers, which could potentially cause short supply in major raw materials such as target materials, conductive glass and silane gas, says Zhang.
Yotam Ariel is an independent business consultant solely focused on solar PV. Based in Shanghai, he has been conducting business in China for more than four years, assisting nternational clients with market intelligence and government issues such as regulations and incentives. Coco Liu is a professional writer, primarily covering energy and agribusiness in China.
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