Higher-efficiency solar cells grab market share, slow price erosion

Amid a persistent and steep PV module price decline that is pressuring manufacturers’ margins, more evidence is appearing that high-efficiency solar cells will grab market share and create differentiation that could bolster prices, according to IHS.

October 3, 2011 — Amid a persistent and steep photovoltaic (PV) module price decline that is pressuring manufacturers’ margins, there is some good news. High-efficiency crystalline silicon (c-Si) PV cells will more than double market share by 2015, according to the IHS iSuppli PV Perspectives Market Brief.

High-efficiency solar cells use advanced conversion techniques to increase efficiency by 0.3-5%. Technologies include back-side contacts, passivation layers, heterojunction cells, selective emitter, light-trapping advances, smaller front-side metallization, and bi-facial cells. Upcoming techniques could include 3D cell structures, hot-carrier technologies, and new energy-conversion layers based on rare-earth elements and Si nanoparticles.

Figure. Global shipments of standard and high-efficiency c-Si cells (by percentage of the total c-Si PV wattage). SOURCE: IHS iSupply Research, September 2011.

These technologies were seen in 14% of c-Si solar cells this year, but expect them to appear in 31% of global c-Si solar cell shipments in less than 5 years (see the figure). High-efficiency technologies that have been available for many years are only now seeing commercial adoption, due to a 10-15% panel cost increase that comes with the boosted efficiency. Today’s solar cell makers are implementing these technologies in a more cost-effective manner with higher yields.

This trend toward higher efficiency represents a shift for the PV industry from a focus on high-volume manufacturing and price wars to market differentiation, said Henning Wicht, senior director and principal analyst for PV systems at IHS. This strategic move by top module and cell suppliers could “slow price erosion” and “improve profitability,” Wicht forecasts.

Lux Research agrees. In a recent report, Lux said higher efficiency counteracts the effects of grinding competition, disappearing subsidies, and price declines.

Research labs (ECN, Fraunhofer), equipment companies (Applied Materials Inc. (AMAT), Manz Automation AG), and cell materials suppliers (DuPont) are leading the rise in higher-efficiency technologies.

In early 2011, the leading producers of high-efficiency cells were California-based SunPower Corp. and Japan?s Sanyo Electric Co. Ltd. However, several other players also are expected to roll out their offerings during the course of this year.

To learn more about this topic, see the IHS iSuppli report “Raising the ‘W’–The Next Challenge for the PV Industry to Lower $/W” at http://www.isuppli.com/Photovoltaics/Pages/Raising-the-W-the-Next-Challenge-for-the-PV-Industry-to-Lower-W.aspx?PRX

IHS (NYSE: IHS) provides analysis on energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. Learn more at www.ihs.com.

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