The utility scale sweepstakes: Thin films, crystalline and concentrating solar

A skirmish is taking place among the manufacturers of crystalline and thin-film technologies.

by Paula Mints, Navigant Consulting, Palo Alto, CA USA

A skirmish is taking place among the manufacturers of crystalline and thin-film technologies. Thin-film manufacturers state that large fields suffer less from area penalty (that is, technologies that are lower in efficiency require more area) and are more economical to install than higher efficiency crystalline—which, according to the proponents of this theory, belongs on rooftops. Not to be left out, CSP (solar thermal) is re-emerging as competition for large (>1-MWp) installations.

As with everything these days, it’s the economy that matters. Every industry and product is, or will, experience a slowing of demand. For solar, this will affect all manufacturers of technology, investors in and buyers of systems, system integrators, installers, retailers—and in particular, new entrants. All is not doom and gloom, however, as downturns typically spawn technology and business innovation. For the photovoltaic (solar) industry, already high-tech, manufacturing cost reductions will accelerate, efficiencies will improve, module and system prices will decrease (primarily due to softening demand), BOS innovations in cost and design will come, and business models will become refined.

Along with business and manufacturing innovations, soft demand and frightened credit are spawning cuts in module prices. This downward trend in pricing, while welcome to system integrators and investors, will be painful for manufacturers of technology, whether thin-film or crystalline. Tighter margins are coming—and in fact, they are here already. The assumption of unlimited demand brought many companies to enthusiastically enter the PV industry. Now that these companies face hard times, some will falter, some will exit, and some will innovate and persevere.

Currently in the US there is great optimism about assumed support for solar by President Obama, and also for an up-tick in demand by utilities for solar. The solar industry hopes for a continued boom in demand for systems >1MWp, despite the recession. President Obama is committed to renewables and to necessary upgrades in US transmission. On the other hand, his energy secretary has stated that he wants to fast-track nuclear. Moreover, the new administration needs to focus on many diffuse directions at once, all of them in crisis: the economy in a tailspin and no agreement on how to stop a potential crash landing and thus a years-long recession. As for utilities, foreclosures, unemployment, and other concerns are having a negative affect on revenues and may force some project rethinking.

A downturn, of course, provides a perfect foundation, again, for innovations of all types—including marketing. For most products, the company that tells the best story typically wins. As solar becomes a more visible energy choice, the industry will need to mature its storytelling. In this context, the selling of thin films as more appropriate for large installations than crystalline, and CSP (solar thermal) as thin film’s true competitor in this regard, is interesting — though again, not strictly accurate. However, the current slowing in demand gives the solar industry, and all its participants, an opportunity to hone marketing skills. In a couple of years demand will accelerate, and solar technologies should emerge as competitive with all energy technologies. The industry will need strong marketing then, even more than it does today. For that time, may the best story win. And let it be a solar story.

Paula Mints is principal analyst, PV Services Program, and associate director of the energy practice at Navigant Consulting; pmints@navigantconsulting.com.

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