With Thin Film, U.S. Might Take the Lead in Solar Market

By Ucilia Wang

A brawn versus brains battle is brewing in the solar market.

Asia and Europe currently dominate the $50 billion solar market, which itself is dominated by silicon crystalline panels. By contrast, most of the thin-film market is concentrated in the U.S. If thin film lives up to the promise of its proponents, the U.S. could conceivably upend the balance of power.

Then again, U.S. companies will have to establish their technologies quickly and fend off growing expertise in thin film by Honda (HMC), BP, Sharp (SHCAY.PK) and others.

"Thin-film players have got to get into the industry in the next few years, and you [have] got to move to scale," said Nathan Furr, a Greentech Media consultant and co-author of a new market research report by Greentech Media surveying the North American solar industry (see summary).

The report divides solar technologies into four areas: crystalline silicon, thin film, concentrating solar and everything else (organic cells, dye-sensitized solar cell, etc.).

In some ways, the nature of the competition differs between the crystalline solar cell and thin-film market. The crystalline market is fairly mature. Thus, the manufacturers Japan, China and Germany largely compete on manufacturing scale, building large factories and nailing the science of producing lots of products cheaply.

By contrast, the thin-film market barely exists, particularly with solar panels that don't rely on silicon. First Solar (FSLR) in Tempe, Ariz. is one of the few companies that have achieved that all-important milestone of producing products in high volumes with a non-silicon product. (It uses cadmium tellurium.)

As a result, competition revolves around raising capital, landing patents, building a management team and establishing prototype plants. About $4.3 billion in venture capital has gone into solar technologies between 2005 and the third quarter of 2008, with the majority of the money going to North American companies.

Furr wrote in the report:

The North American PV industry as a whole represents a strongly diversified technology portfolio. There are more PV technology developers in North America than in Europe and Asia combined.

The main thin-film technologies today use cadmium tellurium, amorphous silicon or copper indium gallium selenium [CIGS] as the main ingredients in the cells. Meanwhile, some others such as Stion and Bloo Solar say they will come out with panels made of entirely new materials or structures for trapping light better than conventional cells. (Stion is said to be working with quantum dots.)

Furr pointed to Solyndra and Nanosolar as good examples of thin-film startups with the potential to become large players. Both California companies make CIGS panels and have begun commercial production of their products.

Competition between the two also has become intense. Nanosolar CEO Martin Roscheisen just wrote a long blog refuting claims made by Solyndra about its unusual solar panel designs (see Nanosolar: Tubular Thin Films Are Overrated).

The report said:

North America's small, entrepreneur-driven PV companies stand to emerge well-positioned globally following the resetting of credit markets in 18 to 24 months.

Nonetheless, these companies must move quickly. Q-Cells is funding a cadmium telluride company while Honda has one of the world's biggest CIGS efforts underway.

"It's a wonderful thing to increase cell efficiency, but you've got to be able to do it in scale and ramp up," Furr said.

Of course, the world versus America line invariably begins to get hazy in a global market. First Solar achieves some of its lowest manufacturing costs in its factories in Malaysia while SunPower (SPWR) manufactures heavily in the Philippines.

Meanwhile, SolarWorld (SRWRF.PK) from Germany is building what it says will be the largest solar cell factory in Hillsboro, Ore., (see Q&A: Will U.S. Become a Solar World?). Sanyo Electric (SANYY.PK) from Japan is building a factory Salem, Ore.

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Greentech Media

Comments

[nakedjaybird:]

Author - your chart shows "Silicon" and "Thin Silicon". Is there any crossing of these lines between Crystaline and Amorphous? For instance is there any "Thin-Silicon Crystal", or any "Silicon Amorphous?

Does the industry reserve "Silicon" for all cut crystal wafers, whether mono, multi, or poly; and "Thin-Silicon" is strickly amorphous?? Or is there some mixing of terms here?? What are the standard terminologies; official, if possible.

2008 Dec 15 12:28 PM

[vitamin_j:]

I would like to hear more discussion of these products in terms of "balance of system" costs. Greentech Media has put out good articles on this recently.

While I don't consider it an "either/or" proposition, I'm still skeptical about thin film because of its low efficiencies. If, in a rough comparison, you need two thin film panels for every one crystalline silicon panel, that's twice as many mounts, and twice as much space used per installation. Those two factors add to costs and limit thin film's advantage.

I'm interested to see how some of the new non-panel technologies look - Nanosolar claims to offer a skin you can just unroll on a rooftop, for example. They also claim higher efficiencies. Then again, they are famous for claims, not yet famous for results.

2008 Dec 15 01:08 PM

[searcher:]

Yes, low efficiency but cheaper to make modes still require formats that allow cost improvements in installation and maintenance over that current. Thin film entices with the 'skin' covering concept. The very termionology 'thin' invites visions of flexible substrates that would allow greater degrees of freedom in sites and structures. Unfortunately, the terminology 'thin' may also bring to mind durability and maintenance issues.

2008 Dec 15 02:20 PM

[Jerry Anderson:]

Apogee Enterprises invested in thin film technology through their Viracon / Viratech unit back in the early 90's and was an early leader with outstanding technical talent.

2008 Dec 16 05:39 PM