Strategies for Gaining Share in Solar Market (Part I)

The solar cell manufacturing industry has become a “me too” business. Solar companies manufacturing polycrystalline panels buy the same polysilicon and wafers from less than a dozen material suppliers. Companies buying an amorphous silicon thin film process line from Applied Materials (AMAT) or Oerlikon (OERLF.PK) are making the same films as other customers from these equipment vendors.

Certainly there are new avenues of manufacturing, such as CdTe from First Solar (Nasdaq:FSLR), CIGS from half a dozen manufacturers, multi-junction cells from companies such as Uni-Solar, and building integrated photovoltaics (BIPV) from an increasing number of manufacturers. These technologies differentiate these companies’ products, but the proportion of wattage manufactured, while growing, is small compared to the majority of solar panels sold using traditional methods of production, i.e., a thin film on a glass substrate.

How can the majority of solar manufacturers differentiate their products, particularly during the economic slowdown that has dropped capacity utilization to below 50%, and most importantly, how can they do it cheaply? Aside from the traditional lingo such as reduce costs or economies of scale, there are better ways – increase efficiency and improve reliability.

Increase efficiency

Amorphous silicon thin film manufacturers are working on a micromorph structure in which a second layer of silicon is deposited. Applied Materials and Oerlikon are spending vast amounts of R&D to get the solar cells made on their equipment from an efficiency of less than 8% to above 10% to be competitive with CdTe and CIGS, but they are a few years away. Even so, the added cost of the vacuum equipment to deposit the additional layer can cost upwards of $50 million for a 60MW plant.

A local company (contact me for details) has developed a coating for amorphous and polycrystalline cells that can improve efficiency between 8 and 12% using non-vacuum techniques so that the cost is in the cents per watt range. Tunable refractive indices make these materials excellent candidates for improving both thermal conductivity and absorption bandwidths. When these unique, novel coatings are coupled with nano-enhanced polymeric coatings, significantly improved durability and extended product life can be anticipated. UV resistance, resistance to optical crazing, and the effect of adverse weather and temperature conditions is also predicted. Films can be coated on any surface.

Research was performed at an acclaimed university in Eastern PA, and the company is now looking for additional funding to optimize deposition parameters and coating properties with the intent of licensing the IP to all solar manufacturers.

Increasing the efficiency by 10% will increase a 50MW production line to 60MW. At a selling price of $3 per watt, that comes to added revenues of $30 million at an added cost of $1-2 per panel, that’s per panel of 100-200W, or 50,000-$100,000 per year for the 50MW facility. Imagine the possibility if this coating was put on all 7GW of power. I estimate it will be installed this year as indicated in a previous Seeking Alpha article from late November 2008.

Improve Reliability

The high costs of solar panels and their installation keep them out of the “throwaway” mentality. Long life and low cost of ownership are paramount, particularly in space applications. Manufacturing can introduce deficits in solar cells that can result in low electron mobility (EM), electron traps and photo-degradation from UV light. In part 2 of this article I will discuss how these issues affect the efficiency and lifetime of solar cells and the importance of measuring electron mobility at the wafer and cell stage, and how these results can increase market share for the manufacturer.

Disclosure: No positions

Comments

[jouvet:]

Another way to differentiate is in their Go-To-Market strategy .... especially when they sell in europe. The fist one who will have a clear two-tier model will clearly embark all the resellers/installers who currently don't know how to source efficiently their products !

May 04 05:40 AM

[rooferguy:]

Hi Robert -

I like your "Part 1" for thin film strategies. What about "Part 2" for crystalline strategies? Seems like the cells have become commodities -- and the glass and aluminum have been for awhile. How will cell-based module companies gain market share on dimensions other than low price?

May 04 01:50 PM

[ChazzyD:]

How about a little variety in the module shape? Decorative, ornate shapes... a little form and function. I would be much more likely to put something on my property if it had a little character. A star, a triangle, a circle, a flower, anything other than a rectangle or square.

May 04 05:22 PM

[rooferguy:]

I saw a company that made hexagonal modules. And Sharp used to make triangular modules. And nature makes a sunflower. Problem is that they don't make glass in those shapes (very expensive to cut and lots of waste), and framing/mounting is problematic. I think we're stuck with squares and rectangles for cost and installation reasons.

May 04 06:31 PM