The last year has been a tough one for the solar energy sector. Anyone who owns companies like First Solar (Nasdaq:FSLR) SunPower Corporation (Nasdaq:SPWRA) and Suntech Power Holdings (NYSE:STP) has surely "felt the heat" if you'll excuse the pun.
Even those who chose the more diversified ETF route like the Market Vectors Solar Energy ETF (NYSE:KWT) saw their shares fall from around $41 to slightly above $7. Since the lows KWT has recovered to slightly above $16.
Recently I interviewed Tom Djokovich, the CEO of XsunX Solar Products (OTCPK:XSNX) and what I discovered gave me great hope for the future affordability and sustainability of solar energy around the globe.
XsunX is using its thin-film photovoltaic (TFPV) process knowledge to revolutionize the solar industry by combining state-of-the-art, sophisticated, magnetic media thin-film manufacturing technologies used by the hard disc drive industry with proven thin-film photovoltaic processes.
This mass production, cross-industry technology breakthrough will increase cell efficiency, improve production speeds and yields, and dramatically lower the cost for solar cells. XsunX’s novel approach bridges the gap between inexpensive thin-film and high efficiency silicon wafer technologies to produce solar cells for multiple market segments and a wide variety of applications.
The mass production of individual, high performance, flexible solar cells – like solar building blocks – will allow solar power to finally compete effectively against other sources of electrical energy.
Tom Djokovich, XsunX CEO commented in a press release on 7/20/09:
“High efficiency flexible CIGS solar cells provide an immense opportunity for use in multiple market segments. They are like solar building blocks for a wide variety of applications including use as a virtual drop in replacement for costly silicon wafers.
This is a vast market opportunity to replace aging technology. Working with a proven manufacturer of HDD systems and the National Renewable Energy Laboratories will not only accelerate our progress, but will also increase the value of the technology to the industry.”
Tom believes there really is a lucrative demand for TFPV and that the solar industry is waiting for the kind of technology (acronymn is CIGS) that is U.S. made, highest in energy efficiency and very cost effective.
The kind of thin-film PV solar cells XsunX wants to help create will be "drop-in replacements for silicon wafers, and have a wide variety of applicatons, including the creation of huge solar panels and modules for applications that need greater amounts of solar power.
A company like XsunX is hoping to find what the CEO called “Hybrid joint-venture relationships [on sort of a royalty basis], that are manufacturing partners." This will allow the production costs to be minimized while allowing for a quicker time for production, marketing and utilization.
I asked Tom, "What kind of potential manufacturing partners are you looking for? He anwered that a good fit would be any company that wants to replace the “silicon-wafer manufacturing process” or companies in the high disk drive manufacturing business [think Seagate Technology (NYSE:STX) although Tom didn't mention them by name] would be good potential manufacturing partners.
"The solar industry has failed to take what works in the laboratory to the factory floor. We can have both commercial scale and high-efficiency by dramatically lowering the cost for solar cells" Mr. Djokovich asserted. The CIGS technology that XsunX has developed "holds the world record for TFPV efficiency".
"Cross-industry technology may soon utilize the excess manufacturing capacity of the hard disc drive industry to mass produce low-cost solar modules" he reiterated. I asked "How far away is XsunX from actually manufacturing thin-film CIGS solar wafers?"
His answer surprised me. "Our goal is a 9-10 month, two-phase plan. We hope to have working samples within 10 months."
I also asked the following questions, which I've summarized for brevity's sake:
How is the economic situation impacting your quest for success?
Over-production has occurred in the solar industry over the past few years. In 2008 it made it harder to finance solar projects. Now that the credit market has thawed somewhat, demand is still there, but not for low-efficiency products. The solar energy market wants a high-efficiency product and can ask a premium price for those products. XsunX is hoping that investors and partners will realize that and subscribe to their vision.
What is the Greatest Financial Concern and Challenge XsunX faces:
Financing and available credit is a challenge. The good news is that the CIGS process needs 75% less capital (R&D capital and operating capital) so our new business model is more affordable and better fitted for the current economic environment.
Tom ended our interesting discussion by reminding us:
“To the investor: The solar sector is full of opportunity, but there is no technology panacea or superior, single technology that will dominate 100% of the marketplace. I get asked sometimes 'Will your solar technology work for 20 years?' The short answer is “yes” but long before 20 years is up there will be new and better technologies that we are committed to developing, inventing and adapting.”
He summarized the challenge facing the solar industry going forward, defined the problem and shared the solution:
The Need- -Attaining Grid Parity
Costs for solar power must be reduced to well below $1 per watt for it to be competitive with grid electricity (grid parity). By rapidly commercializing breakthrough thin-film photovoltaic technology, XsunX strives to provide a true, low-cost sub $1 per watt solution to the industry, while also assisting in bringing about new revenue opportunities for the already mature hard disc drive industry by using its excess manufacturing capacity to mass produce high efficiency, low cost solar cells.
The solar industry is relatively new. Growing government mandates and sponsorship is enabling many in the industry to work to establish large scale, low cost solar cell manufacturing capacity. Even though significant investments have been made, in reality compared to other energy sources, solar still requires massive investments to create much-needed solar cell manufacturing infrastructure. Today the power of the sun, without government subsidies, still cannot compete effectively with conventional sources of electrical energy. A more efficient manufacturing process is needed that does not sacrifice the efficiencies of solar cells as these manufacturing systems increase in scale. This new process must:
- Reduce the cost of infrastructure
- Increase per square foot manufacturing facility output
- Break the barriers to large area high efficiency thin film modules
- Leverage existing manufacturing infrastructure to reduce time-to-market
Few industries have successfully improved quality and simultaneously reduced costs as effectively as the hard disc drive (HDD) industry. Unfortunately the production of thin film solar cells has been very disappointing as it has failed to deliver the same manufacturing efficiencies as the HDD industry. Global solar module production is still dominated by the production and use of more costly five-inch square silicon wafers. To solve this problem and provide existing silicon wafer users and thin film manufacturers with a high performance, low cost solution, XsunX is combining HDD manufacturing techniques with our customized TFPV processes.
The well-established and very mature hard disc drive industry has enormous magnetic media thin-film manufacturing capacity available to produce massive quantities of hard disc drives. Due to the over-building of manufacturing plants and the downturn of the global economy, the HDD industry is in need of another way to utilize its excess manufacturing capacity. This existing HDD infrastructure represents more than 3 Gigawatts of annual output if hard drive media were replaced with solar cell manufacture.
"We at XsunX believe that this it is not only possible, but it is in the best interests of both industries to move forward in combining the two processes. The HDD industry is fully mature and has already proven that it knows how to cost-effectively produce silicon wafers, while the thin-film photovoltaic process is one that most in the industry agree is the best method of manufacturing solar panels.
By combining the two, XsunX believes it has the potential to revolutionize the solar industry and make it cost-effective to pursue this method of energy production. And, in so doing XsunX will create a new category of solar manufacturing."
You can learn all about XsunX, their technologies, plans and vision for building a "Green Future" through solar power by going to their very attractive and easy-to-read site at http://www.xsunx.com/Default.aspx
It sure looks like the cost of solar energy is about to become very competitive, and that bodes well for those of us who believe in the desperate need for alternative, sustainable, earth-friendly forms of energy and power.
Disclosure: I do not own any of the companies, stocks or funds mentioned in this article.