It's no secret that market conditions are very difficult in the solar sector. This doesn't have much to do with demand (which keeps on rising) but with capacity being much larger, leading to price falls. This forces solar companies to reduce costs and increase cell efficiency, but they're doing so gradually.
They are not spending enough on fundamental research, which can lead to fundamental breakthroughs. By not doing that, they leave themselves open to new approaches that manage to take performance to new levels. This is definitely a danger for the big, established solar companies, as more fundamental research involving new materials and approaches is taking place in so many places.
While we do think the most bankable solar companies, like Trina Solar (TSL) and Suntech (STP) are close to a bottom, the present market conditions can only be described as very difficult. There is overcapacity leading to price falls that leave most solar panel producers without margins, a trade war between the U.S. and China, falling subsidies, and the specter of Europe (the biggest market) falling off of some kind of precipice.
It remains to be seen whether the price falls can engender sufficient demand elsewhere or industry consolidation can improve the situation short term. All top-tier producers are exposed to more radical innovation producing a quantum leap in performance. We have already provided two earlier surveys about some of the more interesting approaches outside the mainstream (here is Part I and here is Part II), and these were quite popular articles.
But there is so much R&D going on in labs and small, virtually unknown companies that a third installment is warranted, so here are a few additional interesting candidates.
Massachusetts Institute of Technology (MIT)
We'll start by what looks like a really promising innovation, one by MIT. Researchers at MIT have discovered a new technique that enables the production of solar cells that are as efficient in converting solar light to electricity as conventional cells, but the active layer is 90% less thick:
Using a pattern of tiny inverted pyramids etched into the surface of silicone, more light can be absorbed than solid silicon surfaces that are 30 times thicker. (Energydigital)
You have to realize that the highly purified silicon (basically the same material from which integrated circuits are made) comprise up to 40% of the cost of solar cells, so we're talking about a quantum leap forward here. Also, the solar cells shed a lot of weight, which produces transportation and installation cost savings.
How did they do this? Well, they create a pattern of inverted pyramids on the surface of the silicone:
Using standard silicon-chip processing materials, the team reported that the indented pyramid texture is easy to fabricate. Two sets of overlapping laser beams used to create the dents are integrated into the silicon using lithography techniques. Potassium hydroxide is then used to burn parts of the surface not covered, and the crystal structure of the silicon sets the pyramid shape. (Energydigital)
So they're using standard technology, no need for plants to retool. This could be a very interesting development. Here is a link to the original research paper.
Stanford came up with an approach that uses nanocones and a conductive organic polymer, creating the following advantages:
The hybrid solar cells' use of nanoscale texturing has two advantages: it improves light absorption and reduces the amount of silicon material needed. Previous nanoscale texturing of solar cells has involved nanowires, nanodomes, and other structures. Here, the researchers found that a nanocone structure with an aspect ratio (height/diameter of a nanocone) of around one provides an optimal shape for light absorption enhancement because it enables both good antireflection (for short wavelengths of light) and light scattering (for long wavelengths). (Phys.org)
However, these cells have an efficiency of 11.1%. While that might be a record for hybrid silicon/organic cells, it's still way off silicon cell-based efficiencies (which are in the high teens or better). This is definitely a work in progress.
Nano Solar By AMOLF Amsterdam and California Institute of Technology
Of course we can't leave out our own Amsterdam's institute AMOLF, winner of this year's ENI Renewable Energy Prize for their "light management" approach to solar cells that show that:
by integrating precisely designed metallic or dielectric nanostructures into the solar cell, the different colors of light from the sun are more efficiently absorbed and more efficiently converted into electricity. Their designs also enable the thickness of solar cells to be strongly reduced, so that they can be manufactured at much lower costs.
The technology is also scalable (often a problem with promising new approaches), so we fully expect to hear more from this in the future. You might also want to know that co-researcher Harry Atwater (also Dutch) who works at CalTec, is the father of two startups in solar energy, Alta Devices and Caelux, in order to commercialize these approaches.
Northwestern University (Australia)
Another illustration of the wide gamut of approaches is provided by Northwestern University of Australia, improving dye-sensitized cells.
In a dye-sensitized solar cell, incoming light excites a porous layer of titania coated with a dye, generating negative and positive charges. The negative charges-excited electrons-flow out of the cell through the titania, while positive charges flow into a liquid electrolyte. As with electrolyte-filled alkaline batteries, leakage is an ever-present danger, especially in solar panels subject to extreme weathering. (MIT Technology Review)
Well, Northwestern University has come up with a solution:
Northwestern University chemist Mercouri Kanatzidis, materials scientist Robert Chang, and two graduate students replaced the dye cells' liquid electrolyte with a solid iodine-based semiconductor. While prior solid-state designs have reduced the power output of dye cells, the Northwestern design actually boosts performance. (MIT Technology Review)
While the efficiency is lower and work still needs to be done to get it up and running, production costs are also lower. One of the researchers, Kanatzidis, argues that if efficiency can attain 11% these cells could become commercial. The cells did reach 10.2% efficiency. The next example also comes from dye-sensitized cells.
This is an Australian company producing low-cost dye-solar technology (although unlike the Northwestern University, they use a liquid electrolyte). We mention the company here because it has rather novel applications:
Its strategy is to integrate dye-based solar into building materials such as glass high-rise panels and steel roofing sheets. This March, Dyesol's South Korean joint venture partner, Timo Technology, installed glass panels on a building in Seoul. And Dyesol is partnering with India's Tata Steel to develop dye-solar-coated steel roofing. (MIT Technology Review)
While we discussed a host of technologies, which have relatively low efficiencies but are cheap and/or have novel application, Semprius has achieved a whopping cell efficiency of 34%. It uses gallium arsenide, which is more efficient than silicon, but also more expensive. So they're looking for ways to make these cells cheaper.
They do this by an ingenious production process, described by the MIT Technology Review:
One is by shrinking its solar cells, the individual light absorbers in a solar panel, to just 600 micrometers wide, 600 micrometers long, and 10 micrometers thick. Its manufacturing process is built on research by cofounder John Rogers, a professor of chemistry and engineering at the University of Illinois, who figured out a way to grow the small cells on a gallium arsenide wafer, lift them off quickly, and then reuse the wafer to make more cells. Once the cells are laid down, Semprius maximizes their power production by putting them under glass lenses that concentrate sunlight about 1,100 times.
The small size of the cells give an advantage because unlike normal-sized cells, the Semprius ones don't need cooling when lenses are used to concentrate the sunlight on them. Before you think that they've really hit the jackpot here, you have to realize that concentrated solar cells work best under direct sunlight; that is, efficiency drops off more steeply than normal cells under less than ideal conditions.
The company is already building a plant to manufacture the cells though, so this is a relatively advanced stage innovation. They have private capital from Siemens (SI) and venture capital.
University of Florida
Researchers at the University of Florida have just set a new record for graphene solar cell efficiency, yet another material that contains hope of cheap and efficient solar cells:
Graphene solar cells are one of industry's great hopes for cheaper, durable solar power cells in the future. But previous attempts to use graphene, a single-atom-thick honeycomb lattice of carbon atoms, in solar cells have only managed power conversion efficiencies ranging up to 2.9 percent. The UF team was able to achieve a record breaking 8.6 percent efficiency with their device by chemically treating, or doping, the graphene with trifluoromethanesulfonyl-amide, or TFSA. (UFL.com)
The efficiency, 8.6%, while a record for graphene but it isn't terribly impressive compared to other materials. However, just like thin film, what it lacks in efficiency it could well make up in cheaper materials and manufacturing cost. But it also has other advantages:
Graphene, unlike conventional metals, is transparent and flexible, so it has great potential to be an important component in the kind of solar cells we hope to see incorporated into building exteriors and other materials in the future," said Arthur Hebard, distinguished professor of physics at UF and co-author on the paper. "Showing that its power-converting capabilities can be enhanced by such a simple, inexpensive treatment bodes well for its future.
If these cells reach 10% efficiency, they could become real contenders.
Based in the U.K. (Manchester) and actually listed on the U.K. stock exchange, this is a world leader in "quantum dots" -- that is, the cadmium-free version of them. While solar cells are only one of many interesting applications for quantum dots, it is a very interesting one nevertheless, enabling to literally print solar cells:
The company's advanced PV based quantum dots are being developed in such a way that they are capable of forming printable inks in a variety of solvents, paving the way for low cost, roll to roll production of new solar cell technologies. Nanoco's advanced photovoltaic quantum dots use an organic 'capping agent,' which allows them to be printed easily by a variety of techniques. Once printed, the organic capping agent is removed, providing an inorganic photoactive layer of the desired phase. (Solarpowerportal)
Even some of the existing behemoths of the solar world are having a go at more fundamental innovations. And there is no bigger beast than former stock market darling First Solar (FSLR), which is in a bit of a tight spot. Its Cadmium-Tellurium (Cd-Te) thin film technology, while producing less efficient cells compared to the competing Crystalline silicon cells, nevertheless enjoyed a massive run as its cells enjoyed a large cost advantage that was especially relevant where space doesn't matter so much (almost all non-rooftop applications).
However, that cost advantage has been completely eroded (mostly by drastic falls in the price of polysilicon, the raw material of which the crystalline cells are made), which has made life quite a bit more difficult for the company. It is no surprise, therefore that it is trying to innovate its way out of this hole.
First Solar will leverage Intermolecular's High Productivity Combinatorial platform in the development of its advanced, CdTe-based, thin film PV manufacturing technology. The program addresses new opportunities in certain critical materials and processes that may significantly influence the conversion efficiency of CdTe technology. Technical work is to be performed jointly at Intermolecular's San Jose, Calif., facility and in First Solar's research and development labs.
So basically, First Solar has more or less outsourced innovation to Intermolecular. The latter is an interesting type of company. Here's Seeking Alpha contributor Kevin Quon's take on it:
The company currently boasts that it's able to speed up the research & development process by 10 to 100 times. It's able to do this because its underlying process allows for up to 192 experiments on a single substrate as compared to the traditional method which only allows for 1 on a given test run. According to the company's S-1 filing, this competitive advantage is protected by Intermolecular's vast IP portfolio in which it boasts owning or having access to over 577 U.S. patents as of July 15, 2011.
We have to wait and see what comes out of this (it's too early to speculate), but it's interesting nevertheless that even some of the more established players see the need for more fundamental breakthroughs and are willing to spend R&D money on that.
Argonne National Laboratory
There also seems to be something of a breakthrough in the world of organic solar materials, traditionally lagging in conversion efficiency (that is, the same material is able to convert much less sunlight into electricity). However, organic cells do have a cost advantage.
If organic cells could jack up their efficiency cheaply, they could have a winner. This is what the innovation out of the Argonne National Laboratory seems to have done. While the exact nature of the advancement is rather technical (here is a description, involving cute stuff like "excitons"), it involves different materials (more "heavily polarized excitons") that increase the efficiency of organic cells.
Apparently it's too early to assess the progress in terms of increased conversion efficiencies, but it's an interesting development nevertheless.
Ideal Power Converters (IPC)
A little company out of Austin, Tex., has come up with some very interesting complementary innovation in the form of a much smaller, compact power inverter. This is not so much a threat to existing solar companies as a device that enables them to reduce the cost of installation (the so-called "Balance of System," or BOS, cost).
The problem is that while the cost of solar panels has gone down multiples, the cost of installation has not.
But IPC's power inverter can make quite a difference here. Normally, 30kW photovoltaic inverters are rather heavy affairs, between 1,200 and 2,000 lbs. However, IPC's new inverter weighs just 94 lbs. That not only means a host of material savings, it also reduces logistical and installation costs:
A 94 lb converter can be shipped in a box and delivered to the site by Fed EX or UPS. Conventional converters need a truck and a fork lift to unload and install. Other Inverters sit on a concrete pad outdoors. (Examiner.com)
Installation options are also increased. The inverter can be mounted on a wall in a garage, so it doesn't have to be outside, making it safer to protect from thieves and damage. All this results in meaningful cost reductions:
This inverter has reduced BOS costs about $0.15-$0.20/Watt in Texas according to Bundschuh. System costs, meaning costs other than the panel itself, make up about 59% of the cost of a solar project according to Richard Swanson, president emeritus of SunPower Corp who spoke at the Forum. (Examiner.com)
The above are only a few of a myriad of innovation projects, using new materials, new approaches and new applications to push solar energy forward.
Given that there are so many labs and companies working, we feel that the chance of a significant breakthrough in any of them is quite real. This is yet another danger for the big established solar companies, which spend relatively little on R&D and have the present extreme market conditions to contend with already.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.