Thin Film Players Feeling Heat From Crystalline Silicon Competitors
Thin-film solar developers are learning to play the offense and defense these days.
This sentiment set the tone for the first day of a conference in SanFrancisco Tuesday that focused on thin-film solar technologies, whichuse little or no silicon to produce solar cells.
These companies have been forced to refine and perhaps revise theirsales pitch as they face an unexpected and strong competition frommakers of crystalline silicon cells and panels.
"Thin films need to use every advantage to bring electricity costsdown and compete with crystalline silicon technologies," said ChristianKoitzsch, a managing director of Bosch Solar Thin Film in Germany, atthe Thin-Film Solar Summit in San Francisco Tuesday.
Koitzsch noted a reverse of a trend: Project developers andinvestors who might have given thin films serious consideration havebeen choosing crystalline silicon solar panels for large,ground-mounted installations instead over the past year.
It’s a phenomenon that happened rather quickly. In the past year,prices for crystalline silicon solar panels worldwide have plummeted asmuch as 50 percent as the recession tightened its grip and Spain, whichwas the largest market in 2008, experienced a sharp cut in governmentsubsidies and intensified competition in countries that offered moregenerous incentives.
For thin-film companies, clawing for a bigger slice of a market thatis dominated by crystalline silicon solar companies is nothing new.Thin films have been in the minority because many of these companiesare developing new technologies and have only recently begun commercialproduction.
Crystalline silicon solar panels are able to convert a higher rateof sunlight that falls on them into electricity than thin films. Theefficiencies for crystalline silicon panels mostly hover in themid-teens, though SunPower in San Jose, Calif., is producing panelswith just over 19 percent efficiency.
The numbers are in the low teens for thin films – many companies arestill working on jumping over that 10 percent hurdle. But thin-filmdevelopers say the materials they use could produce more electricityunder low-light conditions, and their manufacturing costs could belower.
But the price war presents a big headache, and has prompted thebiggest thin-film company, First Solar, to offer rebates in Germany,its largest market, to fend off crystalline silicon opponents (see First Solar Fears Competition From Silicon Panel Makers).
First Solar is better armed to spar with those competitors than mostother thin-film companies, however. The Tempe, Ariz.-based publiccompany is the one and only large thin-film company, and it had builtup a massive manufacturing operation by the time the market demand forsolar slackened.
With roughly 1-gigawatt of production capacity, First Solar is ableto keep manufacturing costs low. In fact, it claims to be able to makesolar panels cheaper than anyone. The 11 percent average efficiency forits cadmium-telluride solar panels also serves as a benchmark for otherthin film companies.
"First Solar shows that after a critical mass in terms ofproduction, you can demonstrate certain advantages," said JoeArmstrong, CTO of Ascent Solar Technologies, a Thornton, Colo.-basedcompany developing copper-indium-gallium-selenide solar panels.
Ascent has a 3-megawatt pilot line, and plans to open a 30-megawatt factory in early 2010.
"We see 30 megawatts as the first demonstration of a high-volumescale manufacturing," Armstrong said. "Ten- to 30-megawatt capacitywill not be sufficient to compete in cost sensitive markets."
Currently, the average selling price for crystalline silicon panelsare roughly $2 per watt, and thin films need to be 25 percent cheaperto compete, said Paula Mints, the head analyst at Navigant Consulting,at the conference.
Mints’ assessment didn’t convince Chris Beitel, managing director ofSunFab products at Santa Clara, Calif.-based Applied Materials.
"I absolutely disagree with that," said Beitel during a paneldiscussion at the conference. He said panel pricing is just one factorin determining the costs of installing a solar energy system. Thin-filmdevelopers and their customers could shave expenses in labor andmaterials for other components in the system, Beitel said.
With First Solar continuing to show sales, thin films shouldcontinue to expand their market share in the next few years, analystssay. A few startups have announced multimillion-dollar contracts overthe past year. For example, Fremont, Calif.-based Solyndra, a CIGScompany, has inked over $2 billion worth of contracts.
Thin-film shipments accounted for 11 percent of the global market in2007 and 14 percent in 2008, Mints said. That share could reach around25 percent in 2009.
Thin-film manufacturers collectively doubled their productioncapacity from 925 megawatts in 2007 to 2,015 megawatts in 2008,according to GTM Research. GTM Research expects the capacity to jump to4,330 megawatts in 2009.
Manufacturers typically don’t run their factories around the clockat full capacity, so the amount they actually churn out tends to belower.
Thin-film companies are likely to produce about 2,760 megawatts this year.
Photo via Bosch.
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