What is Oerlikon Solar Doing So Well?
Even as there’s a bit of turmoil in the Applied Materials SunFab amorphous silicon group, Oerlikon, a company also building a turn-key factory for solar, might be seeing strongresults both technologically and commercially.
I spoke withOerlikon Solar’s head of market development and government relations for North America, Chris O’Brien. He claimed that Oerlikon has been usingthe slow period in the market as an opportunity to drive down cost inits product. He believes that the firm is on a path to drive down thecost of production to $.70 per watt with their "micromorph" dual layerproduct. (Mike Miskovsky of Canadian Solar referred to the recentdown market as "Solar in the time of cholera" TM.)
In O’Brien’swords, "By the end of the year we’ll be offering our customers amanufacturing plant design that will put them in a position to competewith First Solar, the industry’s cost leader." O’Brien’s not a newcomer to the field. He’s worked at utility AES, Sharp Solar and was also the chairman of SEIA (Solar Energy Industries Association).
So, how is Oerlikon doing better with this product than semiconductor and materials master Applied Materials?
According to O’Brien, Oerlikon has been down the cost-reduction roadin other industries and their engineers are not intimidated byaggressive cost reduction targets. O’Brien cited cost reduction through constant improvements in productivity at each manufacturing step withless material and faster throughput. They’re looking to reduce capexand opex, and to accelerate evolution in their PECVD tool.
In addition, Oerlikon has pioneered the commercial introduction ofcomparatively higher efficiency tandem-junction thin film silicon withup to 50 percent higher efficiency than single junction amorphous.
But Applied has to be running that race, as well. Applied is noslouch in the Moore’s Law cost-reduction contest. Indeed, they’ve beenthe driver of Moore’s Law for decades in the semiconductor space.
In O’Brien’s words, "The race is to see if we’re competitive with the crystalline suppliers." According to O’Brien, Oerlikon manufacturinglines are operating in China (2), Taiwan (2), Germany (4), Spain, andSwitzerland. None are yet in operation in the U.S.
So what is Oerlikon doing differently?
Oerlikon might have a bit of an advantage in efficiency due to atechnology choice in transparent conductive oxide (TCO). Oerlikon Solar uses a Zinc Oxide (ZnO) TCO applied with a LPCVD process that isoptimized for increasing light capture and is integrated into Oerlikon’s turnkey lines. Applied is still using a PVD-based Tin Oxide (SnO)TCO.
From a business standpoint, Oerlikon’s O’Brien sees the big challenge right now as a "volatility in the price forecast for crystalline andthin-film modules, making it more challenging for new thin filmmanufacturers to get financing." He also sees that "Business has beensteered to Asia because of lack of U.S. capital, although he notes thatthere is strong interest in Ontario with a large domestic requirementand an aggressive Feed-in-Tariff." And adds, "We’re hopeful for several projects in the U.S. that will be finished but still are awaitingcompletion of financing, including ARRA funding."
O’Brien notes that there is growing support for legislation later in2010 that will extend and expand the ARRA provisions for U.S. solarmanufacturing, which will help potential Oerlikon customers seeking todevelop new tandem thin-film manufacturing plants in the U.S.
Achieving low module cost-per-watt and low capex cost-per-watt isdifficult with any solar technology and perhaps even more so with lowefficiency a-Si. Competing against Applied Materials is also achallenge — no one should underestimate the capabilities of that firm.But Applied is not the real competition here. Instead, it’s First Solarand a score of low-cost c-Si companies. And Oerlikon is going to have to overachieve at execution and R&D to keep up with those pacesetters.
In the view of GTM Research Solar Analyst, Shyam Mehta, "Amorphoussilicon’s long-term future lies in the commercialization and adoption of tandem-junction technology. First movers in this space (Sharp,Oerlikon customers) have a distinct advantage." (See Mehta’s recentreport, Thin Film 2010, Market Outlook to 2015.) Mehtaadds, "When it comes to single- and tandem-junction technologies,Oerlikon emerges as the clear efficiency leader in the field: four ofthe top six single-junction and five of the top seven tandem-junctionfirms use its manufacturing equipment."
But Mehta cautions, "Oerlikon suggests that its current costs arearound $1 per watt, and that a further 30% reduction would be achievedby the end of this year. However, it is difficult to believe that anyOerlikon customer has actually achieved a cost of $1 per watt inpractice, given the small plant sizes and expected low capacityutilizations evident through 2009. Therefore, when it comes to actualproduction costs, the 70-cent-per-watt target may be somewhatoptimistic, especially given the lead-time required for construction and ramp-up."
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