The Case For Thin Film Solar

July 15, 2010

Thin-film cells are sometimes viewed as the unloved stepchildren of the solar industry.

Low efficiencies, unattractive yields and technical manufacturing hurdles slowed the industry’s expansion. Plunging crystalline silicon prices last year made competing even tougher.

Vendors and suppliers see module costs falling to 75 cents a watt and below.

Still companies hold out ambitious hopes for the future – and for costs to reach to 75 cents a watt and below in the next couple years. Prices this low should improve thin film’s market position versus crystalline module makers, such as Suntech Power Holdings and SunPower, especially for large-scale utility deployments.

Thin-film leader First Solar sets the benchmark. The company’s cadmium-telluride modules achieved 11.1 percent efficiency in the first quarter of this year and at a cost of 81 cents a watt. The company holds a market leading 18 percent share of the solar module market.

But competitors and suppliers say they see a path beyond this leader and expect to arrive there in the not too distant future. According to John Patrin, director of business development and product marketing at equipment supplier Veeco, a module with 12.5 percent efficiency and a cost of 75 cents a watt is possible.

The biggest way to improve cost per watt is to drive up efficiency, he says.

Liyou Yang, the former head of thin-film research at BP Solar and now the chief executive of Astronergy in China, hopes to outdo this. He sees an opportunity to reduce costs to 71 cents a watt as soon as this year, aided by a jump in production volumes. Yang said at the Intersolar conference that his goal is to expand thin-film manufacturing to 75 megawatts by December, more than double last year.

Breaking the 70-cent level is “what we are driving to achieve,” he says. To accomplish that, Astronergy expects 9.7 percent efficiency by the end of the year and says 12 percent in commercial volumes is possible in 2 to 3 years. If this is becomes a reality, “we will at least put thin film on a viable path,” he says.

Such a path means enhanced competition with crystalline cells. There is a growing conviction that crystalline silicon modules will fall to $1.05 or $1.06 a watt, but no further. Modules need to fall to $1 a watt to compete head-to-head with electricity from coal without government subsidies.

Clearly, though, the industry has a lot of convincing to do. Venture investing in thin-film start-ups dropped sharply in 2009 and 2010, and decision makers appear hesitant to reverse the trend.

In a Perspectives piece published just last month on Greentech Media, clean-tech investor Vinod Khosla offered a downbeat opinion of the industry. “Most current thin-film start-up efforts do not appear differentiated enough to justify the hundreds of millions invested in them,” he said.

The challenge for entrepreneurs will be to prove him wrong.

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Posted by Mark Boslet

Innovalight To Double Silicon Ink Efficiency

July 14, 2010

Innovalight boasts that it will be able to double the solar potency of its nanocrystalline silicon ink as soon as next year.

By 2012, additional improvements should push the efficiency of a mainstream crystalline solar cell using the ink to above 20 percent.

Conrad Burke, chief executive of the Sunnyvale, CA, company, said the company’s silicon ink today adds 1 percentage point to the efficiency of a mainstream solar cell. So a cell that is 18 percent efficient jumps to 19 percent.

Next year, the ink will add 2 percentage points to overall efficiency, and in 2012, the target is 3. That should push the 18 percent crystalline cell to 20 percent next year.

The company expects to see this level of efficiency in its labs this year, Burke said at the Intersolar conference in San Francisco.

Such a boost should interest solar cell makers fighting for each tenth of a percentage point gain – and challenge efficiency leader SunPower. SunPower’s cell design is more complex than others and may not easily lend itself to a silicon ink.

Innovalight’s silicon ink is made up of silicon particles 5nm to 10nm in size. It is applied using the screen-printing technology typically used by semiconductor lines during back-end metallization.

When applied to solar cell production, screen-printing becomes a front-end process, and a relatively simple one, says Burke. Pattern alignment is not complicated.

Burke said prices for the printing tool have fallen to about $400,000. For this reason, don’t be surprised to see 20 percent efficient solar cell coming out of China sooner rather than later.

Already, Chinese solar cell maker JA Solar Holdings has latched onto the technology. The company this week announced a three-year contract with Innovalight and said its Secium cells would use the technology.

The cells are in pilot production and have achieved 18.9 percent efficiency.

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Posted by Mark Boslet

SunPower Builds 24% Cell As Solar Market Shifts Underfoot

June 23, 2010

In the Mexican standoff that is the long-standing U.S.-China currency debate, the outcome for the solar industry is difficult to predict.

But one thing is clear. The changing landscape could shift the axis of the solar market over the next year or two as price declines moderate and advanced technology plays a bigger role in buying decisions. With this change as a backdrop, SunPower said Wednesday it successfully built a solar cell with a 24.2 percent market-leading efficiency.

Sunpower says new cell sets record for large wafers. Meanwhile, a rising Chinese currency could change the solar landscape.

The Chinese blinked in the currency debate last Saturday and vowed to permit more market flexibility in the pricing of the renminbi. But after several days of very minor, carefully orchestrated increases, the promise seems to lack short-term monetary firepower.

The most optimistic of analysts predict gradual appreciation in the under-valued Chinese currency over the next several months. The most skeptical observers have begun calling for legislation to combat “currency manipulation” and the artificially low exchange rate.

The implication for clean-tech companies, particularly solar panel makers, is profound. A more expensive Chinese renminbi will raise the cost of what some in the industry consider subsidized, below-market solar panels coming from the country. (Besides being low priced, there are claims some of these panels are low quality as well, failing after a couple years of use.)

In a research note, Wall Street analyst Edwin Mok at Needham said a stronger Chinese currency will result in higher priced panels – or at least a slowing of price declines. This in turn could reduce worldwide demand.

But while Chinese companies might see lower profit margins (or higher losses), companies in the United States and Europe could see benefits. These firms, including SunPower and First Solar, would no longer have to compete with excessively cheap Chinese labor.

In this shifting market place, the race to higher efficiency cells could gain in importance. SunPower said its new cell set a record verified by the National Renewable Energy lab for large silicon wafers.

It did not say when it expects to see 24 percent efficient cells in the market. But the company does seem to be maintaining its lead over rivals, such as JA Solar, with laboratory cells now at 18.5 percent, and Suntech, which is struggling to get its new 19 percent efficient Pluto cells to the market.

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Posted by Mark Boslet

Suntech Stumbles With Pluto

June 3, 2010

Suntech Power Holdings said Thursday it has run into difficulties making its high-efficiency Pluto solar cells, raising the possibility of a delay in this next-generation technology.

The Chinese solar giant said the problems arose in ramping manufacturing beyond its present monthly pace of 4 MW. As a result, the company said it decided to maintain this relatively modest production level – probably two factory lines – until it works out the technical kinks.

The move is a blow for Suntech as it begins to transition to this key technology and catch more efficient solar developers, particularly mass-market efficiency leader SunPower. It also could be a setback to Suntech’s hope of pushing Pluto beyond it present 19 percent average efficiency to a 20 target.

Like the distant planet, Suntech's Pluto remains a difficult target to reach

On a first quarter conference call with analysts, Suntech Chief Technology Officer Stuart Wenham described the hang-ups as “small glitches” common when transferring a new technology to large-scale module production.

“In the course of ramping Pluto production to levels well above the current 4 MW a month, we have identified process control challenges to module production,” Wenham said. He added: “We have gained a great deal of experience since we began producing commercial quantities of Pluto cells.”

Suntech says it remains pleased with the cell’s performance and claims nothing is wrong with the Pluto design. Yet Pluto’s average mono-crystalline cell efficiency remains at 19 percent, with the best yielding cells reaching 19.5 percent. Both are well above the market average of 17.5 percent, but the company first achieved 19 percent efficiency as far back as early 2009.

Suntech is “fully confident Pluto will become our core product and the industry benchmark for high-performance and cost-effective solar panels,” Wenham says.

The Pluto design is based on the PERL, or passivated emitter with rear locally diffused, technology developed at Australia’s University of New South Wales, where efficiencies of 25 percent have been achieved in the laboratory. It has low reflectivity to capture more sunlight and thinner metal lines to reduce shading.

While the technology remains promising, Suntech said in a difficult to interpret announcement that it recently began a new solar research initiative with the University of New South Wales and Silex Solar to improve the efficiency and cost of cells. The research received a $5 million grant from Australia. The company also kicked off a collaborative effort with Swinburne University of Technology on nanoplasmonic cells. Suntech describes both efforts as complementary to its work with Pluto.

Because of its high efficiency, Pluto commands a premium price in the market and customer demand appears to be high.  Yet production is far from the 450 MW Suntech plans for the middle of its fiscal year. When the problems are resolved, the company promises production will increase rapidly and engineers are reportedly convinced they can meet the target.

On the conference call, Suntech said a weak Euro contributed to a 14 percent fall in average product prices in its first quarter. The prospect of continued weakness led its shares down 3 percent.

Suntech does 68 percent of its business in Europe.

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Posted by Mark Boslet

Solar Market Is Hot Even If Stocks Are Not

May 12, 2010

Solar sales continue to surge in advance of Germany’s cut in its feed-in tariff. But stocks did not follow suit, as if anticipating difficult times ahead.

Several of the industry’s largest manufacturers offered insight into their businesses this week – and the news was generally favorable. Sales rose sharply over the past three months, even if profits sometimes did not.

SunPower unveiled its Oasis solar power plant in a box, along with 64 percent quarterly sales growth

Among the companies with the strongest gains was SunPower of San Jose, where quarterly revenue rose 64 percent, helped by the company acquisition of SunRay. The company said Tuesday it wasn’t able to meet demand for its products. However, earnings fell short of expectations.

“We were sold out in the first quarter,” said CEO Tom Werner. “We remain sold out in the second quarter.”

SunPower was to be outdone. Chinese solar king Suntech Power Holdings surprised investors with a quarterly revenue forecast of close to $590 million, well ahead of the $542 million analysts expected. And JA Solar Holdings, another Chinese polysilicon cell maker, topped expectations for its first quarter, with sales up 17 percent. The company foresaw more upbeat times and raised its outlook for the year.

LDK Solar and ReneSola, both of China, and Q-Cells of Germany also unveiled impressive sales increases, with previously struggling ReneSola posting quarterly sales that almost doubled.

The wave of favorable reports suggests that Germany remains a strong buyer of solar equipment in anticipation of the July cuts. Sales also were strong in the United States, France and Italy.

SunPower’s Werner predicted panel prices would fall by as much as 20 percent this year, but that demand across the world would remain steady.

SunPower on Tuesday also announced its Oasis “power plant in a box,” a prepackaged solar module assembled into large solar farms. The modules will reduce plant costs up to 25 percent and simplify construction, said Werner. Oasis is expected in the market in early 2011.

Despite the upbeat sales figures, solar stocks turned in a dull performance on Tuesday. After rallying on Monday, when Suntecb and LDK released their financial reports, many drifted lower. SunPower shares fell 4 percent after its earnings were released.

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Posted by Mark Boslet

Solar Companies Turning To Outsourcing

April 23, 2010

SunPower’s pact to create a Silicon Valley factory with contract manufacturer Flextronics International is more than just a deal to better supply West Coast solar installers.

It is a sign that just like the computer industry before it, the solar business is increasingly turning to outsourcing for panel assembly and other production.

Flextronics, one of the world’s largest contract manufacturer, will produce 75 MW of panels annually for California-based SunPower. The opening of the plant in Milpitas should create 100 jobs. It isn’t the first outsourcer SunPower has hired. The company last year hired Jabil Circuit also for panel assembly.

Solar panel outsourcing should quadruple in two years, says iSuppli.

Outsourcing has taken root elsewhere in the industry. Enphase Energy of Petaluma, CA, also employs Flextronics, of Singapore, to make solar investers, and Evergreen Solar uses China-based Jiawel to make panels. BP Solar backed away from its internal panel production last year.

According to market researchers iSuppli, the SunPower-Flextronics deal represents the early stage of a boom in solar panel contract manufacturing. It is the beginning of a trend that will parallel the electronics market outsourcing of the 1990s, says Chief Research officer Greg Sheppard.

Contract manufacturers will make 1.1 GW of solar panels this year, up 200 percent from 2009, projects iSuppli. The output will nearly quadruple to 4.1GW by 2012.

This expansion will follow the growth of the solar market. “Solar panel makers now are running their factories at 90 percent of capacity, straining their capability to meet demand,” says Sheppard.

SunPower, which makes premium-priced, high efficiency polysilicon solar cells, says the Milpitas factory will help it to more cost effectively distribute in the western U.S., one of its biggest markets. It is a time to market decision.

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Posted by Mark Boslet

California Solar Market Shows Strength In 1Q, But Financing Hard To Get

April 5, 2010

California’s solar panel market showed solid growth in the first quarter of the year, but financing remained hard to get for many homeowners.

Solar installations were up 43.5 percent in the first quarter in California.

California’s market is the most developed in the U.S. and steady growth here is a signal that other markets, particularly New Jersey and Florida, could follow suit.

According to an analysis of data from the state-funded California Solar Initiative, solar installations in the state rose 43.5 percent in the three months. This comes despite declining state incentives, says FBR Capital Markets analyst Mehdi Hosseini, who crunched the numbers. The greatest growth was in the San Diego area, where installations have lagged northern sections of the state.

And yet, applications for new residential solar systems were soft, increasing just 28 percent. The soft economy and the difficulty with higher credit requirements explain the weakness, says Hosseini. Large commercial projects also suffer from a lack of credit, continuing a trend from last year, he said.

On the other hand, utilities such as PG&E have shown an appetite to finance residential projects, as have some banks, such as U.S. Bank, suggesting a change a foot in financial markets.

SunPower continued to be the largest seller of modules in California. However, China’s SunTech took over the number two spot from Sharp. On the whole, SunPower, Sharp, Japan’s Kyocera, and number one worldwide solar cell maker First Solar all lost share as Chinese and other Asian module makers shifted their focus from Europe and channeled low-price product to California and the U.S. market.

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Posted by Mark Boslet

Solar Arms Race Heating Up

March 19, 2010

Interest in the solar market is on the rise. But the industry is finding it difficult to know which solar technology will win in the long run: thin film or polysilicon.

Two days ago, manufacturing powerhouse GE placed a big bet on the business, promising to develop a line of low-cost cadmium telluride thin-film cells to rival those of solar leader First Solar.

Polysilicon has the efficiency title but GE wouldn't have chosen thin film without a good reason

Late Thursday, polysilicon maker SunPower fired back. It boasted of record efficiencies in its cells: 20 percent in the market now and 24 percent under development.

The arms race is off to a full sprint. The trade off is greater efficiency versus lower price. As long as polysilicon, or crystalline, cells keeps making efficiency gains, the price advantage of thin film can be kept at bay. But as the price of thin film falls, the pressures rise for crystalline efficiency gains.

SunPower CEO Tom Werner says he sees an increasingly competitive market. But he says he has no increase in shifting to thin film. There are several good reasons. For one, fewer polysilicon cells are required on a rooftop to generate the same amount of power.

SunPower is pushing hard on efficiency. Werner says the first 24-percent cells were made in the fourth quarter, besting the 20 percent efficient cells in production now. The company also has the key $1 a watt manufacturing target in its sights for 2014. Today’s cost is just under $2.

SunPower may have a technology lead over Chinese makers. But they, too, are pushing the efficiency dial. Suntech now produces at 19 percent with improvements under developmet. JA solar in February said 18.7 percent efficiency was in its labs.

Thin-film companies aren’t running scared. The race is on in earnest to produce the least expensive, most efficient cell, says GE. With that in mind and “after having completed an exhaustive survey of the PV landscape, we determined that thin films were the optimum path,” says GE’s Danielle Marfeld.

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Posted by Mark Boslet

SunPower Offers A Downbeat View Of Solar Financing

March 18, 2010

SunPower shed the uncertainty of its accounting probe on Thursday, but said financing for solar projects continues to be difficult despite the improving global economy.

SunPower sees solar cell prices falling 20 percent in 2010.

The company maintained that its relationships with banks held up well even after the news spread in November of the financial mishaps it discovered at its Philippines division. But it revealed that the difficulty getting funds for solar projects would push sales to the second half of 2010 instead of the first and second quarters.

The comments cast a continued pall over the solar business, both in the U.S. and Europe, where revenue has been strong in countries such as Germany, Italy and France.

SunPower said in response it would consider using its balance sheet to secure money for big projects, something it hasn’t done in the past. The company has $925 million in cash to use.

What’s more, it suggested prices for solar cells would continue to slide – by more than what other solar companies have projected. Prices should fall about 20 percent this year.

The company’s downcast assessment of the market came as it released fourth quarter earnings. Profit margins suffered, but sales were solid, suggesting an improving market, with growth continuing in Germany, France and Italy before cuts in feed-in tariffs take hold.

SunPower said the probe of its Philippines unit turned up fraudulent accounting entries from personnel there and forced it to reduce 2008 and 2009 profits by $17 million.

As to the banks, “they stuck with us,” said CFO Dennis Arriola. But they held off signing financing deal on solar farms in the fourth quarter and would continue to do so in the second quarter. In an already difficult market, that is not good news. SunPower stock slipped another 10 percent.

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Posted by Mark Boslet

JA Solar Claims Breakthrough In Solar Cell Efficiency But Still Finds Itself Behind

February 11, 2010

JA Solar excels in mass-producing low-cost solar cells. It now hopes to improve the quality of its products.

The Chinese manufacturer claimed Thursday that it achieved a breakthrough in its labs: cells with 18.7 percent efficiency at turning sunlight into electricity.

That’s an improvement of a full percent or more over its commercial products today. But it still trails some of the leaders in the business, SunPower’s 22 percent (on its way to 23.4 percent), for instance. And it just matches the 18.5 percent cells Kyocera has in the market.

The announcement underscores the continued tension in the industry between low cost and high efficiency. There are some who believe Western companies still have a technical leg up over China’s producers. But the lure of high volume and low cost is a big driver of demand.

Low cost v. high effiiciency continues to define the battle lines in the solar industry

In the fourth quarter, for instance, JA Solar said sales exceeded what the company was able to manufacturer. As a result, it anticipates increasing production capacity to 1.1 GW of solar cells by the end of the year and expand module assembly to 300 MW.

The company also lifted its sales projections.  “The demand for our products continues to exceed our ability to produce (them),” says CEO Peng Fang. All this while cutting prices and costs, achieved in part by JA Solar’s decision to begin making its own polysilicon wafers.

As to the “breakthrough” technology, the company expects to have large volumes of the mono-crystalline cells available by the end of the year, says Fang.

The dichotomy in the solar industry reminds me of the old Miller Lite commercial where brain dead beer drinkers yell at each other across the bar: great taste, less filling. The solar business is having its own product debate: low cost v. high efficiency. It will be interesting to see who wins.

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