THIN FILM SOLAR PANELS

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Will 2012 Belong to Solar Power

Changing government policies have not been kind to renewable energies over the past two years, and both solar and wind energies are heavily dependent on subsidies. 2010 was a tough one for the wind business, with government support declining markedly, thus affecting demand. In 2011, demand and pricing stabilised for wind, but solar energy experienced what may be the worst year in its history. 2012 will be marginally better for solar, but only marginally.

Fortunately, over the long term, there will be place for both these technologies in a country’s energy portfolio. Wind power is already economic in terms of cost per watt, but its output curve doesn’t match the consumer demand curve very well. Therefore, its energy storage technology has to improve. Solar’s output curve closely matches demand in most countries, but its cost per watt has to get a whole lot better.

So, what happened to solar energy? Subsidies were under pressure, particularly in the large European markets. Demand in the US did not pick up as anticipated, adding further pressure. Then, there was an incredible amount of overcapacity in the solar industry, leading to cut-throat competition, (pushing) prices down. The last thing to happen was the fall in the price of polycrystalline silicon, which crashed to $38-45 a kg. You would think that the declining raw material cost would help the profitability of an industry. But, in this case, the decline was so great that it upset the underlying economics.

The long-term, average price of electronic grade crystalline silicon is $45 a kg. There have been troughs — $25 a kg in 2002 — and peaks — $450 a kg in 2009. Adding polysilicon capacity is expensive and, because it’s nearly impossible to marginally increase output, adding capacity shocks the supply-demand balance. The industry swings between periods of ‘feast and famine’ but what was unusual this time was that instead of the semi-conductor industry driving the economics, it was the solar industry.

A lot of manufacturers in the solar value chain based their strategies on the high price of silicon that existed in 2008 and 2009. But when the prices of polycrystalline silicon fell, all those projects became unviable. Almost 80 per cent of global solar panels are based on some kind of metallic silicon technology. The remainder uses thin film technology. Most thin film companies had come up to provide a substitute to the expensive polysilicon and had based their plans on the price of silicon remaining at $100, $200 or even $400 a kg. When the price of polysilicon crashed, they lost their reason for existence.

So, there was reduced demand because of lower government subsidies, massive overcapacity among the silicon-based manufacturers, and a surfeit of new, thin film manufacturers. A perfect storm.

I have never been an advocate of large solar farms that have to distribute power over the main grid. Solar electricity is perhaps the most expensive in terms of dollars per watt. Solar power itself can cost between 12 and 16 cents a kilowatt-hour. This is comparable to what an individual in California pays for the grid power at about 20 cents a kilowatt-hour. But this is the cost of solar power at the point of manufacture. When you create a solar farm and try to distribute it over hundreds of miles, it just becomes too expensive. Without heavy subsidies, a solar farm that mimics a centralised generating system is absolutely uneconomical. Some subsidy is okay, but basing an industry on long-term continuing subsidy is not a good idea.

Don’t get me wrong. Solar can be a perfect solution for a village that hasn’t been touched by electricity. Put up a small solar farm and create a local grid to supply power. But don’t try and run the power over the main grid.

An efficient coal plant may cost 2.5 cents a kilowatt-hour (kWh); a nuclear plant is 4-6 cents a kWh; wind power can be 5-7 cents per kWh, and solar at least double that. And, of course, wind and solar output are both governed by nature. The flip-side is that both are zero-carbon, renewable power sources that don’t depend on imported energy sources. Most countries will want to use both in some measure.

Thin Film Solar Firms Confident Despite Industry Challenges

A year after a U.S. senator said northwest Ohio’s solar-panel industry was helping the state to become known as “the Silicon Valley of clean energy,” industry experts predict the global industry will undergo a major shakeout that will break all but a handful of solar panel producers worldwide.

The bold forecast raises questions about the future of the Toledo area’s three panel makers, with one more coming next year.

Each of the firms with local operations — First Solar Inc., Xunlight Corp., Willard & Kelsey Group LLC, and, building a plant in Napoleon, Isofoton North America — contends it makes a particular type of panel that is in demand and is competitively priced, so it will survive any industry consolidation.

The chief executive of China’s Trina Solar Ltd., the world’s fifth-largest solar panel maker, predicted recently that by 2015 two-thirds of the industry’s solar-related companies will face mergers, acquisitions, or bankruptcy.

And by 2020, Jifan Gao said, just 15 solar firms will be left — five each in of three major segments: photovoltaic (solar) panels, solar energy-absorbing wafers and ingots, and production of raw materials such as polysilicon, the most commonly used material in solar panel manufacturing.

Jeffrey Pichel, an industry analyst at Jefferies & Co., has forecast a consolidation of the industry for three years.

“It’s not so revolutionary an idea,” he said. Already, three large U.S. solar companies — Solyndra LLC, Evergreen Solar, and SpectraWatt — have gone bankrupt. A fourth, BP Solar, halted manufacturing in the spring.

Fitch Ratings Ltd. said recently that solar power companies are likely to encounter tough conditions for their public stock, and First Solar, the world’s largest maker of thin-film panels, said competitors are “desperate” to sell inventory after adding too much factory capacity, leading to a supply glut.

Industry pressures

Industry pressures have affected the existing three. First Solar has cut its sales and margin forecasts to reflect slower demand growth and stiffer competition.

Xunlight laid off 30 employees in May after an Italian firm delayed payment on a panel order.

Willard & Kelsey planned to have two production lines and 250 workers by now, but an executive said the poor economy and slow demand have hindered financing for a second line.

Xunming Deng, chief executive at Xunlight, said, “We will be one of those survivors. Our products are unique and different and we’re starting at a much more premium price.”

Tom Kimbis, vice president of strategy and external affairs for the Solar Energy Industries Association, which has 1,100 member companies, said intense competition will produce failures, mergers, acquisitions, and bankruptcies.

Still, there will be newcomers to the industry, he said, adding,

“The Internet didn’t shut down because Netscape disappeared.”

Different technology

Existing Toledo area solar firms differ from others globally by technology.

First Solar, Xunlight, and Willard & Kelsey all make thin-film solar panels, a relatively small segment of the overall industry.

In thin-film production, solar energy-absorbing coatings are applied directly onto a glass panel.

Conventional panels, which dominate the industry, use energy-absorbing wafers that are attached to a panel, making them heavier than thin-film modules.

Xunlight’s modules are flexible. Mr. Deng, the CEO, said last week that his company had a setback this year but it is still selling product and just received a payment up front from a European buyer for 100 kilowatts of panels.

“We are enjoying the premium price on the flexible process we use … and that is why we believe we have a bright future,” he said.

Willard & Kelsey’s Mr. Cicak said solar is “going to be the cheapest form of electricity, and it’s going to continue to get lower in cost.”

GE to Make Thin Film Solar Panels

Light materials: Cadmium telluride, a semiconductor that’s good at absorbing light, can be used to make inexpensive solar panels.
Credit: GE

Energy

GE to Make Thin-Film Solar Panels

Its entrance to the market could help make solar power cheaper.

• Wednesday, March 24, 2010
• By Kevin Bullis

Audio »

GE has confirmed long-standing speculation that it plans to make thin-film solar panels that use a cadmium- and tellurium-based semiconductor to capture light and convert it into electricity. The GE move could put pressure on the only major cadmium-telluride solar-panel maker, Tempe, AZ-based First Solar, which could drive down prices for solar panels.

Last year, GE seemed to be getting out of the solar industry as it sold off crystalline-silicon solar-panel factories it had acquired in 2004. The company found that the market for such solar panels–which account for most of the solar panels sold worldwide–was too competitive for a relative newcomer, says Danielle Merfeld, GE’s solar technology platform leader.

As you may have heard, solar power is well on its way to rivaling coal and other traditional energy sources. In fact, costs are set to drop significantly in the next year or two. So the question becomes, which type of solar panel technology should you invest in? Which material is cheapest, and how efficient is it? The answer, friends, is thin-film solar. And its efficiency climbs every day.

Thin-Film Solar Panel Systems

Thin-film solar is hot. Many people find the sleek, paper-thin design more aesthetically pleasing than bulk solar, and it allows for all kinds of amazing building-integrated photovoltaic (BIPV) applications. Thin film is what makes it possible for solar to be coated on the facade of a building, for example, built into portable electronics or integrated discreetly onto window shades.

And advancements continue to emerge. Last month, thin-film solar cells made from copper indium gallium selenide (CIGS) reached an astounding 18.7% efficiency in laboratory tests. Using CIGS for thin film is ideal, but has yet to be implemented on a large scale.

So how much can you expect thin film to cost per watt? According to the NREL and Department of Energy:

“Costs are expected to drop to below $100/m² in volume production, and could reach even lower levels—well under $50/m², the DOE/NREL goal for thin films—when fully optimized. At these levels, thin-film modules will cost less than 50 cents per watt to manufacture, opening new markets such as cost-effective distributed power and utility production to thin-film electricity generation.”

Thin film is the technology to watch for in coming months. My guess is it paves the way for high-efficiency solar panels, ultimately driving costs down and solidifying the nationwide uptake of solar power we all know is overdue.

Sharp is better know for its other products, of course, but this technology giant is gaining more and more of a solar energy presence. To up its clean energy focus, it recently bought 100% of Recurrent Energy stock for $305 million. Sharp is now planning to have Recurrent Energy lead its solar generation work.

“Recurrent Energy’s expertise and relationships will help Sharp become a total solutions company in the PV field, extending from developing and producing solar cells and modules to developing and marketing solar power generation plants,” Sharp’s executive vice president in charge of overseas business, Toshishige Hamano, said.

Recurrent Energy reports that it has about 2GW of solar energy projects in the pipeline and 330MW of contracted projects, most of which are in North America, including a 170-megawatt contract with the Ontario Power Authority, a 60-megawatt contract with the Sacramento Municipal Utility District, and 50-megawatt contract with Southern California Edison.

Even being a complete subsidiary of Sharp, though, Recurrent Energy says that it will make sure to provide the right equipment for each job and at a good price by using a “variety of vendors” — the company has bought from solar giants such as Suntech Power, Yingli Green Energy, and SolarWorld in the past. But I’m sure Sharp, one of the largest solar panel manufacturers in the world, will get at least a little more solar technology business out of this deal.

Recurrent Energy has announced that it will be keeping its executive staff and its own name and views this purchase as an empowering change more than anything else.

“We are really spreading our wings with strategic support from Sharp,” CEO Arno Harris said when the deal was first announced a couple months ago.

Photo Credit: Eleventh Earl of Mar via flickr (CC license)