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Crystalline silicon PV makers continue tough market fight with thin film tech
Credit: SunPower.
It doesn’t appear anyone is making a lot of money in the solar power arena, but the players — working in different camps based on the materials they use — seem to positioning for a strategic victory based on cost and market share rather than performance.
For example, in a new report from Lux Research, the tech market research firm say that makers of crystalline silicon photovoltaic modules are outperforming thin-film module makers (e.g., those that use thin-film silicon, cadmium telluride and copper indium gallium diselenide) in lowering production costs and taking more market share.
That’s not news to Solyndra, a CIGS-based maker cylindrical PV units that I have written about in the past. Solyndra, which received in March 2009 a $535 million DOE loan guarantee to open a second and more efficient production plant in California, recently announced that would shut its first plant, delay construction on the new one and lay off 190 workers.
Lux indicates that all PV manufacturers are frantically working to “minimizing costs and maximizing performance to maintain profit margins,” but notes that advances in silicon technology and dropping prices for polysilicon feedstocks are aiding crystalline silicon module makers. Lux says many thin film makers are “are under the gun to improve margins or face extinction.”
The report, “Module Cost Structure Breakdown: Can Thin Film Survive the Crystalline Silicon Onslaught?” focuses on how multicrystalline silicon makers (80% of the crystalline silicon market) fare on a dollar-per-watt basis against TF-Si, CdTe and CIGS. Lux, in particular, details projections of cost-of-goods-sold for each technology through 2015.
“Crystalline silicon is dominant by volume and remains the cost/price benchmark for solar modules. Cadmium telluride is limited in efficiencies, but is the absolute leader in cost. We project these two technologies will continue to be highly profitable,” said Ted Sullivan, a senior analyst for Lux Research, and the report’s lead author. “The profitability of thin-film silicon is much dicier.”
Despite the difficulties facing Solyndra, Sullivan says, “[C]opper indium gallium diselenide is positioned to outplace crystalline silicon in profitability by 2013 as leading developers improve process stability.”
Here are some of the points Lux highlights (from their press release):
· Multicrystalline silicon remains highly profitable as COGS decline. The dominant technology will continue to be profitable throughout the value chain as vertically integrated players drive cost from $1.45/W in 2009 to $0.93/W in 2015, assuming poly pricing at $70/kg. Efficiency will be a key driver of cost reduction, rising from 14.0% in 2009 to 16.1% in 2015.
· OC Oerlikon, a Swiss technology conglomerate, will give thin-film silicon new legs. Improvements enabled by a new fab line will push thin-film silicon efficiencies from 9.0% to above 11.0%. Significant improvements in output will cut depreciated capital expenditures per watt, and help to reduce TF-Si costs from $1.32/W in 2009 to $0.80/W in 2015.
· CdTe technology remains the long term leader in terms of COGS. Led by First Solar, CdTe has a significantly lower cost structure than multicrystalline silicon, and its cost reductions will march onward, keeping it the most profitable solar technology, as COGS falls from $0.80/W in 2009 to $0.54/W in 2015.
· Costs for select CIGS technologies drop dramatically. CIGS sputtered on glass - which is Lux Research’s benchmark given its critical mass of developers - will see COGS plummet from $1.69/W to $0.76/W as efficiency improves from 10.0% to 14.2%, and factory nameplate capacity and yields grow, allowing the top developers to earn gross margins over 30%.
Consist with Lux’s reporting, one crystalline PV module maker, SunPower, recently beat analysts estimates for its third quarter return and profits. Just a month ago, SunPower boasted that in a joint effort with AU Optronics it had successfully manufactured solar cells with a minimum conversion efficiency of 22.2 percent.
Adding … we previously wrote about DuPont’s PV-related revenues, and Saint-Gobain’s partnership with Hyandai Heavy Industries to build a CIGS module plant in Korea.
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Materials stories that missed the cut this week
At the end of each week, I end up with a list of a bunch of stories I started to write about, or started to investigate or didn’t even get that far even though the topic looked intriguing, but, I had a meeting to go to …
Anyway, it’s Friday, and rather than have these stories evaporate into the ether, I’ve close out each week by providing some raw links to some of these orphan tales. Check ‘em out:
Nanotecture plans to set up pilot supercapacitor manufacturing facility
Solar plan in China’s Inner Mongolia highlights pitfalls for U.S. firms
New process that harnesses heat energy could double efficiency of solar cells
Bloomberg: Subsidies for renewables, biofuels dwarfed by supports for fossil fuels
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Ohio’s first ’solar highway’ to be created
Solar arrays to light up LEDs Toledo Skyway. Credit Cmedinger/Wikipedia
According to a State of Ohio press release, the Ohio Department of Transportation is partnering with the University of Toledo to create the state’s first large scale “solar highway.”
ODOT will invest $1.5 million in federal funds to install and study a solar array along Interstate 280 right of way near Toledo that will be used to illuminate the Veterans’ Glass City Skyway, aka the fancy I-280 crossing over the Maumee River. The glass-steel-concrete bridge is visually striking by day, and gains more attention at night when a single pylon containing 384 LEDs (capable of creating 16.7 million potential color combinations) are used to create images visible from up to 3 miles away.
The “glass” theme reflects the Toledo’s historical connection (much, unfortunately, now lost) to the glass manufacturing industry.
Construction is slated to begin this spring, and the solar array is expected to begin generating electricity by the end of this summer. The energy collected will be used to assist in powering the lighting system on the highway that leads downtown.
“It’s a win, win for all involved,” explained ODOT Director Jolene Molitoris. “This study project not only supports a growing industry in Ohio, but it also identifies new ways for ODOT to reduce energy consumption and potentially save tax dollars by trimming our electric bill.”
For the next two years, UT will conduct research on the energy produced by the photovoltaic cells in the array and the practical construction and maintenance - including the savings that can be generated - as ODOT considers future solar highways across the state.
Adding . . . according to the Toledo Blade, half the panels will be provided by First Solar and half by Xunlight, and besides powering the LEDs on the bridge pylon, some roadway lighting will also be powered by the arrays (although it is not clear how much).
The Blade’s story also mentions the project will test the panels’ “effectiveness and durability in a roadside environment that will subject them to weather, road dust, vibration, and - possibly - vandalism.” The issue of durability isn’t as simple as one might think in this environment: ODOT crews tell me they regularly have to remove an unbelievable amount junk that accidentally falls off or bounces or out of trucks, not to mention all the disgusting stuff that interstate drivers intentionally hurl out of their vehicles. They also have claimed to have found gunshots through some of the small solar panels they already use to power small lighting and roadway monitoring equipment along the interstates. Congresswoman Marcy Kaptur Kaptur, according to the Blade, suggested that “the solar array could be modified later to include decorative panels and supports that would transform the array into a functioning work of public art, much as the Skyway itself was designed to be aesthetically pleasing.” Unfortunately, camouflage might be a better idea.
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Giant solar farms in the works in China, India and U.S.
BrightSource solar array
First Solar announced yesterday that it and the Chinese government had agreed upon a memorandum of understanding that, if a few more bridges are crossed, will result in a 2 gigawatt solar power plant in Ordos City, Inner Mongolia, China.
That’s a huge plant. A story in today’s Wall Street Journal reports that it will be a 25-square-miles array.
This will be a 10-year, multiphase project beginning with a 30 megawatt demonstration project that is planned to get underway in June 2010. According to the company’s news release, phases 2, 3 and 4 will be 100 megawatts, 870 megawatts and 1,000 megawatts, respectively. Phases 2 and 3 will be completed in 2014 and phase 4 will be completed by 2019.
“This major commitment to solar power is a direct result of the progressive energy policies being adopted in China to create a sustainable, long-term market for solar and a low carbon future for China,” says First Solar CEO Mike Ahearn.
After building the plant, First Solar plans to sell it to yet-to-be-determined Chinese business. The value of such a power producer depends on the value of the hardware and, more importantly, the value of future revenue streams.
The latter, however, is uncertain at this time. China is expected to eventually enact a feed-in-tariff. Typically, feed-in-tariffs establish a guaranteed premium that will be paid for renewable energy, but the size of the tariff is currently under debate. Once it is set, it will provide a way of calculating the value of the electricity produced by the power plant over a long-term period.
“The Chinese feed-in tariff will be critical to this project,” Ahearn said yesterday. “This type of forward-looking government policy is necessary to create a strong solar market and facilitate the construction of a project of this size, which in turn continues to drive the cost of solar electricity closer to ‘grid parity’ – where it is competitive with traditional energy sources.”
The project still has a few more bureaucratic hurdles to cross, but according to the WSJ, it will be just one part of an enormous (12 gigawatt) renewable energy development zone in that area of Mongolia. The plan is to include wind, solar, biomass and hydroelectric energy sources.
Information, although sketchier, on two other mega solar projects has also just surfaced. The Clinton Climate Initiative has apparently just reached an agreement on an MOU to build a 3 gigawatt solar farm in the State of Gujarat in India:
Officials said the solar park will be developed on the non-cultivable wastelands available in Banaskantha and Kutch districts.
In an official press release, the government said that at present, about 34 internationally acclaimed companies are participating with the state government to develop solar projects in Gujarat.
The WSJ reports that CCI is also in talks for a second similarly size facility in Rajasthan.
Finally, a number of sources have just reported that Brightsource has signed contracts to supply more than 2,600 megawatts of solar electricity to Pacific Gas & Electric and Southern California Edison. BrightSource is expected to set up as many as 14 concentrating solar power plants to deliver on this energy goal. Construction is expected to get underway in 2010. More on Brightsource’s California goals can be read in this recent CTT post.
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