First published in Cleantech magazine Issue 6 2011, Copyright Cleantech Investor Ltd. 2011
By Denis Gross
Plummeting silicon PV prices have put pressure on rival technologies, but thin film PV has attracted investment from GE and Warren Buffett.
The Solarbuzz Retail Module Index shows the dramatic decline in price per Watt Peak for photovoltaic (PV) modules over the past decade, from US$5.40 (€5.47) in December 2001 to US$2.49 (€2.33) in November 2011. Month-on-month declines between October and November this year range from 0% to -10% for silicon panels across the US and Europe. Meanwhile, thin film modules firmed by 1% in the US and declined by 3% in Europe.
The travails of silicon PV cell and module manufacturers are well known. Global overcapacity resulting from excess production at new manufacturing plants in China has had a significant impact on the supply side. On the demand side, there has been a dramatic downturn in the previously high growth European markets as feed-in tariff regimes were curtailed abruptly.
There is a benefit insofar as the low silicon PV prices make grid parity imminent in high irradiance regions. However, it will take time for the turbulent conditions in the solar market to subside – and in the meantime there has been an impact on confidence.
Plummeting silicon PV prices have put pressure on rival solar technologies such as thin film and the concentrated photovoltaics (CPV) sector. In July this year, UK-based QuantaSol succumbed to a trade sale of some of its assets. NASDAQ-listed JDS Uniphase, a communications solutions provider, acquired CPV product design, patented intellectual property (IP), and other assets from QuantaSol. The deal included the rights to the multiple quantum well (MQW) technology developed by QuantaSol, a former Imperial Innovations portfolio company. MQW technology provides high efficiencies – in excess of 40-50% – but the semiconductor technology is costly. JDS Uniphase has been supplying CPV for satellite applications, and will use this acquisition to target a broader range of terrestrial applications.
2011 has been a challenging year for the thin film solar industry, with the collapse of Solyndra in the US again highlighting the impact of declining silicon prices on the business case for more complex and costly technologies. However, the thin film PV market looks set for dramatic growth over the next decade and more.
The thin film PV market is projected to grow in value from US$3 billion in 2010 to US$44 billion worldwide by 2017, according to forecasts from Wintergreen. This projected growth will be underpinned by continuing developments in cadmium telluride (CdTe) and copper indium gallium selenide (CIGS) technologies.
CIGS is believed to have the greatest potential for increasing cost-effectiveness of all the thin film technologies, and offering grid parity potential in less-favoured areas of solar irradiance.
Solibro GmbH, a subsidiary of Q-Cells SE, claims that its CIGS-based thin film Q.SMART module technology was the first in the thin film sector to achieve a solar module efficiency of 17.4% (aperture area). The Fraunhofer ISE Institute, in Freiburg, Germany, has confirmed the new record. The test module was fabricated using processes believed to be fully scalable that can be expected to achieve cost-effective mass production. The co-evaporation CIGS process uses metal flux profiles, temperature profiles as well as process times similar to Solibro’s current production.
The CIGS technology behind Q.SMART was developed in 1983 by the Ångström Solar Centre at Uppsala University, Sweden, commercialised by the spin-off company Solibro in 2006, and acquired by Q-Cells in 2009. Q.SMART is produced in Thalheim, Germany at the company’s own factory with a total nominal production capacity of 135 MWp.
Foremost in the thin film industry is NASDAQ-listed First Solar, the first company to achieve a sub-US$1/Watt manufacturing cost in 2008. First Solar expects to have a total capacity of more than 2.8GW by the end of 2012. Panels produced by the company will be used in the Agua Caliente Solar project, a 290MW solar facility in Yuma County, Arizona.
In December 2011, First Solar’s thin film technology attracted mainstream media attention when the company announced that it would sell its 550MW, US$2 billion, Topaz thin film solar project to Mid-American Energy Holdings’ utility unit, a part of Berkshire Hathaway Inc. which is owned by Warren Buffett. Topaz is expected to be amongst the last large solar projects to qualify under the US Treasury Department incentive scheme with attractive power purchase agreements. Topaz, the third largest solar project to date in the US, signed a 25 year agreement with PG&E Corp of San Francisco back in 2008.
GE is also focusing on thin film solar. The company announced in October that it would invest US$300 million in the construction of a factory in Aurora, Colorado, with annual production capacity of 400MW. The GE plant will produce CdTe thin film solar panels based on the technology developed by PrimeStar Solar. GE acquired a majority stake in PrimeStar Solar, which developed its technology in partnership with the US National Renewable Energy Lab (NREL) in 2008. GE has agreed to supply solar energy systems to MPX, the Brazilian energy company headed by Eike Batista, which inaugurated Brazil’s first solar farm at Tauá, in the State of Ceará, in the second half of 2011.
Meanwhile, the CIGS thin film production facilities of Würth Solar, based in Germany’s Schwäbisch Hall, are being sold to Manz. Production capacity of 30MW will be cut to just 6MW as part of the deal, which was announced in November 2011. Manz, which produces systems for the manufacturing of both crystalline solar cells and thin film solar modules, had previously signed an agreement wtih Würth Solar, providing it with exclusive rights to the Würth Solar thin film technology.
In December 2011, thin film solar technology developer Reel Solar, which is operating in stealth mode, raised US$15 million from investors including CalCEF Clean Energy Angel Fund, Pangaea Ventures and CMEA Capital. Reel Solar, which is based in San Jose, was founded in 2009 when it raised US$1 million from CMEA and Pangaea.
Other developments of interest include the California-based thin film start-up Stion, whose investors include Khosla Ventures, Braemar Energy Ventures, Moser Baer Photovoltaic, Lightspeed Venture Partners and General Catalyst Partners. Stion opened a 100MW manufacturing factory in Hattiesburg , Mississippi in September 2011, and was planning to start production of CIGS modules at the end of 2011.
Stion’s technology features two stacked devices that enable broader and more effective light absorption, with each solar circuit tuned to a different part of the spectrum. Thus the module can absorb more energy than traditional panels.
At the end of August 2011, operations began at Global Solar Energy’s 35MW solar module factory in Berlin, Germany producing flexible CIGS. This is Global Solar Energy’s second facility, and complements the company’s Tucson, Arizona plant, which has a production capacity of 40MW. Global Solar is the only manufacturer in full scale production of CIGS PV cells on a flexible substrate. The deposition of CIGS on flexible stainless steel substrate via a roll-to-roll process reduces the costs, increases throughput and improves materials utilisation. These materials are suitable for integration into commercial, residential, utility-scale and government applications, and their lower cost is opening up opportunities where previously solar hasn’t been a viable option, such as BIPV (building integrated photovoltaics).
Also in August 2011, a US Department of Energy US$197 million loan guarantee was granted to San Jose-based SoloPower for the construction and operation of three facilities that are expected to produce approximately 400MW of thin film photovoltaic modules annually. In addition to expanding its existing operation in San Jose, California, SoloPower will construct and operate two new facilities in Portland, Oregon. SoloPower manufactures low cost, high efficiency CIGS-based PV cells. The CIGS cells are then packaged into flexible, lightweight solar modules via a roll-to-roll process. SoloPower claims that the modules require less balance-of-system hardware and are easier to install than traditional solar panels. The roll-out of production at SoloPower marks a milestone in the development of the company, which raised Series A financing, led by Crosslink Capital and Firsthand Capital Management, back in 2006. In 2007 SoloPower raised Series B funding led by Convexa Capital and Alf Bjørseth (the co-founder of REC Group); and in 2008 its Series C financing round was led by Hudson Clean Energy Partners.
The IPO market remains extremely difficult, but if the growth rates projected by Wintergreen come to fruition, venture investors such as these can expect to realise exits as some of their thin film solar investments join companies like First Solar – alongside the host of Chinese silicon PV manufacturers – on the public markets. And perhaps for investors in public markets the time will soon be ripe to revisit the shares of companies such as First Solar – which have lost over 60% in value this year.
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