Tag Archives: First Solar

Lifetime will limit the potential for Belectric’s Konarka acquisition

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Solar project developer Belectric (client registration required) has acquired the European operation of Konarka (client registration required), the bankrupt bulk heterojunction (BHJ) organic photovoltaic (OPV) developer (see the report “Looking for a Future in Organic Photovoltaics” — client registration required). The acquisition will be part of the Belectric’s new business called Belectric OPV, which plans to further develop the technology and focus on serving automotive and building-integrated photovoltaic (BIPV) applications (see the report “Building Integrated Photovoltaics: Moving Beyond Showcase Projects” — client registration required). Belectric plans to set up manufacturing capabilities using the technology in the next few months.

As part of the trend of developers like Hanergy (client registration required) moving upstream into module production, Belectric has been an aggressive pursuer of thin-film technologies – witness its work with First Solar (client registration required) and Solar Frontier. However, the performance metrics of Konarka’s OPV technology make it poorly suited for BIPV and automotive applications. Potential automotive and BIPV customers will have a hard time overlooking the high cost per watt and low efficiency of the technology in order to take advantage of OPV’s form factor, weight, and visual properties, like its diverse color offerings. However, customers in automotive and BIPV will be particularly wary of OPV’s lifetime, which does not even make it five years. Belectric needs to focus on its R&D efforts to improve the lifetime and also work with barrier film developers, as water and oxygen contamination are a leading failure mechanism. Unless the lifetime improves, the manufacturing facilities will not be producing much of anything, much as Konarka’s (client registration required) plant. However, the challenges and long timelines ahead mean Belectric should be wary of investing significant resources in it.

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Cutting Through the Noise on Abound’s Bankruptcy

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Late last month, once-promising cadmium telluride (CdTe) start-up Abound Solar filed for bankruptcy. We pegged the company as one of five solar suppliers that would struggle in 2012 (Client registration required). Abound’s $400 million U.S. Department of Energy loan guarantee (of which it only used $70 million) to expand and build a 640 MW facility in Indiana has the wheels of political media turning – in most cases, likening the failed company to Solyndra. Such comparisons, in large part, are erroneous.

Solyndra was likely plagued by poor manufacturing yields (Client registration required), but more so by high costs that were exaggerated when polysilicon costs crashed, making it wildly uncompetitive on price. In mid-2011, the company’s manufacturing costs were between $3/W and $4/W while the x-Si market was barreling towards $1/W.

Abound’s problem was not manufacturing costs. The company claimed 97% to 99% electrical/mechanical process yields, and had begun expansion for 640 MW of capacity – surely enough scale to bring costs down significantly. Fellow CdTe supplier First Solar, though struggling today, is the cost leader in the solar industry. We’ve heard that Abound’s biggest problem was module performance. As of our last profile, the company was barely breaking the 10% efficiency barrier, whereas competitor First Solar documented average module efficiencies more than 12.5% in its Q1 2012 earnings call. Further, performance issues in CdTe are likely a function of copper present in back contact pastes, which diffuses across the CdTe/CdS junction and negatively affects performance (for more on this issue, see the Lux Research report “Key Issues and Innovations in Photovoltaic Metallization. Client registration required.).

Solyndra failed on cost and Abound on performance – and attributing either to Chinese manufacturing alone is incorrect. What they have in common is that both received loan guarantees from the U.S. government, and so both will remain political punching bags well into the 2012 presidential election – Solyndra more so, as it received more funding and has questions surrounding its political connections; whereas Abound’s expansion was also supported by the Republican governor of Indiana at the time. What should be more of a concern for the solar industry is that the shakeout isn’t over.

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Nanosolar’s progress – or lack thereof – revealed at 4th Thin Film Summit USA

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In early December, we attended the Fourth Thin Film Summit USA in San Francisco, where we heard an interesting company presentation from Brian Stone at Nanosolar – a noteworthy venture-backed copper indium gallium diselenide (CIGS) module producer. After raising nearly $400 million prior to 2009, the company has remained largely quiet for the past year. Lux last profiled* Nanosolar in late 2009.

Brian presented Nanosolar’s utility panels – an application-specific product, not unlike the utility panels offered by First Solar and crystalline silicon (x-Si) incumbents like Trina Solar. The panels, he said, delivered 11% efficiency, with a roadmap to 16% by 2015. He also highlighted a few pilot projects at Nanosolar, including plans for 8 MW to 10 MW of production in early 2012.

Brian also shed some light on the company’s cost structure, citing $0.65/W to $0.70/W for materials today, decreasing to $0.30/W to $0.35/W – however, we still believe that nanoink costs remain a major bottleneck* for the company. At 2.5 GW annual capacity, Nanosolar anticipates total module costs of $0.40/W to $0.45/W. Today, he cited total production costs between $1.10/W and $1.20/W. Lastly, Brian highlighted balance of systems savings in the company’s pilot projects, citing $0.10/W to $0.15/W savings by using Nanosolar panels.

Despite its ambitious roadmap to low production costs, we think Nanosolar’s lack of competitiveness today will prohibit it from reaching its goals.

It is targeting utility-scale projects, but an 11% efficient panel won’t allow it to compete with cadmium telluride (CdTe) leader First Solar, which can also develop utility-scale projects internally. Even amorphous silicon (a-Si) can prove competitive against an 11% efficient CIGS panel, depending on location. On the other hand, CIGS is gaining traction in commercial rooftop applications, which are less space-constrained than residential rooftops.

In general, it’s clear that Nanosolar could very well be a victim of the solar shakeout in 2012 without additional investment. The company is simply not keeping up with the leaders in the CIGS market, like Stion and Solibro – both of which are above 13% production efficiency – and capacity leader Solar Frontier. That competitive landscape, in addition to bolstered competition from x-Si and CdTe, place Nanosolar squarely on the outside looking in.

* Client registration required.

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Italy’s solar market reaches 3 GW in 2010 amid growing uncertainty

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Following months of questions about the exact size of the Italian solar market, the Gestore Servizi Energetici (GSE), Italy’s grid interconnect agency released official installation numbers through March 2011: In total, the country has a little over 4.18 GW of cumulative solar installations. Yet, despite the official announcement, uncertainties remain.

Not surprisingly, planned reductions to Italy’s feed-in-tariff (FIT) led installations to soar to nearly 1 GW in December, bringing the total for 2010 to 2.33 GW. In February, announcements from the GSE and a flurry of news from installers and other research firms suggested that number reached 6 GW based on the number of applications received. But, given that 713 MW had been connected to the grid between January 1 and March 30 by the GSE’s count, much uncertainty remains about whether the missing 3 GW of applications were ever actually installed.

As of this writing, all eyes are on The Fourth Conto Energia and what reductions or caps it will introduce to the FIT policy at the end of April. An FIT reduction is certain, but the exact percentage remains to be seen. Reuters reported in mid-April morning that the current draft decree pegged it at an immediate 25% cut, with another 8% planned for January 2012.

A bigger concern is that the GSE will introduce a cap on new installations, which would dramatically hurt the solar market. Reuters further reported it could actually fall below 2010 numbers, at 1.55 GE to 1.8 GW for 2011 and 2.8 GW for 2012. Further, the article suggests the cap will be based on volume, and not total subsidy burden. That means price decreases will not enable higher installation figures.

The greatest concern to the growth of the Italian solar market, however, has been wild announcements of installations that are supposedly in the ground but not yet grid connected. If these 3 GW of phantom systems actually exist, the Italian market may have already exceeded the 2011 cap – effectively closing the market in 2011.

Due to these remaining uncertainties, we are hearing that module players and project developers are already rerouting inventories and supply to the U.S. as the short window between now and the June decree makes it unlikely they will be able to install systems before any possible cap. From our previous conversations, the module vendors with the most exposure to the Italian market include First Solar, Uni-Solar, SunPower, and the major Chinese players like Trina, Yingli and Suntech Power. In general, Italy’s scenario signifies the globe’s most severe case of reductions by a bankrupt government, but we expect to see more of the same elsewhere in the near future.

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New encapsulants for thin-film solar poised to hit the market

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Just a few weeks after DuPont announced a new product for its ionomer-based encapsulant line, we caught wind that Cytec is developing its encapsulant targeted at the thin-film market. The company plans to leverage its experience in UV-cured materials used in laminated glass applications, and ultimately offer a solution that can be cured in a matter of seconds. Incumbent materials like ethelene vinyl acetate (EVA) and polyvinyl butyral (PVB) take at least ten minutes to laminate.

In addition to faster cure times, both companies claim a key advantage of their products will be a lower moisture vapor transmission (MVT) rate, which helps protect the sensitive semiconductor layers. Having a low MVT rate is especially important for thin-film modules that replace glass with polymer backsheets and frontsheets, since it helps cope with the lower moisture barrier properties of those materials. However, successful solutions must be able to show a clear advantage over PVB for thin-film applications, primarily in raw materials cost. Since most module manufacturers already have autoclave furnaces, it is unclear how much they value improvements in cycle time.

A growing threat for such encapsulant technologies, however, is a practice by module manufacturers to sandwich products in glass and apply a powerful edge sealant, which provides the desired moisture-barrier. Abound Solar is already using such a “filler-free” encapsulation method; and Sharp, one of the world’s largest thin-film silicon module manufacturers, recently announced that it too will pursue frameless glass-glass modules protected by an edge sealant. First Solar, also using a glass-glass construction, uses EVA material for mechanical stability and an edge sealant to slow water and oxygen penetration.

Clients should watch closely over the coming years to see whether or not module manufacturers increasingly value the adhesion and strength of encapsulants over their moisture barrier properties. In our upcoming Solar Components State of the Market Report, we will tackle this topic among other challenges being faced by materials suppliers.

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How thin-film solar will fare against crystalline silicon’s challenge

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Graphic of the weeksIn the face of renewed pricing pressures, solar device manufacturers have had to refocus on minimizing costs and maximizing performance to maintain profit margins. Advances in crystalline silicon technology, and the falling cost of the polysilicon raw material, have only increased the pressure on manufacturers of emerging thin-film technologies, including thin-film silicon (TF-Si), cadmium telluride (CdTe), and copper indium gallium diselenide (CIGS) – many of which are under the gun to improve margins or face extinction.

To forecast how module developers would reduce the key components of cost – capital, materials, utilities, and labor – a recent Lux Research report constructed cost-of-goods-sold (COGS) models through 2015 for the dominant technology – multicrystalline silicon (mc-Si) – as well as its thin-film competitors: TF-Si, CdTe, and CIGS (both glass and flexible substrates).

This week’s graphic sums up the report’s findings. Namely, it shows that as COGS decline across the board, mc-Si remains highly profitable throughout the value chain. Vertically integrated players will drive costs 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.

Oerlikon will give thin-film silicon new legs. Improvements enabled by Oerlikon’s new ThinFab line will push thin-film silicon efficiencies from 9.0% to above 11.0%. Significant improvements in output will cut depreciated capex 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 mc-Si, 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%.

Source: Lux Research report “Module Cost Structure Breakdown: Can Thin Film Survive the Crystalline Silicon Onslaught.”

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Lux Q2 2010 Solar Supply Tracker: Growing demand stretches upstream supply

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Last week, Lux Research released its Q2 2010 Solar Supply Tracker (client registration required), which updates our figures on production and capacity throughout the value chain through 2013. Regular readers of the Tracker will find the most important update since Q1 is in the recent version’s demand forecast, which has been increased to 15 GW of market demand in 2010, driven by a surge in Germany and Italy ahead of 2011 feed-in-tariff reductions. We discussed this following PVSEC in Valencia a few weeks ago (see the September 16, 2010 LRSJ – client registration required).

On the supply side, Tier 1 and 2 module manufacturers are poised to produce 14.8 GW in 2010. Figuring in Tier 3 players for the “high case” scenario shows a potential for 18.0 GW of production in 2010. However, even with this greater-than-expected demand, Tier 1 and 2 module manufacturers maintain oversupply with 20 GW of capacity.

In Q2, crystalline silicon (x-Si) increased its technology dominance, reaching 79% of module production. Thin-film silicon (TF-Si), led by large manufacturers like Sharp and Bosch, and cadmium telluride (CdTe), dominated by First Solar, each account for about 9% of total production. Together, these three technologies make up nearly the whole module market. Copper indium gallium diselenide (CIGS) modules are still being produced in small quantities, but will quickly grow more than 1 GW if Solibro, Miasolé, and Solar Frontier execute plans for large capacity expansions over the next several quarters.

Geographically, Asia increased its dominance in module manufacturing, accounting for 75% of production in Q2 as more European capacity became unviable and low-cost Asian manufacturers like Trina, Yingli, and LDK added capacity in the downturn. On the polysilicon front, Wacker added European capacity, increasing the EU’s production share to 20% from 17% the previous quarter. However, Asia still holds the largest share at 43%.

A number of key market shifts occurred in Q2 throughout the value chain. Chinese polysilicon producers were a mixed bag as several low-cost manufacturers, including Jiangsu Shunda and Sichuan Xinguang, shut down for retooling or recapitalization while new entrants Yongxiang and Fine Silicon (owned by Yingli Green Energy) were still ramping production. Meanwhile, demand in 2010 will reach 100,000 MT and exceed the 75,000 MT production of the six top polysilicon producers – Hemlock, Wacker, GCL, OCI, REC, and MEMC – providing room for new entrants like Daqo New Energy. Further downstream, wafer supply is increasingly constrained in the face of strong demand and will hit 78% capacity utilization in Q3. Low-cost Asian manufacturers continue to dominate this segment, with GCL Silicon, Kyocera, and Green Energy Technology moving into the top 11. Strong demand has spurred several companies to make aggressive expansions in cell and module production. JA Solar led the charge in cell production, rising into the top 3 in Q2 and positioning itself to overtake the entire field by capacity in Q3. It has also integrated downstream into module production, along with China Sunergy, through acquisitions. Although these companies are emerging as new leaders, the top five module manufacturers remained unchanged from Q1, with the exception of Suntech Power, which overtook First Solar at the top spot in Q2 with 1.4 GW of capacity.

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