Tag Archives: Sharp

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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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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Lux’s Q1 2010 Solar Supply Tracker sees growing production amidst slight oversupply

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Last month, we released the Q1 2010 version of the Lux Research Solar Supply Tracker (see Solar Supply Tracker, Q1 2010 – client registration required). It includes figures on production and capacity data throughout the value chain through 2013.

Notably, the Tracker revealed that total module production for 2010 will be 12.6 GW, an increase of about 4.7 GW from 2009 production. We’ve also updated the Lux Research demand forecast, which predicts 12.1 GW of market demand in 2010, signifying a slight oversupply this year.

Crystalline silicon (x-Si) will account for 76% of total new module production in 2010. Most of the remaining share will be split between inorganic thin-film PV – particularly thin-film silicon (TF-Si) fueled by a slew of entrants – and cadmium telluride (CdTe), overwhelmingly provided by First Solar. Each will each account for 11% of 2010 module production. Companies like Avancis, Würth Solar, and Solibro will each produce a handful of Copper indium gallium diselenide (CIGS) modules in 2010, to round out the balance of new module production.

In terms of geography, Asia continues to dominate the manufacturing scene, accounting for 45% of polysilicon production, 78% of wafer production, and 71% of module production in 2010. Though Asia dominates in absolute production, several companies are adding capacity in North America, hoping to capitalize on promising demand in the U.S. and Canada, including Canadian Solar, SunPower, and Yingli.

A number of companies made notable changes to production and plans in Q1. Upgraded metallurgical silicon (UMG-Si) producers Dow Corning and Timminco stopped production at their Brazilian and Canadian facilities, respectively. Both companies cited decreased market demand, and will leave capacity idle with plans to reevaluate demand in a few years.

While UMG-Si players are hurting, top-tier polysilicon suppliers are thriving. The top six polysilicon producers – Hemlock, Wacker, GCL, OCI, REC, and MEMC – will supply 75% of the total polysilicon to the market in 2010. Further downstream, several companies beat expectations and are accelerating ramp schedules. Taiwanese wafer player Green Energy Technology, cellmaker Neo Solar Power, and Chinese module manufacturer Solarfun all increased or accelerated capacity addition plans, citing increasing customer demand. Although Solarfun garnered more market share with its increasing capacity, it could not crack the top five module manufacturers. First Solar remained in the top spot, followed by Suntech Power, Sharp, Canadian Solar, and Trina Solar.

Looking out several years, supply remains slightly above demand throughout the value chain – except at polysilicon, where a significant supply overhang remains. As we witnessed this quarter, this supply overhang forced more expensive producers to shut down production lines, as their processes are no longer economically viable. Expect more consolidation and additional polysilicon players shutting down production facilities, as well as significant shuffling of market share as new technologies gain  traction, the vertical integration trend continues, and delayed subsidy cuts in Europe keep demand high.

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Thin-film silicon fears are exaggerated

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Analysts have taken a more critical look at Applied Materials’ (AMAT) success with its SunFab line of turnkey module production facilities. New orders for the company’s production line have plummeted, and existing deals have been scaled back as clients moderate expansion plans in the face of massive module oversupply. As a result, rumors began circulating earlier this month that the company was contemplating an exit from its thin-film silicon (TF-Si) business – though the company has only made veiled comments to date about its plans.

The market had been quite optimistic about the AMAT solution when silicon was scarce but, as increasing polysilicon supplies have pushed contract prices to $75/kg, AMAT’s x-Si module prices have fallen to $1.95/W. If average polysilicon prices to device manufacturers reach $45/kg, modules prices could drop to $1.50/W or lower, which could enable cost of goods sold (COGS) as low as $1.05/W. Despite the obvious and significant threat to thin-film silicon’s viability, the current desire to bury the technology is as much of an overreaction as the initial hype was. There is significant room for TF-Si in the long-term technology mix − maybe just not AMAT’s variant.

Our outlook has been more measured. In the report Solar State of the Market Q1 2008: The End of the Beginning (client registration required), we projected that TF-Si would lose market share as polysilicon prices collapsed in 2009, and then rebound considerably in the future as economies of scale kicked in. Indeed, TF-Si stalwarts Sharp and efficiency leader Kaneka see this reality and are continuing to invest strongly in the technology, with Sharp supporting a 1 GW facility in Sakai, which has on-site silane and glass manufacturing. The facility recently started production with 180 MW of initial capacity using equipment from Tokyo Electron – with the status of the remaining 820 MW to be determined. Further, AMAT’s arch-nemesis Oerlikon has achieved commercial efficiencies over 10% on modules from its TF-Si tool − giving it a significant cost edge over AMAT, which has been consistently unable to break 9.5%, though it is currently struggling with its own financial issues.

Since we estimate SunFab’s TF-Si panel manufacturing costs at $1.40/W, including depreciation, $45/kg polysilicon would wipe out smaller-scale AMAT clients. In fact, Sunfilm, one of AMAT’s first SunFab customers recently fell by the wayside. We have heard of similar troubles with other AMAT clients and expect announcements of bankruptcy or production shutdowns soon. A few have quietly happened already. AMAT’s SunFab, with its lower efficiencies, unwieldy and damage-prone large module size, and expensive capex, is among the most vulnerable, but TF-Si will still grow on the backs of Sharp, Kaneka, and others to a 2.4 GW market in 2015.+

Even so, don’t count AMAT out: The company has a strong technical pedigree. Plus, while it’s overreached with SunFab, it has room to correct the flaws with its approach, as equipment upgrades will be a continual need for TF-Si, even as many module makers fail (see section 4.2 of the report Solar State of the Market Q3 2008 - client registration required). What’s more, with its experience riding out up-and-down cycles in the display industry, it’s not likely to get spooked by the current thin-film silicon panic. And even if its TF-Si business does fail or gets radically scaled back, it still wields considerable weight in the x-Si value chain and is likely working quietly on CIGS, OPV, and other technologies in the background. It has lost a battle, but certainly not the war.

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Rating x-Si module makers on the Lux Innovation Grid

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lig-c-siCrystalline silicon (x-Si) PV modules comprise the largest and most established portion of the photovoltaic (PV) module market, holding roughly 81% of the global PV market in 2008. These x-Si modules also have significant penetration in all sizes of grid-tied applications – from residential to large-scale utility installations.

A handful of large, top-tier manufacturers dominate the market, but smaller start-ups with differentiated technologies are still entering. As the module oversupply rolls through 2009 and 2010, some crystalline silicon module manufacturers will be at the heart of the shakeout.

Examining the performance of companies in this technology area, we find that:

  • Large corporations with differentiated technologies are among the strongest performers.Many of the highest ranking companies are large corporations that stand out due to top-level high-efficiency products and large corporate backing. Their backing provides support for module warranties, capacity expansions, pricing battles, and technology development.
  • New competition from low-cost manufacturers is driving down the value of European leaders. European module manufacturers with high-quality x-Si module technologies are beginning to struggle as module production becomes increasingly commoditized. Their quality advantage is beginning to slide as new low-cost manufacturers gain access to higher-quality materials, dropping their scores on technical value scale.
  • Even with promising technologies, start-ups face formidable barriers to growth. The most successful pure-play solar firms got an early start in the market, and offer either differentiated technologies, sharp business execution, or both. New entrants to the solar market need more than a novel design or slight technical advantage to succeed. Companies building capacity, especially those based on a novel technology, score lower than those with existing capacity because they must play catch-up with more traditional and established manufacturers. The outlook is increasingly bleak for start-ups with unique technologies that are yet to build production capacity.
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