The war between the dominating crystalline technology and the emerging thin film technology continues. Thin film has competed successfully based on price, but as the price for crystalline solar panels has precipitously dropped, the competitive edge for thin film solar modules is waning. A recent report from Lux Research entitled "Module Cost Structure Breakdown: Can Thin Film Survive the Crystalline Silicon Onslaught?" may cause some heart burn for some thin film module makers. As CNET News reports in the early 2000s, "several solar start-ups set out to disrupt the solar power industry by producing a new generation of thin-film solar cells that were vastly cheaper to make than the incumbent silicon cell technology." That was then, and this is now. Let's get to the results of the study.
Solar Industry Magazine reports on the findings, which compared multicrystalline silicon (mc-Si) technology (representing roughly 80% of the crystalline silicon market) on a dollar-per-watt basis against three challengers: thin-film silicon, CdTe (cadmium telluride) and CIGS (copper indium gallium selenide). Solar Industry Magazine cites the major conclusions of the study from Lux Research's press release:
The report found that mc-Si remains highly profitable as COGS [cost of goods sold] 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% in 2009 to 16.1% in 2015.
Oerlikon will give thin-film silicon new legs, Lux Research predicts. Improvements enabled by Oerlikon's new ThinFab line will push thin-film silicon efficiencies from 9% to above 11%. Significant improvements in output will cut depreciated capex per watt, and help to reduce thin-film silicon 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 will drop dramatically, according to the report. CIGS sputtered on glass will see COGS plummet from $1.69/W to $0.76/W as efficiency improves from 10% to 14.2% and factory nameplate capacity and yields grow, allowing the top developers to earn gross margins over 30%.
According to the press release we received from Lux Research, the lead author of the study concludes that "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. The profitability of thin-film silicon is much dicier, but copper indium gallium diselenide is positioned to outplace crystalline silicon in profitability by 2013 as leading developers improve process stability."
Ken Zweibel writing on Renewable Energy World, has this to say about thin films: "This has to be said - crystalline silicon was better than we (the thin film community) realized; and it still seems to have plenty of potential for continued progress. There hasn't been and there will not be any overall revolution of PV by thin films." Zweible goes on to point out that there are technologies that may compete and should compete well with crystalline:
Thin films are not created equal. A bit simplistically, it's like the old story of Goldilocks and the Three Bears. For amorphous and thin film silicon, the porridge is not hot enough. The efficiency is too low. For CIS alloys, the porridge is too hot - although CIS cells can be very efficient (20% cells!), CIS is hard to manufacture. For CdTe, the porridge is just right - efficient enough and easy to manufacture. There may be a dozen documented ways to make 10% CdTe cells.
The concept of thin films makes sense - less material, less handling through large area substrates - but it has to be executed. So far, CdTe is the only technology that has executed. But when the concept of thin films is executed, it can stand up to any competition in PV, including Chinese silicon. Can anything else in PV say the same?
Beyond the status quo, only CIS looks like it might, someday, be a serious competitor of CdTe. And this would be good, because we need more competitors to keep the progress in PV robust and the competition lively.
CNET News gives us its take on what this means for the consumer: Consumers continue to benefit from these solar manufacturers competing on cost and efficiency. But rather than compare the relative efficiency of different solar cell technologies, consumers considering rooftop solar panels should look at different economic metrics--the installed cost per watt and how much energy, in kilowatt-hours, a set of solar panels can produce per year.
There may be other reasons to purchase thin film modules, but the most important driver for the thin film market is waning.