Thin film technology has been increasing its market share over the last couple of years. As reported in Greentech Media, according to Navigant Consulting thin-film shipments accounted for 11 percent of the global market in 2007, 14 percent in 2008, and possibly as much as 25 percent in 2009. But with the price of crystalline PV coming down, the thin film industry is under siege. Thin film has generally been recommended for its low cost, its ease of installation, its attractive appearance and its output in low light situations. But the major drawback is that it is significantly less efficient than the competing photovoltaic technology and requires much more space to produce the same output as crystalline panels.
In a stream of bad news in the past several weeks, just yesterday, as reported in the Wall Street Journal, Chinese thin film maker Trony Solar Holdings Co Ltd. postponed its initial public offering due to market conditions. According to the report:
Sometimes, industry or company-specific factors can make it difficult to attract investors at a price acceptable to the issuer. In Trony's case demand for solar products has decreased during the recent global financial crisis, yet production has ramped up, creating an oversupply that began at the end of 2008. As a result, solar manufacturers like Trony have faced increased pricing pressure, with its average selling prices and profit margins declining. The company expects prices will continue to decline over time due to supply ramp-ups and lower raw material expenses.
An article entitled "The Skinny On Thin film: A Sector On Shaky Ground" in the November 2009 edition of Solar Industry foretold of many of the problems plaguing thin film:
Industry experts agree that [the thin-film sector] is poised to expand its market share significantly in the near future. However, the current state of the solar industry not only has halted the sector's progress, but also appears to have raised new obstacles that could easily delay whatever future potential thin-film technology has promised.
A conference earlier this month in San Francisco echoed this gloomy mood. As reported in Greentech Media, Christian Koitzsch, a managing director of Bosch Solar Thin Film in Germany noted a reverse of a trend:
Project developers and investors who might have given thin films serious consideration have been choosing crystalline silicon solar panels for large, ground-mounted installations instead over the past year. It's a phenomenon that happened rather quickly. In the past year, prices for crystalline silicon solar panels worldwide have plummeted as much as 50 percent as the recession tightened its grip and Spain, which was the largest market in 2008, experienced a sharp cut in government subsidies and intensified competition in countries that offered more generous incentives.
This downturn has affected many of the major players in the thin film market. United Solar Ovonic (Uni-Solar) is letting go of 400 employees, about 20 percent of its workforce. Uni-Solar's chairman, Subhendu Guha, appeared at the thin film solar conference in San Francisco and spoke about the fierce competition for limited customers this year. According to Greentech Media:
Guha said manufacturers in China have inflicted pains on the rest of the industry by slashing their prices. He also noted that solar panel makers had been expanding their factories just before the market demand plummeted.
"The relentless pressure is coming from two sides. One is the low-priced products from China," Guha said. "In order to sell the products, you have to lower the price of the systems. It's great for consumers but not for manufacturers. But those with a vibrant business model will survive. Many will not."
Thin film is still looking for it niche in the market, but market forces threaten to turn out the lights before this promising technology gets going.