Boom or Bust for Thin Film PV?

April 25, 2012

Dow's Powerhouse Solar Shingle, made with thin-film CIGS technology, is being sold in Texas and California, but is there enough of a market for it?

It wasn’t too long ago that thin-film PV (photovoltaics) was being touted as the next wave of solar, replacing crystalline silicon, which is used in the vast majority of solar PV panels and whose costs were high.

Not any more. What happened? In the past couple of years, the cost of crystalline silicon has gone down by more than 50 percent, due to a glut of cheap panels from China on the market. That’s been bad for some companies making crystalline silicon panels—and even worse for thin film manufacturers specializing in technologies like CIGS (copper indium gallium selenide) and cadmium telluride (CdTe).

“The polysilicon price crash has undermined a large tenet of thin films’ value proposition,” says M.J. Shiao, senior analyst for Greentech Media, in a webinar titled Is Thin-Film PV Dead? Costs and Competitiveness in a Low-Cost Module Market. Though the low costs of crystalline silicon doesn’t mean thin film is dead, Shiao says. Thin film manufacturers will face challenges in the next few years to survive, especially as crystalline silicon costs remain low.

The big question, says Shiao, is whether thin film manufacturers can cut costs, raise efficiencies and scale up in time to compete. Shiao says raising the efficiency of thin film technologies will ultimately lower costs, due to better balance-of-systems (BOS) costs (all the upfront costs associated with a PV system except the module). Higher efficiencies also lower area-related costs like the size of racks required to hold panels.

“Thin film will start to close to close with gap with crystalline silicon, opening a small window of opportunity for thin-film manufacturers who are cost leaders in the industry,” says Shiao.  “By 2015 to 2016, cost differences should come down to a point where they can be competitive.”

Shiao says much of the demand for thin film PV is moving toward new emerging markets like southeast Asia, South America, the Middle East and South Africa – all hot and humid climates where thin films tend to perform better than crystalline silicon.

Thin film is also supposed to be ideal for BIPV (building-integrated PV), though Shiao says BIPV may not be big enough to support many thin-film firms at scale.

Companies to watch in thin film include First Solar. Although the company has closed its German facility, its Malaysia facility has a low per-watt manufacturing cost that is closing the gap with crystalline silicon. In addition, Solar Frontier had demonstrated CIGS at scale—and that the technology can be viable. The challenge for these companies will have to keep demand high enough so their costs are low enough.

MiaSole and TSMC both have high-efficiency CIGS, but could be challenged to survive. MiaSole, in particular, needs a bankable parent. And don’t count out thin film silicon like amorphormous silicon from Sharp Thin Film, T-Solar and others, which will continue to see demand in the market.

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