The challenge of a technology which always touted its cost advantage is aggravated, in a market that is experiencing the lowest cost per watt in the history of the industry (currently hovering around $1.20USD per watt for 14% crystalline modules).
I’ve been talking with quite a few thin film manufacturers of late about their challenges in such a situation. Most give me blank stares when I ask what are their plans in this context. Some dare to say that they need to consolidate to gain scale advantage again, yet everyone is so busy wanting to be “the boss”, that I fear most will end up on the chopping block quite soon.
We’ve seen a number of companies exit the thin film arena in the past year, and I suspect that few of the current players are currently profitable. So the question is…are they able to bring down their costs to a point where they have a significant enough advantage to justify their existence, or not. I fear that the answer is….not.
6% modules, even if they use technology which captures more power in real world conditions, are not going to be bankable at the current pricing levels. I have heard prices as low as $0.95 per watt for thin film, yet they state that they are losing money at that price.
So what is the answer? It would appear that while the crystalline world scaled and brought costs out of the value chain, the thin film world went merrily about its path thinking its advantages would last forever. First Solar is probably the best example of how to do it right. They got funding while the game was hot and prices were high. Their technology hovers around 10% efficiency. They do their own projects, with only a percentage of their production being “sold” to others. They take costs out by using manufacturing processes that are highly automated and not labor intensive. They scaled quickly.
Left to their own devices, all of the small to midsize thin film players will disappear in time. Oh, you might have a few key clients here and there that keep you afloat, yet don’t think that the market will swing hugely back in your favor anytime soon to permit you to grow beyond that. And even they will get wise to the market and begin asking the tough questions. I suggest its best you ask those of yourselves now and find the answers, or perish like so many other industrial companies that stayed stuck in the mud of past glory.
3 Comments
Three questions about thin-film PV:
1. Will multi-junction a-Si achieve >10% average module efficiency and still be low cost?
2. Will a big CIGS company, such as Solar Frontier, be able to become profitable?
3. Will GE finally gets its act together in PV and make its CdTe project, Prime Star, a success?
Simon
Astute questions as always! Answering in the order of your questions:
1. dual/triple/micromorph have all been attempted, yet each time you add a layer, you add complexity, and with complexity comes added cost. The question is really…what defines “low cost” in today’s price environment?
2. CIGS holds much promise, yet remains a sideline player in terms of scale. If Solar Frontier can make it work, then they have a chance. Miasole is priced above crystalline, yet delivers only about 12% module efficiency today. Their roll to roll process has promise yet again scale must be north of 500MW in my opinion to be able to be cost effective.
3. What incentive does GE have to get its PV act together in this environment? Rather, I would say play the energy services angle and use the module as a commodity.
With gratitude,
Sass
Government money is an addiction and it’s a difficult addiction to kick. Subsidies allow a company to ignore basic and essential business practices and eventually always lead to failure.
Best example around is the ethanol industry. Since the 80’s they have enjoyed tariff protection from imports and since 2004 they have been the beneficiary of both subsidies and mandates. Now ethanol consumes over 40% of the corn produced in the US and we are all forced to buy it in our gas. Still, today the ethanol industry can’t stand on its own. Hopefully we will come to our senses and end the subsidies and let the industry live or die on its own merit. Subsidies are designed to help new “essential” technologies get a leg up till they gain parity but too often industries use them as an excuse for not pushing harder to advance the technology. Things are changing and the gravy train is fast running out of gravy. When that happens, only the lean and mean will survive.
PS: Cool captcha setup.