[San Francisco, CA USA]
Targeting $2 per Watt Photovoltaic (PV) system installed cost.
|From Intersolar North America 2010|
At Intersolar North America 2010 last week, Dr. Thomas Surek of Surek PV Consulting presented “The Race to Grid Parity: Crystalline Silicon vs. Thin Films” in the Market & Technology Outlook program. I found his independent views on the PV Market and research directions a breath of fresh air after four conference days.
Lured by the NREL (National Renewable Energy Laboratory) Best Research-Cell Efficiencies eye chart and silicon shortages of “PV yesterday”, Dr. Surek observed many huge venture capital “investments in thin films, concentrator PV, and next- generation technologies (anything “nano”)” were driven with “unreasonably short R&D-to- product cycles projected”. Typical commercial modules only achieve 50-70% of champion cell efficiencies with a practical limit of ~80%.
PV Market Perspective
Crystalline silicon technology dominates the worldwide PV Market although in 2009 Thin Films captured 16-17% market share on a MegaWatt-peak (MWp) basis led by First Solar, Inc. (NASDAQ:FSLR) with about 13%.
The PV seller’s market of 2008 has transitioned to a buyer’s market beginning with the drastic Spanish Feed-in Tariff cuts and followed by the global financial crisis. Reductions in PV module and system prices have confirmed the elasticity of PV demand though well designed and implemented government subsidy programs remain crucial for rapid PV deployment and market growth.
New Polysilicon capacity investments by incumbent producers, chemical industry entrants, and start-ups have switched 2008 silicon shortages to oversupply for the next few years even with double digit PV Market growth rates. Please see my popular Solar Polysilicon Oversupply until 2013? post from Intersolar North America last year for the Hemlock Semiconductor projections.
Two bullets from the PV “today” slide shown above are telling:
- New start-ups face significant pricing pressures – must compete against lowest-cost silicon producers and lowest-cost thin films (e.g., First Solar)
- Expect many delays, failures, and consolidations in industry, and decreasing venture investments for next phase(s)
On Grid Parity, Dr. Surek said:
I will argue that this Grid Parity, basically cost effective PV electricity in whatever region of the world or the US you live in, will be reached in the next several years, 2 to 5 years perhaps, and in some cases it is actually cost effective today even without subsidies.
Dr. Surek said:
With supply exceeding demand for at least the next several years, only the lowest cost producers will be competitive. Many of the new start-ups with manufacturing costs that are essentially close to First Solar’s selling prices are going to have problems unless they have either deep pockets or some strategic markets where they can put their products. And Concentrator PV is facing the same problem.
Crystalline Silicon PV
Recovering from the polysilicon shortage, the crystalline silicon PV Module Production Learning Curve is returning to the 80% baseline trend. “Module price decreases by 20% for every doubling of cumulative production.”
While many evolutionary developments are possible to continue along the 80% Learning Curve, it won’t go on forever and the limit is likely around or just below a $1 per Watt.
- An important point: every 1% in efficiency (plus or minus) is worth ~$0.07-0.10 per Watt at the system level.
- Polyilicon prices will continue to come down and are forecast to be about $30 per kg (kilogram) in 2012 per Richard Winegarner of Sage Concepts.
- “UMG Silicon I think had a better chance a few years ago, but I think that window of opporuntity is much smaller now, it may be a niche add on to the market.”
- “Rule-of-thumb”: Every 1% (absolute) in module efficiency gain is worth ~$20 per kg in polysilicon price
In his prediction for “Soon”, Dr. Tom Surek said:
The Silicon cost will probably be cut in half.
Overall the ingot growth and wafering will be roughly cut in half again.
Solar cell costs will still keep decreasing as well as the module cost.
And you’ll be below $1 to $1.5 and that’s a quite reasonable expectation in the next few years. And that will result in System costs in the $2 to $3 range.
Thin Film PV
A few quick bullets from the lightning review of leading Thin Film technologies.
Amorphous Silicon (a-Si)
- Fundamental understanding of Microstructure (amorphous to microcrystalline)
- High-rate deposition (10-100 A/svs. 1-3 A/s)
- Major growth in manufacturing worldwide 2008-2010, with more than 5,000 MW manufacturing under construction or announced (“standard” equipment available)
- Are there markets for all these products?
Cadmium Telluride (CdTe)
- Thin CdS and alternate buffer/window layers
- CdTe growth; thinner layers (< 1μm)
- Lowest manufacturing cost and module prices
- Credible followers (Abound Solar, PrimeStar Solar, …)
CIGS (Copper Indium Gallium diSelenide)
- Understanding of film growth, microstructures, defects, and device physics – complex but “tolerant” to processes
- Process controls in manufacturing for uniform composition and thinner films (<1 μm); higher throughput and yield
- Low-cost, moisture-resistant flexible packaging for roll-to- roll, light-weight products – this is key
In conclusion, Dr. Surek said:
Both crystalline silicon and thin films have credible pathways to installed systems at less than $3 per watt (“soon”) and heading to $2 per watt in a few years after that – both technologies can be winners.
There have been rumors of getting to a $1 per Watt and maybe an initiative coming out of Washington.
I am all in favor of a major initiative in PV along the lines of a ‘space initiative’ such as landing a man on the Moon or Mars. But while the Moon and Mars are real targets, $1 per Watt PV systems are not realistic.
I know Intersolar North America has been having Login problems, but I still cannot access the Conference Proceedings after complaining for almost a week. Bummer.
(Full disclosure: I own some shares of FSLR stock.)