Solar PV industry is facing tough challenges due to
overcapacity and funding issues. Companies are looking for ways to cut
A recent research titled “Turning Lemons into Lemonade:
Opportunities in the Turbulent Photovoltaic Equipment Market” from Lux Research
suggests manufacturers should adopt innovative technologies in order to cut
costs, increase margins, and offer differentiated products.
Greentech Lead had an opportunity to interact with Fatima
Toor, Lux Research Analyst and lead author of the report, to discuss the
details of the research findings.
Our exchange follows:
What are the major areas where innovation is required in
In crystalline silicon PV technology, with the existing
production methods processes, monocrystalline silicon ingot growth using
Czochralski pullers is too costly, wafer sawing wastes too much silicon,
standard cell designs lose 10 percent to 12 percent of absolute efficiency from
their highest efficiency potential, and module manufacturing remains
unnecessarily labor intensive. Technologies such as quasimonocrystalline
silicon (qc-Si), epitaxial silicon, and high-efficiency cell designs are all
innovations PV manufacturers are working on currently to reduce production
costs while improving efficiencies.
How do these technologies drive efficiency in the PV
Current wafer sawing techniques waste silicon; in
contrast, technologies, such as direct solidification and epitaxial silicon
eliminate the need for wafer sawing. Emerging quasi-monocrystalline silicon
(qc-Si) ingot growth enables 40 percent cheaper c-Si wafers. Emerging cell
designs, such as selective emitter (SE) and heterojunction with intrinsic thin
layer (HIT) present potential for high efficiencies. However, they require new
tools, and as a result, 60 percent to 70 percent of new equipment sales are for
the cell production equipment.
What are the major challenges in standardization of solar
equipments? How does standardization of solar technologies help address the
challenges facing the industry?
Solar equipment manufacturing for the conventional
crystalline silicon cell and module designs is relatively standard however CIGS
thin-film PV relies on custom equipment today. Therefore off-the-shelf
standardized tools with improved throughput will drive higher efficiencies, performance
and yield lowering capex and helping manufacturers attain scale and
competitive production costs.
With cost of production being a major concern for PV
makers, innovative technologies like qc-Si will attract major investments in
the near future. Any estimate on what will be the market size of these new
We agree that qc-Si is a promising up and coming
technology. We expect the qc-Si market size to be $2 billion by 2017.
What will be the estimated size of the market for new cell
Assuming market for most cell production equipment comes
in the form of equipment upgrades, the market for cell production
equipment will be $3 billion by 2017.
What are other major areas of research in solar PV
When looking at any industry it is important to have a
short term versus a long term scope. In the short term, surely the high
efficiency crystalline silicon and CIGS PV technologies will be key area of
research but in the long term, technologies, such as copper zinc tin sulfide
(CZTS) and single junction gallium arsenide (GaAs) have potential. CZTS is a
technology that large corporations such as IBM, Solar Frontier and DuPont are
researching, whereas GaAs is a technology being developed by Alta Devices with
industry partnerships with companies, such as Dow Chemical.
What should be the strategy of new and established solar
companies to survive in the market suffering from overcapacity issues?
Given low capacity utilization globally, there is
significant idle capacity in the market. Contrary to the general consensus,
idle capacity is an opportunity for PV manufacturers to upgrade to high
performance products, assuming available cash. So investment in product
differentiation and equipment upgrades for the low cost production of
high performance technologies is key for the long term survival of solar
companies. Those companies that sit idle while their equipment idles are
sealing their fate.
Do you think solar industry can survive without
incentives from governments?
I think for sure the solar industry will survive without
incentives in the long term because the world as a whole is becoming
increasingly energy hungry and this megatrend will drive demand for renewable
energy sources, such as solar. No country in the world has unlimited coal,
natural gas or nuclear reserves, but sun’s energy is available everywhere.
In the near term, current solar industry shakeout is
evidence that the solar industry is maturing. Certainly government incentives
to-date have been key to drive solar installations in regions, such as EU and
more recently Japan but these incentives result in boom and burst cycles.
Therefore for the sustainable growth of solar industry it is important that it
operates without government incentives, which will be a challenge in the near
term but not so much in the long term as cost of solar energy goes down
– due to innovation and scale – relative to conventional sources
of energy that will become expensive due to constrained supply in an
energy hungry world.