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The revolution will be energized: Prometheus’ Bradford talks about new thin-film solar PV report

12 September 2008 | By Tom Cheyney | Chip Shots

thinfilmreport No sooner did the new "Thin-Film PV 2.0: Market Outlook Through 2012" come out than it's already in need of a revision. The report cites the more than $200 million in venture capital funds that poured into the TFPV space in the first half of the year, a figure which has ballooned closer to $1 billion this year with the multi-hundred-million-dollar/Euro investments in the likes of Nanosolar, Miasole, AVA, Sulfurcell, and now SoloPower ($200 million announced yesterday) that have been confirmed or multiple-source rumored over the first few months of the second half of 2008.

Despite this unavoidable "shortcoming," the 113-page document, published this week by Prometheus Institute and Greentech Media, offers a thorough analysis of the solar photovoltaics industry's most go-go sector. In the words of the publishers, it "provides the comprehensive results of our 2008 survey of thin-film PV manufacturers and our thoughts about how the PV and thin-film landscape is changing."

The survey reveals "two major trends affecting the overall industry growth. First, while the last year has seen a burst of announcements of new amorphous -ilicon production lines ordered, the ramp time and output of those lines is somewhat less robust than perhaps was originally believed. The ramp delays should be temporary however, and amorphous silicon is expected to make dramatic gains in production over the next couple years.

"The second trend is that overall thin-film production projections are meaningfully higher than in last year's survey, with all technologies outperforming by 2010 and beyond. Part of the reason for this was our overly conservative methodology, which did not allow for the fast ramp of fully commercial companies (like First Solar) that they had not already announced their future plans to 2010. However, the main driver is the massive amount of VC and corporate venturing capital that has poured into the industry in the last few years and the number of firms that have reached the commercial threshold because of those investments."

One of the key statistical and methodological differentiators of "Thin-Film PV 2.0" rests in how the authors ran the numbers for both "projected" and "potential" growth, as a way to compensate for the research bugaboos of over- and underreporting by the 137 companies being surveyed. "Once we established a potential capacity and production for those companies we felt necessary," they explain, "we then applied appropriate discount rates to get to a projected amount."

Here are some examples of the wide range between the report's "potential versus projected production" forecasts. The reports shows total TFPV projected production for this year is 1046 MW, growing exponentially to 4258 MW in 2010, and 9607 MW in 2012. The potential production numbers, however, leave the more conservative figures in the dust: 1450 MW in 2008, 7901 MW in 2010, and a mind-boggling 18,810 MW in 2012.

That's right, over 18 GW of TFPV if the potential production forecast, or what I'll call the "parallel universe forecast," were to inexplicably come true. But 9.6 GW is nothing to sneeze at either, representing a ninefold increase in the amount of TFPV rolling off factory lines in less than five years.

Another intriguing data set from the twin forecasts shows that amorphous-silicon TFPV production will pass cadmium telluride (AKA First Solar) by 2010 and that copper-indium-gallium-(di)selenide (CIGS)--the "technology platform [which] remains the most exciting, but also the most elusive," the authors say--will pass CdTe in production output by 2012.

To find out more about "Thin-Film PV 2.0," I contacted the lead author, Travis Bradford, main man at the Prometheus Institute. Here are some of the Q's and A's of our email conversation.

What were the biggest surprises among the findings in the new study?
The most surprising finding of this report is the degree to which the market has exceeded even our bold predictions of last year in growth of production and reduction of manufacturing costs. Our forecasts of growth in the industry through 2010 have risen from 2.5 GW of production to over 4.0 GW in this report. The marginal improvement in this forecasts are spread across all technologies, with each outperforming our prior expectation.

What are some of the biggest challenges/opportunities facing the TFPV sector?
While thin-film PV is rapidly increasing production volumes and reducing its manufacturing costs, the largest challenge that remains is getting downstream customer acceptance of these new technologies. In order to scale up quickly and deploy the substantial volumes of products that will be coming online in the next few years, thin-film PV will need to be competitively priced to both traditional crystalline and other thin-film product offerings. Fortunately the expected cost structure of thin-film will allow for meaningful pricing advantage.

In terms of the supply chain infrastructure (tools, materials, etc.) , where are the opportunities and possible disruptions?

Today, the equipment costs for new amorphous-silicon lines is comparable to the total capital required to make crystalline silicon. The cost for new CdTe lines is lower and the potential cost for new CIGS lines is even lower. Regardless, all of these technologies will enjoy a substantially reduced capital costs from today's levels at the technology scale up to the gigawatt production level. Not only will the lines be cheaper, they will also have much shorter lead times for ordering and installation as well as reduced footprint and therefore facility needs. These advantages will be important in the next phase of the PV industry's growth.

Will the turnkey equipment line model one day extend realistically to CIGS and CdTe?

It is likely that turnkey lines will become normal for all thin-film technologies in the future though some companies will choose to deploy them only internally, and not for external sale. It is also likely that future manufacturing infrastructure will be more plants smaller in size for them located near local markets. Eventually this industry structure will be needed to minimize expensive transport costs for heavy glass modules.

What technologies comprise the emerging/third-generation TFPV sector?

Organic, dye-sensitized, and nanostructure are the new technologies emerging in the industry. Each of these has inherent characteristics that will likely make them suitable for specific applications. However, it will take a long time for these technologies to create a competitive offering in the large roof-mount or ground-mount 25-year product life market.

How do you see the combination of concentrating and TFPV techs playing out in the next few years?

Concentrating PV and thin-film PV are not yet direct competitors, except in ground mount installations being contemplated and ordered by utility customers. We believe that thin-film economics creates a moving target of ever-decreasing installed system costs that all other technologies from crystalline PV to concentrating PV to CSP will have to meet.

Did many companies refuse to talk with you and participate in the study?

Almost no company refused to speak with us in our data collection; however, some were more forthcoming about their current and future economics and capacity expansion plans than others. We were able to collect the minimum required data for every company in the survey, but you have to estimate some sensitive items for some companies. We have also aggregated sensitive data by technology in order to protect the confidentiality of the companies that provide us information. One great advantage to our long tenure and deep relationships in the industry is that the companies can be more forthcoming with us because they trust that we will treat that data with a high degree of responsibility.

Do you plan to continue doing the report on an annual basis?

We will continue to explore the economics of all PV technologies, certainly as economic characteristics become important in determining competitive positions among companies and technologies in the future. We returned to these topics across all of our reports and will be further exploring the implications of dropping manufacturing costs through 2015 in our annual capstone report on supply demand and price reconciliation available in the fourth quarter.

We believe that the thin-film PV technology is here to stay and will make it increasingly powerful impact on the overall PV and broader electricity industries in years to come, and therefore we would be tracking this industry closely including annual reports in the future.

Bradford, coauthor Sorin Grama, and other industry experts and prognosticators will discuss the report in depth and the state of TFPV in general at "Thin Film Revolution," taking place Sept. 15 at the W Hotel-Union Square in New York City. For more info about the event, click here.