The next big US$6 billion in thin-film manufacturing investments

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

Forecasting thin-film investments and capacity expansions has never been an exact science. However, with the exception today of First Solar, there are few market-based arguments to support the immediate capacity expansion of most thin-film fabs presently struggling to match the downward crystalline silicon cost and price curve.

More often than not, it has been thin-film equipment suppliers that have been at the forefront of marketing the viability of thin-film technologies: not only their customers, who ultimately are the ones directly exposed to volatility in the rate of demand growth, but also an increasing glut of (readily financeable and aggressively marketed) cost-competitive c-Si modules from China.

Nonetheless, there remains an insatiable desire to invest in thin-film start-ups. However, recently publicized investments in the range of US$50-100 million pale somewhat into insignificance compared to the plans being unveiled by China’s Hanergy and the continued vote of confidence in one of their equipment suppliers Fujian Apollo.

The Hanergy/Apollo story is not new, but by virtue of being a wholly Chinese affair, has been less widely publicized outside Asia. In fact, the deals have been tracked most closely by equipment and materials suppliers that stand to benefit considerably from the capacity expansion announcements that come to fruition.

In Apollo’s production equipment design, large manually-loaded, batch PECVD chambers hold 72 thin-film panels vertically in a single deposition architecture, and employ a range of sequential absorber deposition steps to form multi-junction combinations of a-Si and SiGe layers.

Market demand and PV manufacturing heritage aside, the challenge to transition such a technology approach to a multi-GW-level production scale cannot be underestimated.

The first order from Hanergy – worth approximately US$3 billion – was signed in 2010 and called for various phases of turnkey multi-junction a-Si-based production tooling to be delivered to different Hanergy sites across China. However, by the time Apollo reported 1H’11 results during August 2011, the euphoric announcements of 2010 had been replaced by a somewhat more pragmatic assessment of the PV industry as it had evolved by then:

“With the effect of shrinking demand in solar PV modules and declining [sic] in module price, the cost competitiveness of thin-film solar PV module is declining. The potential investors in building thin-film production line are becoming more hesitated [sic]. The tightening in bank loans have imposed stress and negative impacts on our customers… and resulted in deferred and delayed investment in thin-film production lines. The pace of the delivery of production lines to our existing customers has been invariably affected.”

Given the softening of PV demand through 2011 and the caution being exerted into capacity expansion investments by tier 1 module suppliers, this summary was not entirely out of context.

But with less than 20% of the first contract delivered to Hanergy – and (proven) mass production still classed as work-in-progress – there was minimal evidence to anticipate the latest news from Apollo.

Apollo has just indicated that Hanergy has now followed up their initial purchase order (valued at US$3 billion) with another thin-film equipment contract for Apollo. This time, the contract is valued at approximately US$6 billion (split between equipment and sales and service support). The precise phasing of capacity is not identified yet, nor the exact connection to the 2010 requirements for equipment deliveries.

It is worth just putting this new figure in context to get a feel for the numbers involved here:

  • Solar Frontier’s Miyazaki Fab 3 is reported to have involved an investment at the US$1 billion level.
  • The new Hanergy/Apollo contract is greater than the collective sum of all a-Si turnkey thin-film fabs delivered to the industry until today. This includes all lines supplied by Applied Materials, Oerlikon, ULVAC, Jusung and a host of lower-throughput a-Si production lines whose technology – similar to Apollo – is based closely upon a deposition chamber design pioneered by EPV over 10 years ago.
  • Finally, the latest Hanergy/Apollo contract is greater than the total thin-film equipment spending across all a-Si, CIGS, and CdTe expansions covering the whole of 2010 and 2011.


Indeed, the new contract calls out for production equipment comprising over 1,000 PECVD chambers and more than 160 PVD sputtering tools. Based on estimates of MWs-per-PECVD chamber, the total nameplate capacity for this contract would translate to over 6GW of a-Si thin-film panel output annually.

Even downgrading the nameplate specification towards an effective manufacturing capacity figure closer to 5GW still represents an incredible amount of capacity addition to the industry at a time when a small group of 15 tier 1 PV producers has the capability of supplying a large proportion of end-market demand to 2015.

There has been no shortage of GW aspirations announced by tier 2 and tier 3 participants during the past couple of years, including many new entrants to the PV industry. Often, such announcements are merely accompanied by images of ribbon-cutting ceremonies and artists’ impressions of what these GW fabs may look like in the future.

During 1H’11, as the stark reality of supply and demand became clear, many of these plans were shelved or significantly cut back. Many companies, however, were already committed to equipment deliveries through 2011 and despite the best efforts from lower-tier equipment suppliers to cancel or push out 2H’11 shipments, the legacy of Q4’11 may simply be one of equipment crates awaiting to be opened at the first signs of a market pick-up.

By the end of 2011, Hanergy will have taken delivery of turnkey a-Si production lines from two different equipment suppliers with a nameplate capacity approaching 500MW, and at a cost just below 1 US$/W. What differentiates many of the thin-film announcements, however, is the timescale to mass production (simply by equipment delivery times, fab construction, or ramping to production) which is typically longer than for c-Si capacity expansions. As such, investments into thin-film expansions (with the exception of First Solar) are not directly tied to short-term volatility in PV demand, but more to longer-term, external strategic investment goals.

Investments into thin-film technologies continue to surprise many, but only serve to emphasize the aggressive ambitions of industry ‘outsiders’, keen to have a significant impact on industry production capacity in coming years.

Thin-film technologies (especially a-Si and CIGS variants) are still considered as leading candidates in any investment that seeks to be differentiated from the (currently dominant) China-driven tier 1 c-Si approach. Indeed, with limited options to compete directly on price/branding/marketing with the leading c-Si players in the foreseeable future, it is entirely feasible that the thin-film segment will continue to see strong investments – almost regardless of any close examination of the commercial and technical track-record of its participants to date.

In the short term, the equipment supply-chain to Apollo may be the greatest beneficiaries, but it will be down to Hanergy to meet industry cost-driven requirements in manufacturing to merit subsequent fab build-outs planned. However, the success of the Hanergy/Apollo contracts may ultimately be judged upon the ability of Hanergy to subsequently finance downstream project deployment at a level not previously seen within the industry.

19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?
26 August 2021
In this webinar, JA Solar will present its product portfolio based on the latest technologies to improve your PV projects, ensuring maximum reliability and performance. During the webinar we will receive insight from JA Solar about its solar technology roadmap and how the manufacturer is providing customers with innovative solutions to suit their needs, while we will also analyse how to determine the best product solution for each solar project.
6 September 2021
The 38th European Photovoltaic Solar Energy Conference and Exhibition will be held online from 6 - 10 September 2021, allowing PV experts from all around the globe to participate with just one click! The EU PVSEC is the world's leading forum for PV Research and Development and the biggest Conference on PV Solar Energy worldwide. That is why PV experts from all around the globe are keen on gathering together each year to be part of this specialist’s event, to present and discuss the latest developments in Photovoltaics, to network and to conduct business.

Read Next

PV Tech Premium
July 30, 2021
Not only will solar be the dominant source of new power generation in Europe by 2025, cementing its position as the third largest market for solar globally, but the continent has placed the asset class at the very heart of its COVID-19 recovery strategy. As part of a week-long special report on PV Tech Premium, Liam Stoker, Edith Hancock and Jules Scully explore the drivers for solar in Europe, the key markets and the challenges that remain.
July 30, 2021
First Solar has unveiled plans to construct a 3.3GWdc module assembly facility in India, bolstering its manufacturing footprint outside of the US.
July 30, 2021
Anglo-Australian mining company BHP, in partnership with Canada’s TransAlta Renewables, is to build two solar farms and a battery storage system to help power its Mt Keith and Leinster nickel mines in Western Australia
July 30, 2021
German energy giant RWE has upgraded its earnings forecast for 2021 after “exceptionally positive” earnings trend
July 29, 2021
Tracker and racking provider Arctech has delivered SkySmart II tracking system to a 575MW agriculture-sharing solar project located in Nangong City, Hebei Province, China.
July 29, 2021
Unigreen Energy, owned by Hevel majority shareholder Ream Management LLC, has broken ground on a wafer and cell manufacturing plant that will produce 1.3GW of silicon n-type monocrystalline ingots and wafers as well as 1GW of heterojunction technology (HJT) solar cells.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
BRISTOL, UK