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Positioning Thin‐Film Photovoltaics for Success A NanoMarkets White Paper March 2008
NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-7010 | FAX: 804-270-7017
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Positioning Thin‐Film Photovoltaics for Success In a recent report titled, Thin‐Film, Organic and Printable Photovoltaics Markets: 2007‐2015, NanoMarkets predicts that the reduced cost of using simple printing and roll‐to‐roll manufacturing processes, the addition of new capacity, as well as technological improvements leading to increased efficiency, will position thin‐film PV as a major player in the PV market. As a result, the NanoMarkets report indicates that thin‐film photovoltaic (TF PV) solar cells will become a mainstream technology in markets currently served by traditional PV panels made from crystalline silicon. The report predicts that the $1 billion TF PV market of 2007 will grow to $1.6 billion in 2008 before climbing to almost $3.4 billion in 2010 and $7.2 billion in 2015. The TF PV share of the overall PV market was less than 5 percent in 2005, but is expected to grow to about 50 percent by 2015. TF PV will penetrate the PV markets by offering a more cost‐competitive solution than traditional PV for many applications, as as by opening up new applications though TF PV's unique properties, which include low weight, flexibility, and ability to be embedded into other materials. The most crippling limitation on conventional PV today is the high cost of producing the cells. Conventional PV panels are are made using crystalline silicon via an expensive, step‐and‐repeat batch process. Thin‐film technology could address this and other limitations of TF PV and open up new applications for solar energy. Even so, the road ahead for TF PV is not all sunshine; NanoMarkets indicates the technology will face challenges. For example, the recent shortage of crystalline silicon, which initiated much of the excitement about alternative materials, is starting to subside, eliminating one of the drivers of growing demand for TF PV. The thin‐film technologies covered in this report include: amorphous silicon (a‐Si), cadmium telluride (CdTe), Copper‐Indium‐Gallium‐Selenium (CIGS), Copper‐Indium‐Selenium (CIS), and organic and organic‐inorganic hybrid. Each material approach has its own benefits and risks. As Exhibit I on the next page shows, wide variety of materials – thin films and not exhibit photoactive properties and may be used for PV applications in a number of different environments, even if only in the lab.
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Exhibit I: Materials Used for PV
Material
Approximate Efficiency (Percent)
Use Page | 3
Gallium Arsenide/Indium Phosphide/Germanium hybrid
35
In lab only
Gallium Arsenide
25
Not widely used, except perhaps in some aerospace applications and in other applications where weight rather than cost is an issue.
Indium Phosphide
22
In lab only
Crystalline silicon
25
The most common material used for PV today
Multi‐crystalline silicon
20
Widely used
CIGS
20
Growing share of the thin‐film market
Cadmium telluride
17
Significant and growing share of the thin‐film market, but mostly comes from one firm
Amorphous silicon
10
The most common form of thin‐film PV.
Organic materials
4 to 8 percent
Not in use, but several firms are actively trying to commercialize it
The cost‐performance balance: Surging energy prices are driving a shift toward alternative energy technologies. For PV, the energy source is free, which makes solar energy attractive. There are drawbacks, however. Conventional PV panels are heavy, expensive to produce, physically inflexible, and susceptible to fluctuations in silicon supply. As a result, PV have been used mostly in niche markets or where special conditions exist, including markets where subsidies are available, markets where other forms of electricity are not widely available, and markets where real estate is not at a premium and it is convenient and inexpensive to deploy enough panels to generate the required amount of energy. The opportunities for thin‐film technologies lie in reducing the impact of these limitations and expanding the markets that PV can serve. Until recently, however, low efficiency and relatively
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undeveloped technology have prevented TF PV from capturing this opportunity. The tide is beginning to change, though. Changing landscape: With skyrocketing energy prices combined with falling PV prices, the PV sector is primed for growth, with some observers saying that PV could eventually account for as much as 20 percent of U.S. energy needs. TF PV is less expensive because less material is used to produce thin‐film cells compared to conventional PV. TF PV is produced by depositing thin layers of photoelectric material onto a substrate, which enables significant reductions in the amount of raw material used. The emergence of new manufacturing processes, including roll‐to‐roll (R2R) and printing technologies, will enable even further cost reductions. On the performance side, trends suggest substantial improvements in efficiencies of thin‐film technologies in the near future. CIS/CIGS, for example, has achieved in‐field efficiencies fairly comparable to crystalline silicon PV. However, while there has been progress, a gap still remains between the efficiencies of thin‐film technologies and that of conventional PV, in some cases quite significant differences. The result: TF PV must compete with PV on a cost‐basis or, where TF PV are creating new applications, on a property basis. Shining light onto the right markets: Where should producers of TF PV focus their efforts? Over the forecast period of 2007‐2015, all the applications covered by TF PV are expected to grow strongly, reflecting strong growth in the PV sector and the increasing penetration of TF PV into that sector. TF PV will have the greatest competitive advantage in markets where cost and/or weight is critical, conversion efficiency is not a priority, or where a characteristic associated with a particular thin‐film technology is a factor. The fastest growing sectors are likely to be in the consumer electronics and residential markets, driven by price point improvements generated by TF PV. These will not necessarily be the largest value markets, however. A break out of opportunities for TFPV is provided in Exhibit II on the next page.
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Exhibit II: Opportunities for TF PV
Current
Most installations use traditional PV because Large projects and of high efficiency. But utilities some using CdTe.
Future Opportunities CIGS and s‐Si are likely to see more applications as efficiencies rise. Organic and hybrid technologies do not seem likely to penetrate this sector both because of efficiency issues and stability issues
Some use of CdTe and a‐ All of the TF PV technologies have some Commercial and Si, especially in Germany applications here. This includes novel organic industrial building and Japan materials which may be integrated with wall, applications roofing and window materials to maximize the use of real estate/surfaces
Residential building applications
Consumer electronics
Military and Emergency
Some use of CdTe and possibly CIGS
Major opportunity for TF PV, because its light weight makes it highly suitable for self‐ installation. The ability to integrated with other materials is also an advantage. Rural areas in developing nations may be especially attracted to this solution.
a‐Si is widely used in calculators and in other small consumer electronics items, while CdTe has been used in the past
This seems to be the area that some TF manufacturers using organic materials are aiming at in the belief that their low efficiencies would not matter so much. Some manufacturers believe that there is really no market here, beyond some niche solar battery charger sales
Use PV including TF PV to service remote locations and on the battlefield
The military continues to be an active funder of TF PV technology and is looking at novel applications, such as solar powered battlefield dress. Not necessarily a big market, but tends towards the leading edge.
In value terms, commercial and industrial building applications will represent about 50 percent of the demand for TF PV in 2008, with large projects and utilities accounting for the remainder of demand. By 2015, TF PV demand will be spread across a broader range of applications. Residential building will
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account for about 15 percent, up from about 9 percent in 2008; and consumer electronics applications will gain a larger share of the demand, reaching nearly 8 percent in 2015, up from 3.2 percent in 2008. For larger projects and even central generation of electricity, TF PV is expected to soar in rooftop deployment due to the lightweight factor as well as due to the focus on cost. TF PV will see the largest opportunity in building applications, which include commercial, industrial, and residential markets. Because of the flexibility inherent in thin‐film technologies, TF PV can be coated, laminated, or otherwise embedded, into roofs and walls. Integrating PV into building materials has the potential to significantly lower costs. For example, the TF PV could be embedded into roofing materials in an in‐line process, offsetting installation costs typically associated with mounting PV. Several TF PV producers are developing products for this part of the market. For them it represents a good market as it lacks the “winner takes all” aspect of the large project sector while potentially accounting for a significant number of watts and hence using up available capacity. One concern with integrating TF PV into rooftop materials is the ability of these materials to meet the longevity requirements of the roofing market. Warrantees measured in decades for roofs are not unusual, and it is far from clear how well today’s TF PV products could live up to these requirements. But another promising application for embedded PV is the PV‐enabled smart window, which doesn’t have such concerns. In this application the PV cells are not only low cost but also add new functionality to the window; the TF PV will act as light sensors to signal when to change the transparency of the window. This application will require a transparent PV and therefore is most suited for organic‐based PV. Although not yet commercially available, organic and organic‐inorganic hybrid TF PV have the potential to achieve very low costs per watt, low enough perhaps to drive PV into entirely new markets. Demand for this type of PV is expected to grow from $1 million this year, to about $372 million in 2015. Although it will also grow during the next eight years, and will probably be the basis for many cool products, personal electronics will not represent a large‐value market for TF PV. TF PV has been used – or at least suggested for use – in various simple applications, including headsets, radios, thermometers, scales, deodorizers, wristwatches, clocks, stopwatches, LED flashing lights, sensor lights, remote control units, testers, battery chargers, educational tools, fans, sunroof car fans, and many others. A potentially larger area of interest involves helping to solve the power problems plaguing mobile phones and laptop computers. TF PV could be embedded into the battery—a sort of small‐scale version of the integrated building products—to extend the time between charging. The initial goal will be for TF PV to provide a power boost for the existing lithium‐ion batteries, with the long‐term goal of replacing such batteries. The problem here from a PV sales perspective is that each PV array sold into the mobile phone market will be very small compared with a rooftop antenna, so aggregate shipments of PV cells to this segment of the market end up be quite low A large portion of all TF PV applications in 2007 will be dominated by a‐Si—the most mature of the thin‐film technologies. As the other materials technologies mature, however, this is likely to change.
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Two of these technologies, CdTe and CIS/CIG, will contribute a total close to 45 percent of the overall PV energy output in megawatts. One of the most promising technologies, organic and organic‐ inorganic hybrid TF PV, will represent a relatively small portion of overall the PV industry in value terms by 2015, but could be about the same size in megawatt terms as the entire TF PV market today. Although not yet commercially available, organic and organic‐inorganic hybrid TF PV has the potential to achieve very low costs per watt, low enough perhaps to drive PV into entirely new markets. In addition to costs, organic PV will perform relatively well indoors and has the advantage of being able to be created on flexible substrate. Demand for this type of PV is expected to grow from $1 million this year, to about $372 million in 2015. Weighing the risks: Producers could be concerned that some of the drivers for TF PV demand will come to an end. As we have already mentioned, the silicon shortage, one of the initial factors driving the development of thin‐film approaches to PV, is rapidly evaporating. In this forecast, NanoMarkets has taken the view that TF PV will not be hurt significantly by the return of silicon abundance, mainly because TF PV have too much to offer to be impacted by commodity supply. The end to the boom for alternative energy is something that could impact the demand for PV. The hype surrounding the alternative energy sector is too hot not to cool down, and as a result, rates of market growth are expected to decline over the forecasting period. There is also a risk that thin‐film technologies will not be able to deliver the predicted improvements in efficiency. These concerns are real but will mainly impact the newer materials such as the organic and organic‐inorganic hybrid technologies. And where TF PV enable new products, there will be the typical high risks inherent in new product introduction. Despite these concerns, the PV, and in particular the TF PV industry, is likely to experience significant growth over the next eight years. To obtain a copy of the NanoMarkets report, Thin‐Film, Organic and Printable Photovoltaics Markets: 2007‐2015, visit our website at www.nanomarkets.net or contact us at
[email protected] or by calling our offices at (804) 270‐7010.
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