Showa Shell Silicon Line

Showa Shell Silicon Line

Plug in hybrids and an ever-increasing growth in electrical appliances plus the worldwide growth of increased incomes is pushing electrical demand just faster than supply can answer. Solar photovoltaic offers a high capital cost but low operating cost answers. But capital costs are projected to come down with more supply of silicon and the thin film technology plans to offer huge areas of lower cost collectors at lower efficiency at less expense.

Slaes volume of PV by nation

Sales volume of PV by nation

Market share across the planet is lead by far by Germany who has several years of government incentives paying off for the panel makers now at 49% of world sales volume. Close behind is Spain and the U.S. with respectively 13% and 12%. Japan is close to at 10% and we have to expect China will pour a more effort and capital to enter production in a big way. All of these countries’ companies are looking for market with declining prices.

Before we get too far, let point out that solar panels are a “no hail zone, high wind, or other damaging environmental hazard” kind of investment. It’s fair to expect that someday the systems could get low enough priced or the engineering designed for more risky areas, but for now a large part of the developed world isn’t going to see installations soon. That leaves a large area and lots of people as customers.

Solar Production End of 2007

Solar Production End of 2007

Germany topped the leading production companies with Q-Cells. Followed by Japan’s Sharp and then China’s Suntech. The next batch is lead by Kyocera followed very closely by the only (so far) thin film producer, the US firm First Solar.

What is interesting for some is that Shell (Showa Shell Solar) has a large stake in a Japanese firm producing panels and British Petroleum makes panels as well.

What’s coming is a large increase of lower priced silicon that can be used to increase production and cut prices. Two Japanese companies, Sharp and Showa Shell plan huge expansions; Sharp expects to get to gigawatt scale and Showa Shell with new technologies that improve efficiency.

Michio Kondo of AIST Research Center for Photovoltaics said, “The next two years will determine the winners. Later entrants won’t be able to catch up to those who put an all out effort now into technology and scale and speed. A year from now will be too late.” But Mr. Kondo isn’t counting the thin film group in that comment.

Sharp’s comeback strategy to be the world’s largest producer is a major ramp of production capacity in both crystalline and thin-film cells, and an expansion across the entire solar value chain, to assure capturing the highest value-added parts of the business and the high value of integrating the whole system. Tetsuro Muramatsu, GM of the company’s solar systems group says, “Sharp plans 1 gigawatt (GW) of capacity for crystalline cells and another 1 GW of capacity of thin-film cells by 2010, counting on the economies-of-scale from the high-volume production to reduce costs enough to bring solar electricity down to close to the target $0.21/kWh.”

Sharp illustrates s perspective important to both its development and the consumer. Sharp figures the solar cells or modules themselves account for only 25% (silicon) to 40% (thin-film) of the added value of the finished total system, with materials as much as 20% (silicon), and systems and engineering another 35%-40%. In recent months Sharp started its expansion across the value chain by forming a company to develop solar production equipment with Tokyo Electron, by signing on to solar power production deals with utilities in Japan and Italy, and by investing in developing large-capacity, low-cost storage batteries for solar systems through Japanese Li-ion venture ELIIY Power.

Showa Shell Solar, which currently makes only 20 MW a year of its CIS thin-film cells, plans to ramp to 1 GW capacity by 2011. Targeting a jump to 10%-12% CIS efficiency, and a second planned plant will bring total capacity to 60 MW by next year, with another much bigger plant Showa Shell will reach 1 GW by 2011.

That brings us to an even more interesting point. Showa Shell has relied on equipment it designed in-house, but to speed up development of better deposition technology for higher-efficiency film it is developing a next-generation high-volume tool set jointly with Ulvac.

Ulvac is one of the deposition line manufacturers. These companies sell and install the factory for producers who then make films. Applied Materials, Oerlikon Balzers, or Ulvac make turnkey thin-film deposition lines, and turnkey lines have gotten up and running in as quick as 16-19 months. Applied says it had contracted for sales totaling 1.7 GW of capacity across 10 customers as of June. Ulvac’s Yoshio Sunaga, senior managing director and chief director, says it has orders for 217.5 MW worth, from NexPower Technology, Sunner Solar, China Solar Power, and another Chinese and another Korean customer, who altogether plan future expansions of 650 MW. Ulvac is just starting to expand its marketing to Europe, India, and the Middle East. Sunaga reports Ulvac has installed capacity to produce 600 MW/year worth of tools at its Tohoku facility.

The investor action might be in the firms making thin film production lines. But thin film isn’t as efficient as silicon yet and may not close the gap. The advantage in sales prices will get huge volumes of thin film sold. If the panel prices are low enough, the panels could be replaced later with better collectors at a much lower cost. Assuming the buyer sets up the original purchase with some excess capacity for the installation and power conversion the only upgrade cost would be the more efficient panel and the cost to install.

Solar- Projected Shares By Technology

Solar- Projected Shares By Technology

Some companies have seized the obvious opportunity and offer or will offer both technologies. Dropping silicon prices are helping the market and thin film is scaling up efficiencies.

It might be time to look into a panel set. Just be aware that a big chunk of the original investment is the gear to hold the panels and convert the power. A little forethought for coming improvements could make a personal panel deal look much better now and way better in a few years.


6 Comments so far

  1. Ps Blog » Checking Up On Solar Panels on September 22, 2008 7:34 AM

    […] Read the rest of this great post here […]

  2. Solar Panels on January 21, 2009 10:19 AM

    So many charts, so many graphs, and so many panels! I must say they look pretty good. 🙂 solar panels sure are the next best thing.

  3. Solar Panels Installer on July 7, 2010 4:35 AM

    Do you know where I can find statistics for the UK’s solar market? I would like to know more about how solar panels for electricity vs solar panels for water heating compare?

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