Greentech Media - Thin Film 2010 - 2010

GTM RESEARCH MARCH 2010
THIN FILM 2010: MARKET OUTLOOK TO 2015

EXECUTIVE SUMMARY | SHYAM MEHTA | GTM RESEARCH
THIN FILM 2010 2 COPYRIGHT 2010, GREENTECH MEDIA INC ALL RIGHTS RESERVED
TABLE OF CONTENTS
1 INTRODUCTION: BEYOND THE HYPE 9
1.1 What Factors Drive Thin Film Demand? 11
1.2 Report Structure 13
2 PV TECHNOLOGIES 14
2.1 Crystalline Silicon (c-Si) 14
2.2 Thin Films 14
2.2.1 Cadmium Telluride (CdTe) 15
2.2.2 Copper Indium (Gallium) DiSelenide (CIS/CIGS) 16
2.2.3 Amorphous Silicon (a-Si) 17
2.2.4 Multi-junction Cells 19
2.2.5 Tandem-junction/Micromorph PV 19
2.3 Third-Generation Thin Film 20
2.3.1 Dye-Sensitized Cells (DSC) 20
2.3.2 Organic PV (OPV) 21
3 MANUFACTURING 23
3.1 Batch vs. Continuous Manufacturing 23
3.2 Thin-Film PV Process Flow 24
3.3 Deposition Processes 25
3.3.1 CdTe 25
3.3.2 CIS/CIGS 26
Sputtering 26
Co-evaporation 27
Electroplating 28
Nano-Particle Printing 28
Ion Beam Assisted Deposition 28
3.3.3 Amorphous Si 29
3.4 Module Integration 30
3.5 Encapsulation 31
3.6 Glass Lamination 32
3.7 Materials Requirements 32
3.7.1 CdTe 32
3.7.2 CIS/CIGS 34
3.7.3 Amorphous Si 35
3.7.4 Commodity Materials 36
4 TECHNOLOGY CHARACTERISTICS 37
4.1 Efciency 37
4.1.1 Why Efciency Matters 37
4.1.2 Research Cell Efciencies 37
4.1.3 Commercial Cell vs. Module Efciency 38
4.1.4 Historical Module Efciencies 39
4.1.5 Projected Future Efciency 40
4.1.6 Limitations to Improvements: Theoretical Maximum Efciencies 41
4.2 Substrates 42
4.3 Module Degradation 43
4.4 Sensitivity to Temperature 44
4.5 Spectral (Light) Sensitivity 45
4.6 Energy Yield 46
4.7 Area Footprint 48
4.8 Module Weight 49
5 THIN FILM PV IN 2009 51
5.1 Surveying the Thin Film Landscape 51
5.2 Pricing Pressure 54
5.2.1 Polysilicon Prices Crash 54
5.2.2 Crystalline Module Price Drops 56
5.3 Bankability Poses Challenges 57
5.3.1 A Solution for Some: Product Guarantee Covers 58
5.4 CdTe: The First Solar Juggernaut Continues 59
5.4.1 First Solar in 2009 59
5.4.2 Other Companies 60
5.5 CIGS: Progress Slow but Steady 61
5.5.1 Increasingly Crowded Space 61
5.5.2 VC-Funded Companies Come Out 62
5.5.3 BIPV on the Horizon 62
5.5.4 Turnkey Equipment Vendors Enter the Field 63
5.5.5 Efciency Status: Continual Progress 64
5.5.6 Prominent Producers 65
5.6 Amorphous Si: An Inversion of Value Proposition 66
5.6.1 New Entrants and Equipment Sales: At Near - Standstill 67
5.6.2 Commercial Production and Sales Agreements 68
5.6.3 Pricing: Extreme Reductions and Regional Disparities 69
5.6.4 Efciency Progress: Tandem Holds the Key 70
5.6.5 Prominent Producers: A Crowded, But Nascent Space 71
5.6.6 Corporate Insulation Provides Differentiation 74
5.7 VC Investment in Thin Film 75
6 MANUFACTURING COSTS 78
6.1 Module Cost Structure 78
6.2 The Problem with Cost Estimates 79
6.3 Current Costs 81
6.4 Cost Roadmaps 84
6.4.1 First Solar: Onwards and Upwards 84
6.4.2 Applied Materials: $1/Watt Remains the Goal 85
6.4.3 Oerlikon: Too Good to be True? 85
6.5 Cost Forecasts 86
6.5.1 Capex Costs 88
6.5.2 Glass Costs 89
6.6 Module Prices 90
6.7 Gross Margins 93
6.8 Required Module Costs at Fixed Margins 94
6.9 Thin Film Price and Margin Sensitivity to Polysilicon Price 95
6.10 Pricing in Bankability 97
6.11 BOS Costs 99
6.11.1 The Case of Large-Area Modules 101
6.12 Project Economics: NPV vs. IRR 102
7 MARKETS AND APPLICATIONS 103
7.1 Grid-tied Residential 103
7.2 Grid-Tied Commercial 105
7.3 Grid-Tied Utility-Scale 107
7.4 BIPV 109
7.5 Off-Grid and Niche Applications 110
7.6 Should a Thin-Film Manufacturer Integrate Downstream? 111
8 CAPACITY 113
8.1 Capacity vs. Production 113
8.2 The Need to Derate 113
8.3 Capacity Projections 114
8.3.1 By Technology 114
8.3.2 By Region 115
8.3.3 Top Manufacturers 117
8.4 Equipment Market 118
9 THIN FILM DEMAND 119
9.1 Historical Production and Market Share 119
9.2 From Capacity to Production: Murky Waters 120
9.2.1 Thin Film Capacity: A Tenuous Notion 121
9.2.2 Potential Production: An Upper Bound 122
9.2.3 Exogenous Factors: Market Conditions, Product Value 123
9.3 Quantifying Thin-Film Demand: A Top-Down Methodology 123
9.4 Market Sizing 126
10 CONCLUSIONS 127
10.1 Predictions 127
10.2 Final Thoughts: The Road Ahead 128
11 APPENDIX: COMPLETE LIST OF THIN-FILM MODULE AND EQUIPMENT MANUFACTURERS 131
12 LIST OF PROFILES 136
Figure 1-1: Thin Film Production and Market Share, 2002 - 2008 9
Figure 1-2: Venture Capital Investment in Thin-Film PV, 2007 and 2008 10
Figure 1-3: Bankability Sensitivity: Module Price Discount vs. Relative Default Risk 11
Figure 1-4: Required Components of the Thin Film Production/Demand Model 12
Figure 2-1: Crystalline Silicon Value Chain 14
Figure 2-2: Comparison between Thin-Film and Traditional Crystalline Silicon PV 15
Figure 2-3: Thin-Film PV Manufacturing Process 15
Figure 2-4: CdTe Cell and Module 16
Figure 2-5: CIGS Cell Structure 17
Figure 2-6: Single-Junction Amorphous Silicon Cell Structure 18
Figure 2-7: Multi-Junction Amorphous Silicon (a-Si) Cell Structure 18
Figure 2-8: Multi-junction cell with gallium indium phosphide top cell, tunnel junction, gallium
arsenide bottom cell 19
Figure 2-9: Tandem-Junction Cell 20
Figure 2-10: Dye-Sensitized Solar Cell 21
Figure 2-11: Organic PV Cell Structure 22
Figure 3-1: Batch vs. Continuous (Inline) Production 23
Figure 3-2: Tandem-Junction Amorphous Si Process Flow 24
Figure 3-3: Simplied Process Flow for Roll-to-Roll Manufacturing of CIGS on Flexible Substrate 25
Figure 3-4: Closed-Space Sublimation Process Used for CdTe 26
Figure 3-5: Sputtering Deposition Process 27
Figure 3-6: CIGS Co-evaporation Process 27
Figure 3-7: Nano-Particle Printing Using CIGS Ink 28
Figure 3-8: Ion Beam Assisted Deposition 29
Figure 3-9: CVD Process 30
Figure 3-10: Monolithic Module Integration 31
Figure 3-11: Cadmium Prices, 2005 - 2010 33
Figure 3-12: Tellurium Prices, 2004 - 2008 33
Figure 3-13: Projected Use of Tellurium in CdTe PV 34
Figure 3-14: Indium Prices, 2004 - 2009 34
Figure 3-15: Projected Use of Indium in CIS/CIGS PV 35
Figure 3-16: Projected Use of Commodity Materials 36
Figure 4-1: Best Research Cell Efciencies, 1975-2007 38
Figure 4-2: Historical Module Efciencies by Technology 39
Figure 4-3: Projected Module Efciency by Technology 40
Figure 4-4: Theoretical Maximum Cell Efciency by Technology Type 41
Figure 4-5: PV Substrate Comparison 42
Figure 4-6: Substrate Utilization by Technology 42
Figure 4-7: Module Degradation by Technology (Glass-Based Modules) Post Burn-in 44
Figure 4-8: Effect of Temperature on Effective Module Efciency 45
Figure 4-9: Spectral Sensitivity for Crystalline and Amorphous Silicon Cells. 45
Figure 4-10: Thin-Film Solar Modules Can Be More Tolerant to Shade 46
Figure 4-11: Simulated Operating Performance by PV Technology and Location 47
Figure 4-12: Module Area Footprint by PV Technology (Based on Current Module Efciencies) 48
Figure 4-13: PV Module Weight by Technology 49
Figure 4-14: CIGS Module Weight - Framed Module vs. Frameless Module 50
LIST OF FIGURES
Figure 5-1: Estimated Preliminary 2009 Thin Film Production by Technology (MW-dc) 52
Figure 5-2: Top Ten Thin Film Producers, 2008 (MW-dc) 52
Figure 5-3: 2009 Industry Distribution by Technology 53
Figure 5-4: Thin Film Industry Distribution by Region and Technology 54
Figure 5-5: Chronology of Polysilicon Market Dynamics, 2006-2009 55
Figure 5-6: Quarterly Module Prices, Q4 2008 - Q3 2009, Canadian Solar 56
Figure 5-7: Module Vendors with Product Guarantee Cover 58
Figure 5-8: First Solar Manufacturing Capacity and Production, 2008 vs. 2009 59
Figure 5-9: Key Performance Metrics in 2009 - First Solar 60
Figure 5-10: Industry Players in CdTe 61
Figure 5-11: New Entrants in CIGS Manufacturing 61
Figure 5-12: Key Progress Indicators for VC-backed CIGS Firms in 2009 62
Figure 5-13: Powerhouse Solar Shingles 63
Figure 5-14: CIGS Turnkey Vendors 63
Figure 5-15: CIGS Module Efciencies, 2009 64
Figure 5-16: Prominent Industry Players in CIS/CIGS 65
Figure 5-17: Thin-Film Technologies - Comparative Economics, 2010 67
Figure 5-18: Amorphous Si Companies That Entered Commercial Production in 2009 68
Figure 5-19: Amorphous Si Sales Agreements and Project Deployment in 2009 69
Figure 5-20: Amorphous Si Module Pricing, 2009 70
Figure 5-21: Amorphous Silicon Module Efciencies, 2009 71
Figure 5-22: Single-Junction Amorphous Si Producers 72
Figure 5-23: Double- and Triple-Junction Amorphous Si Producers 73
Figure 5-24: Tandem-Junction Amorphous Si Producers 73
Figure 5-25: Amorphous Silicon Manufacturers with Large Corporate Parents 74
Figure 5-26: VC Investment in Thin-lm in 2009 75
Figure 5-27: Venture Capital Investment in Thin-Film PV, 2007-2009 76
Figure 6-1: Module Cost Structure 78
Figure 6-2: Manufacturing Cost vs. Plant Size, Logarithmic Relation 80
Figure 6-3: United Solar Production Cost as a Function of Run Rate, 2009 81
Figure 6-4: Fully Loaded Module Manufacturing Costs, Q1 2010 82
Figure 6-5: Single-junction Amorphous Silicon Cost Structure, 2010 83
Figure 6-6: Publicly Available Thin Film Cost Data 83
Figure 6-7: First Solar Cost Reduction Roadmap 84
Figure 6-8: Applied Materials Tandem-Junction Cost Reduction Roadmap 85
Figure 6-9: Oerlikon Module Cost Reduction Roadmap 86
Figure 6-10: Fully Loaded Module Manufacturing Costs, 2012 87
Figure 6-11: Fully Loaded Module Manufacturing Costs, 2015 ($/Wp) 88
Figure 6-12: Embedded Capex Costs by Technology ($/W) 89
Figure 6-13: Glass Cost as Percentage of Module Cost, 2012 89
Figure 6-14: Module ASPs, Q1 2010 90
Figure 6-15: Module ASPs, 2012 91
Figure 6-16: Module ASPs, 2015 ($/W) 92
Figure 6-17: Module Prices, 2010 - 2015 92
Figure 6-18: Thin Film Gross Margins, 2010 - 2015 93
Figure 6-19: Required Thin-Film Module Cost at 25% Gross Margin 95
Figure 6-20: Thin Film Price Sensitivity to Polysilicon Price, 2012 96
Figure 6-21: Thin Film Gross Margin Sensitivity to Polysilicon Price, 2012 96
Figure 6-22: Module Price Discount versus Corporate Bond Rating 98
Figure 6-23: Module Price Discount vs. Relative Default Risk 98
Figure 6-24: Area-Related BOS Cost as Function of Module Efciency 99
Figure 6-25: BOS Cost, 0.70 m
2
vs. 5.7m
2
Applied Materials Amorphous Si Modules Utility-Scale 100
Figure 6-26: First Solar BOS Cost Reduction Roadmap 101
Figure 6-27: 2012 Module Price and Gross Margin, 0.70 m
2
vs. 5.7m
2
a-Si (Tandem-Junction) 101
Figure 6-28: Project Cash Flow NPV vs. Equity IRR, Fixed-Area Feed-in Tariff Based Installation,
CdTe vs. c-Si 102
Figure 7-1: 5 kW Amorphous Silicon Residential Rooftop Installation, Germany 104
Figure 7-2: PV Module Power Density, 2009 vs. 2012 104
Figure 7-3: 900 kW Tandem-Junction Commercial Rooftop Installation, Japan 105
Figure 7-4: List of Commercial Thin Film Projects Installed/Under Construction in 2009 106
Figure 7-5: 21 MW CdTe Utility-Scale Project, Nevada 107
Figure 7-6: List of Utility-Scale Thin Film Projects Installed/Under Construction in 2009 108
Figure 7-7: 10 kW CIGS BIPV Faade 109
Figure 7-8: CIGS-Based Portable Solar Charger 110
Figure 7-9: Feasibility of PV Technology Deployment by End-Application 111
Figure 8-1: Global Thin Film Manufacturing Capacity by Technology, 2006 - 2012E 114
Figure 8-2: Global Thin Film Manufacturing Capacity by Region, 2006 - 2012E 115
Figure 8-3: 2012 Thin Film Capacity by Technology and Region 116
Figure 8-4: Projected Top Thin Film Manufacturers by Capacity, 2012 117
Figure 8-5: Global Thin Film Capacity by Equipment Vendor (MW-dc) 118
Figure 9-1: Historical Thin-Film Production and Market Share 119
Figure 9-2: Thin-Film Production by Technology, 2008 120
Figure 9-3: CIGS and Amorphous Si Mid-Year Capacity Utilization, 2006-2008 121
Figure 9-4: Thin Film Potential Production by Technology, 2009E - 2012E 122
Figure 9-5: Required Components of Thin-Film Production/Demand Model 123
Figure 9-6: Estimated Thin-Film Production, 2009 2012 (MW-dc) 124
Figure 9-7: Estimated Global Thin-Film Production by Technology, 2009E 2012E (MW-dc) 125
Figure 9-8: Global PV Market Share by Technology, 2012E 125
Figure 9-9: Thin-Film Module Market Size, 2009E 2012E ($ Million) 126
Figure 10-1: Mid-Year Capacity Utilization, CIGS and Amorphous Si, 2009 2012 129
Figure 11-1: List of CdTe Manufacturers 131
Figure 11-2: List of CIGS Manufacturers 131
Figure 11-3: List of Amorphous Si Manufacturers 133
Figure 11-4: List of Turnkey Equipment Providers 135
ABOUT THE AUTHOR
Shyam Mehta
Shyam Mehta is a Senior Analyst at GTM Research, focusing on global solar markets.
Before joining GTM Research, Shyam was a Financial Analyst at Goldman Sachs Global
Investment Research where he covered equities in the alternative energy sector, primarily
solar companies. Prior to Goldman, Shyam was a Research Analyst at The Brattle Group,
an economic consulting rm, where his work focused on problems within the electricity
industry. Shyam received his Bachelors in Mathematics from U.C. Berkeley.
Research Assistance
Richard Tesler | GTM Research
LIST OF COMPANIES
Abound Solar
Anwell
Applied Materials
ARENDI S.p.A.
Astronergy (Chint Solar)
Auria Solar
Bangkok Solar
Best Solar
Calyxo GmbH (Q-Cells)
Canrom
centrotherm AG
CG Solar
China Solar Power Ltd
China Stream Fund Solar Energy
Clairvoyant Energy
Dupont Apollo
Energosolar
ENN Solar
EPV Solar
Ersol Thin Film GmbH
First Solar
Flexcell (VHF Technologies SA)
Formosun
Free Energy Europe
Fuji Electric
Gadir Solar
Genesis Energy
Golden Photon
Green Energy Technology
Grupo Unisolar
GS Solar
GUANGHUI New Energy
Hanergy
Harbin Hopeful Star
Heliodomi S.A.
Heliosphera
HK Solar
Huilon
ICP Solar (Intersolar)
Inventux Technologies AG
Jenn Feng
Johanna Solar
Kaneka Solartech Co., Ltd.
Kenmos PV
Lambda Energia
LG Display
Malibu GmbH
Masdar
Matsushita Battery
Mitsubishi Heavy Industries
Moncada
Moser Baer
Nanjing Lunt Co
NanoPV Corporation
Nanowin
NexPower Technology
Novergy
Oerlikon
Pa Yang (Efun)
Parity Solar
Polar Photovoltaics
PowerFilm Solar (Iowa Thin Films)
Pramac Swiss SA
Primestar Solar
Qingdao Chengye Glass
QS Solar
Roth & Rau CTF Solar
Russian Nano Solar Technologies
Sanyo ENEOS
Sanyo Solar
Schott Solar GmbH
Sencera
Sharp
Shenzhen Sumoncle
Shenzhen Topray Solar
Shihua
Signet Solar
Sinonar
Solar Array Ventures, Inc
Solar Cells (Koncar)
Solar Plus
Solar Thin Films
SolarMorph
Solarpro
Solems
Soltech
Sun Well Solar (CMC)
Sunlm AG
SUNGEN International Limited
Sunner Solar
Sunovia
T-Solar
Terra Solar
Tianjin Jinneng Solar Cell Co.
Tianwei SolarFilms Co
Trony Solar
ULVAC
United Solar
Willard & Kelsey Solar Group
XsunX
Xunlight
Yuanchang Group
Yutong Light Energy
Zia Watt Solar
EXECUTIVE SUMMARY
E.1 Introduction: Beyond the Hype
From only 17 MW in 2002 to 966 MW in 2008 (a compounded annualized rate of 96%),
thin lms rise over the last decade has been remarkable, indeed. Fueled by the greatest
success story in the PV industry cadmium telluride producer First Solar thin lm has
captured the imagination of industry participants and interested observers alike. First
Solar represents the disruptive potential of thin-lm PV in full high throughput (1,111
megawatts in 2009), competitive efciency (11%), and an industry-leading cost (currently
83 cents per watt), enabling signicant prot (the only pure-play solar company to be listed
on the S&P index).From market entry in 2002, the company has gone on to become
the largest PV module producer in the world in what has seemed like the blink of an eye.
The basis for this remarkable turnaround was a fundamental insight on part of investor/
entrepreneur Harold McMaster in the early 1980s: that the essential cost element of large
area solar arrays was glass, and [he] could treat the actual solar cell as simply a different
kind of coating on glass. In other words, thin-lm PV represented a technology that could
be manufactured using glasss high-throughput coating process instead of the slow,
cumbersome batch process of traditional crystalline silicon wafer-based PV -- and one
that had one-hundredth the feedstock requirement.
FIGURE E-1: THIN FILM PRODUCTION AND MARKET SHARE, 2002 - 2008
Source: The Prometheus Institute, GTM Research
Thin lm PV, though, was not born with First Solar, nor was it even rst
commercialized by the company: Sanyo introduced an amorphous crystalline hybrid
cell as early as 1974, and many Japanese companies (e.g., Fuji, Kaneka, Mitsubishi)
were selling thin-lm modules by the late 1990s. Interest in mass-producing
thin-lm technologies, however, remained marginal until the mid-2000s, when the
emergence of a polysilicon bottleneck-restricted crystalline silicon PV supply and it
made it more expensive. The search for alternative technologies led to a tidal wave
of investment and entrepreneurial activity in thin lm, with 46 companies entering
the market between 2004 and 2008, as well as $1.8 billion in venture capital
investment in the space. As market share rose from a mere 3% in 2001 to 12% in
2007, companies spoke condently of hundreds of megawatts of production at
below a dollar per watt being within arms reach. It was only a matter of time before
thin lm would replace crystalline silicon as the dominant PV technology, nally
enabling the long sought-after dream of grid parity.
FIGURE E-2: VENTURE CAPITAL INVESTMENT IN THIN-FILM PV, 2007 AND 2008
Source: GTM Research
Or was it? As of 2010, only one other company besides First Solar triple-junction
amorphous silicon rm United Solar has produced in excess of 100 MW annually.
If another company has broken the $1-per-watt module cost barrier, they have not
announced it. The cost structure of most amorphous silicon, considering its low
efciency, is barely competitive with crystalline silicon, and CIGS producers have
encountered technical issues in manufacturing that have forced them to delay
commercial production since 2007. To make matters more difcult, capital constraints
made banks and developers shy away from thin lm in favor of more mature and
abundant crystalline silicon modules for projects in 2009. First Solar aside, one would
have to admit that the results have yet to live up to the talk. As Asian crystalline
silicon PV producers continue to ramp down costs and increase capacity beyond the
gigawatt level, the question must be asked: will results ever meet expectations, and if
so, when? In other words, will thin lm fulll its potential and make meaningful inroads
into the solar energy landscape, creating new markets in the process? Or will it be
relegated to a bit-player role in the growth of the global PV market?
FIGURE E-3: BANKABILITY SENSITIVITY: MODULE PRICE DISCOUNT VS. RELATIVE DEFAULT RISK
E.2 What Factors Drive Thin Film Demand?
Assessing thin lms impact on the global PV market in the years ahead requires an
understanding of the factors that inuence demand for this technology, and how these
factors interact when determining technology selection in PV markets. Essentially, these
are all the variables come into play when computing the values of a specic set of nancial
metrics on a risk-adjusted basis for the project at hand, which include capital cost,
levelized cost of energy (LCOE), IRR, or net present value depending on the market and
application. As shown in Figure E 4, this list can be very extensive. It includes:
Operational characteristics such as module degradation rate,
temperature coefcient, and spectral response;
System cost variables such as module price and balance-of-system costs;
The price and availability of substitutes, i.e., crystalline silicon PV;
Market characteristics, such as incentive structures, market application
type, and environmental conditions (temperature, humidity, insolation);
Potential supply, which in turn depends on available manufacturing
capacity, throughput, and yield;
Qualitative factors such as perceived supplier, technology, and product
risk, which determine whether the project will ultimately receive nancing.
FIGURE E-4: REQUIRED COMPONENTS OF THE THIN FILM PRODUCTION/DEMAND MODEL
Each of the above factors ends up playing a material role in inuencing demand for
thin-lm PV and driving its installation. Thin lm economics, for example, become a lot
more attractive when polysilicon prices rise. Conversion efciencies affect both balance-
of-system costs as well as viability in space-constrained (rooftop) markets. Capacity,
throughput, and yield become gating factors for how much thin-lm PV can potentially
be produced, and therefore deployed. Temperature coefcients come into play when
considering projects in hot climates and desert environments. Incentive structures
determine whether capital cost minimization or energy output maximization is the end
goal. Moreover, supplier and technology-specic risks prevented many thin lm projects
from receiving nancing in 2009, even though project economics were very attractive for
$1 per watt amorphous silicon panels sold by suppliers like China-based QS Solar.
In practice, however, an analytical model that quantiably links all of these variables
to estimate thin lm production/demand by technology has yet to come into fruition;
particularly challenging is the question of quantifying the highly subjective factor of
supplier and technology risk. Absent such a model, the best one can do is to shed as
much light as possible on each of these different drivers, with the hope that this will
lead to accurate insights about the evolution of the thin lm market and its impact on
the global PV landscape over the next half-decade. That is the goal of this report.
E.3 Report Findings
The following are some of the major ndings of this study:
1. Thin-lm capacity will stand in excess of 10 GW of thin-lm capacity
by the end of 2012. Figure E 5 displays historical and estimated global thin
lm capacity. Capacity grew from just 349 MW at the end of 2006 to over
4.4 GW by the end of 2009, more than doubling every year. This reects the
attractiveness of investment in thin lm due to the impact of the polysilicon
shortage during that time. A large part of this was due to the rampant build-
out of First Solars operations, from just 25 MW in 2006 to 1.2 GW by the
end of 2009, as well as the emergence of a number of small and mid-sized
turnkey amorphous silicon manufacturers in 2008 and 2009. From 2010
onwards, the rate of expansion is expected to slow materially; this reects
more sober plans in the aftermath of global oversupply, low consequent
capacity utilization, and the lack of nancing. Still, there will be over 10 GW of
thin lm capacity by the end of 2012, and there is room for upside adjustment
if demand grows faster than expected. Amorphous silicon is expected to
constitute a dominant majority at 5.65 GW, while CdTe and CIGS will have
roughly even capacity share at 2.47 GW and 2.11 GW respectively.
FIGURE E-5: GLOBAL THIN FILM MANUFACTURING CAPACITY BY TECHNOLOGY, 2006 - 2012E
2. Amorphous silicon and turnkey CIGS production will dominate
Asian production. Looking at Figure E 6, which breaks out estimated
2012 capacity by both region and technology, it is clear that Asian countries
have adopted amorphous silicon as the technology of choice in the thin lm
department due to its low barrier to entry, although similar trends have also
emerged in CIGS production in Asia of late. Amorphous silicon is also likely
to lead Europe as well, with a number of early Applied Materials and Oerlikon
customers being based there. Although all three technologies are expected
to be fairly equally represented in North America by 2012, the growth in this
region going forward is expected to be largely due to the growth of a few of
the many CIGS manufacturers in the U.S. First Solars Malaysia plant will
make up 85% of the ROW (rest of the world) category in 2012, signaling that
thin lm is yet to take off outside PVs core manufacturing regions.
FIGURE E-6: 2012 THIN FILM CAPACITY BY TECHNOLOGY AND REGION
3. Best-practice producers across all technologies will achieve costs
of 80 cents per watt by the beginning of 2012, but there will be
signicant variation across producers. Figure E 7 displays forecasted
module costs for the beginning of 2012. CdTe costs are expected to drop
to about 70 cents by this time. While possible tellurium price spikes present
some risk to these numbers, the threat is limited by a thinner lm (down
to 2-2.5 nm) and higher feedstock utilization from conversion efciency
gains. In the case of amorphous silicon, it is expected that single-junction
technology will hit its practical efciency ceiling (8% to 8.5%) for many
producers by 2012, and will start getting phased out thereafter. Tandem-
junction, which just began to spread its wings in 2009, will take its place and
become more representative of the a-Si market, at 10% efciency. Costs
for these technologies are expected to range from $0.80 to $1.20 per watt.
CIGS should show an exponential improvement in costs from 2010 to 2012,
due to the commercialization of high-throughput manufacturing through roll-
to-roll processes by a few producers. For these rms, costs could be as low
as 80 cents a watt. On the other end, smaller fabs that persist with glass
substrates could be up to 50% more expensive, at $1.25 per watt.
FIGURE E-7: FULLY LOADED MODULE MANUFACTURING COSTS, 2012
4. First Solar will continue its dominance, remaining the largest thin
lm manufacturer in the world over the next three years. Figure E
8 presents the top 20 thin lm companies by estimated manufacturing
capacity as of 2012. As shown, First Solar is expected to maintain its
lead as by far the largest thin lm manufacturer in the world, with over 2
GW of capacity spread across its plants in Germany, France, Ohio, and
Malaysia. It is followed by Sharp (tandem-junction a-Si), Showa Shell
Sekiyu (CIS), Solyndra (cylindrical CIGS), and QS Solar (double junction
a-Si). Put together, the rms on this list made up almost 90% of total thin-
lm production in 2008, implying that most of the top current producers
should continue to be amongst the biggest in the industry in the near term.
They also make up almost two-thirds of total thin lm capacity in 2010 and
2012. Interestingly, for all of China/Taiwans regional dominance, only one
company (QS Solar) is in the top ten, suggesting that many of the producers
from this region are small and mid-sized rms whose survival over the
course of the next several years remains questionable.
FIGURE E-8: TOP 20 THIN-FILM MANUFACTURERS BY 2012 CAPACITY
5. CIGS and amorphous silicon (particularly turnkey line production) will
likely not see meaningful market share until 2012, when cost reductions
and efciency improvements will nally start to drive a competitive product
offering at an adequate margin. This is also the time horizon required for
bankability concerns to be alleviated for thin lm companies with quality
modules. Figure E-9 displays thin-lm market share for two scenarios, a
low-penetration scenario where overall market share stagnates at 21% by
2012, and a high-penetration share that assumes a share of 30% by this
time. In both cases, there is limited opportunity for a-Si and CIGS producers
after assuming 90 percent utilization for First Solar.
FIGURE E-9: GLOBAL PV MARKET SHARE BY TECHNOLOGY, 2012E
6. High-margin thin-lm production will be a game played by the select
few. A return to normal silicon prices over the next ve years and the dramatic
improvements that Chinese manufacturers have made in conversion cost and
silicon utilization will mean that the race between thin-lm and crystalline silicon
PV will remain a close one over the next ve years; the window of opportunity
is small and is constantly contracting. In particular, amorphous silicon will be a
low-margin product for most manufacturers, as shown by Figure E-10. There is
a serious need for producers to differentiate themselves from one another in this
space, and those that have had a head start will have a signicant advantage in
developing differentiated products; examples include Sharp (higher efciency)
and Signet Solar (downstream partnerships, parallel-wiring architecture). Single-
junction a-Si will become obsolete by 2012, as its cost/efciency combination
will no longer result in a protable product.
FIGURE E-10: THIN FILM GROSS MARGINS, 2010 - 2015
7. Amorphous silicon will have disproportionately higher market share in
non-European, non-feed-in-tariff markets. The success of amorphous
silicon will largely be dependent on the development of utility-scale solar
in the Middle East, U.S., India, and China given their suitability for this
technology (as simulated operating results from Figure E-11 suggest for
hotter climates). In particular, the technology will struggle to penetrate
rooftop feed-in-tariff markets where space is a constraint and maximizing
gross returns is considered paramount.
FIGURE E-11: SIMULATED OPERATING PERFORMANCE BY PV TECHNOLOGY AND LOCATION
Source: NREL Solar Advisory Model, GTM Research
8. As efciencies improve beyond the 12% level, thin-lm modules
will enjoy increasing share in the residential market. BIPV products
introduced in 2011 and 2012, such as Dows solar shingles, will serve to
expand thin lms reach in this segment. Figure E 12 indicates CIGS module
efciencies for all manufacturers in the commercial stage. While in 2008,
top CIGS module efciency stood at 11.5% (Wrth Solar) and 11 rms had
module efciencies of 9% and above, today these metrics stand at 13% and
14 rms respectively, indicating that signicant progress has been made by
manufacturers in increasing efciencies. At this rate, it is not inconceivable
that CIGS efciencies could one day catch up with those of traditional
multicrystalline silicon, which currently has module efciencies of around 14%.
FIGURE E-12: CIGS MODULE EFFICIENCIES, 2009
Source: Company datasheets, GTM Research
9. All signs point to one of the venture-backed CIGS companies
(Solyndra, Nanosolar, Miasol) emerging as successful
representatives of this technology. The future of CIGS as a low-cost
technology lies in producing it on exible substrates at large scale. At the
same time, exible substrates also have lower efciencies, meaning that
continual R&D investment will be required to improve efciencies and drive
competitiveness. For the most part, CIGS on glass will be a niche market.
While prior to 2009, most VC-backed exible substrate rms had precious
little to show for all the investment, the past year saw three of them enter
into commercial production and achieve key technological milestones.
Nanosolar, which uses a unique process that involves printing nano-particle
CIGS ink onto aluminum foil, announced that it was producing modules
at an annual run rate of 12 MW, had top cell efciency veried by NREL
at 16.4%, and unveiled its TUV/IEC-certied Utility Panel for large-scale
deployment. Solyndra, which produces cylindrical panels for commercial
rooftops, indicated it had sold 17.3 MW in the rst nine months of 2009,
including a 1.9-MW system in Belgium, and had reached module efciency
of 11% to 14%. Moreover, Miasol, which deposits CIGS on exible steel
rolls using a sputtering process, announced it had started shipping panels
in October 2009. Figure E 13 summarizes these developments.
FIGURE E-13: KEY PROGRESS INDICATORS FOR VC-BACKED CIGS FIRMS IN 2009
10. Past 2013, low-cost CIGS systems will rapidly begin stealing share
from crystalline silicon (and perhaps CdTe) in IRR-governed U.S.
utility-scale markets. By 2012, a few CIGS producers will begin to attain
manufacturing costs and efciencies on par with First Solar, which will
drive competitive economics, especially in non feed-in tariff markets where
minimizing capital costs is paramount. Nevertheless, CIGS adoption at
the utility scale will be far from immediate, especially in the U.S., given the
demonstrated risk-averseness of U.S. utilities; this will also be true when it
comes to nancing large-scale CIGS utility systems in Europe. Performance
and degradation concerns will have to be alleviated before mass adoption
proceeds, which may take two or more years.
11. The coming years should see a great deal more consolidation than
has been witnessed so far in the thin lm industry. Many companies
that lack the cushion provided by a large corporate parent will lose the race
between protability and solvency. Mid-sized amorphous silicon companies
will be especially susceptible to this trend, as there is a natural t for companies
that use equipment from the same vendor (as in the example of Applied
customers Sontor and Sunlm). In the case of CdTe and CIGS, this will take the
form of selling and licensing of IP assets (as has been witnessed in the case of
CIGS startup Daystar). Evidence for this thesis comes from Figure E 14, which
displays mid-year capacity utilizations for CIGS and amorphous silicon.
COMPANY TECHNOLOGY CAPACITY PRODUCTION EFFICIENCY CERTIFICATION
Nanosolar Nano-printing on aluminum foil 640 MW 12 MW (annualized run rate) 16.4% (best cell), 11-12% (median cell) TUV, IEC
Solyndra Cylindrical panels 70 MW 17.3 MW (Jan - Oct 2009) 11 - 14% (module) IEC, UL
Miasol Sputtering on exible steel 60 MW 10.2 - 10.5% (average module) IEC, UL
FIGURE E-14: MID-YEAR CAPACITY UTILIZATION, CIGS AND AMORPHOUS SI, 2009 2012
1.1 Report Structure
As discussed above, the aim of this report is to comprehensively analyze all of the
rst-order drivers that come together to inuence thin lm demand in the nal analysis.
Accordingly, each section of this report is focused on a specic determining factor.
Section 2 provides an overview of the various PV technologies currently under
development and production.
Section 3 discusses the advantages and challenges of thin lm manufacturing
processes and material requirements.
Section 4 examines key operating and technical characteristics, including conversion
efciencies, degradation rates, light and temperature sensitivity, module weight/area
footprint, and energy yield.
Section 5 provides a comprehensive overview of major developments and trends in
thin-lm PV in 2009.
Section 6 looks at existing markets and applications for PV and how well thin-lm
products are suited to each.
Section 7 analyzes manufacturing cost structure for thin-lm modules and the
evolution of costs, prices, and prot margins over time.
Section 8 covers historical and projected module manufacturing capacity through
2012 by company, region, and technology.
Section 9 discusses historical and projected thin lm production and market share.
Section 10 summarizes the key insights and predictions that emerge from the report
and offers concluding thoughts.
Section 11 proles prominent and upcoming thin lm manufacturers, detailing key
information such as company history, conversion efciency, manufacturing process,
location of production facilities, and capacity and production projections.
ASTRONERGY (CHINT SOLAR)
Year Founded 2006
Year Production Started 2009
Technology Type a-Si/cSi
Location China
Module Efciency (%) 9
Substrate Type Glass
Manufacturing Process Oerlikon CVD
Website www.astronergy.com/
Formerly known as Chint Solar, Astronergy is a member of Chint Group, which is a
player in the low-voltage electrical, power transmission and distribution industries
in China with 2006 sales of $2 billion. The company purchased turnkey equipment
from Oerlikon and began production of amorphous silicon modules in 2009. It also
produces conventional crystalline silicon modules as well. It is targeting the utility,
commercial, and BIPV markets with its amorphous Si products. In March 2009, it
raised $50 million from Cybernaut China Investment and Shanghai Lianhe Investment
to expand its manufacturing operations. The company won a bid for a 2-MW rooftop
project in Hangzhou Energy and Environment Industrial Park in China, and was
awarded at least six of the 275 Golden Sun PV power plant demonstration projects
announced by the Chinese Ministry of Finance in December 2009.
Astronergy Year-end Capacity
Astronergy Production
YEAR 2007 2008 2009E 2010E 2011E 2012E
Historical / Potential Production 0.0 0.0 11.3 56.3 90.0 90.0
Year-end Capacity 0.0 0.0 30.0 120.0 120.0 120.0
SAMPLE COMPANY PROFILE
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GTM RESEARCH MARCH 2010

THIN FILM 2010: MARKET OUTLOOK TO 2015

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