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2 July 2008


Thin film to take 28% of PV market by 2012

After years of heady growth in the photovoltaic market led largely by crystalline silicon, thin-film PV technology has reached critical mass and is poised to grow to $19.7bn in sales by 2012 (taking a 28% share of the solar market) due to low-cost materials and manufacturing processes, according to the new 137-page report ‘Solar State of the Market Q1 2008: The End of the Beginning’ from Lux Research.

Thin-film silicon technologies from turn-key vendors will be ramping up in large scale in second-half 2008, while cadmium telluride (CdTe) module producers such as market leader First Solar Inc of Tempe, AZ, USA - and new entrants Calyxo GmbH of Bitterfeld-Wolfen, Germany and PrimeStar Solar Inc of Golden, CO - execute aggressive ramps. Meanwhile, copper indium gallium diselenide (CIGS) module manufacturers are approaching technology viability, with what Lux Research describes as ‘tremendous disruptive potential’.

The growth rate for thin-film technology will become more robust from second-half 2008 onwards. However, with over 100 companies developing inorganic thin-film solutions (most with unproven or undifferentiated technologies), clear winners and losers will rapidly emerge.

“CdTe module manufacturing costs are less than one third that of crystalline silicon, and the new amorphous silicon turn-key lines by Applied Materials and Oerlikon promise half the cost to start with further declines in the future,” says senior analyst Michael LoCascio. “These technologies will be the first choice for the burgeoning utility sector, squeezing out incumbent technology,” he adds.

The Lux Research report also finds that:

  • High-concentrating PV systems (using high-efficiency but high-cost multi-junction PV cells) will disappoint through 2009, as system complexity, limited robustness in harsh deployment environments, and the need for great precision dashes the hopes of developers for a smooth, rapid ramp. Products will be mature enough for deployment thereafter, but installations using multi-junction PVs will reach just $1.23bn in 2012.
  • Solar thermal technologies (concentrating solar power, or CSP), like those used at the 64 MW Nevada Solar One power plant that began operations last July, will begin to make an impact on the utility market for solar power, but face an uphill battle for adoption due to the limited power distribution infrastructure and the beginnings of regulatory aversion towards large-scale solar installations. By 2012, new annual solar thermal installations will reach 3.26GW, accounting for $9.34bn in revenue.

  • Organic and Gratzel PV technologies, which promise much lower costs than any other approach (as well as the possibility of extremely flexible, and even wearable, solar cells) won’t mature in the next five years. However, beyond 2012 these technologies are likely to have a major impact, albeit in unexpected applications.

  • By 2012, cost reductions will bring solar to peak power grid parity in some places, e.g. in countries with high insolation and growing low-cost domestic production, like India.

The report also finds important implications for start-up firms with disruptive technologies targeting the solar industry. “As roughly 100 thin-film developers race to market over the next few years, we expect most of them to fall by the wayside as technology hurdles overcome them - which will especially be the case for novel CIGS producers,” says senior analyst Ted Sullivan. “The remaining thin-film developers with viable technology will be snapped up by incumbent players eager to insert themselves into the growing new segment - as CIGS developer, Global Solar, has been by Solon,” he predicts. “Investors and market watchers should expect to see only one or two ‘home-run’ plays, similar to First Solar, coming out of the impending thin-film ramp.”

See related items:

IBM and Tokyo Ohka Kogyo to co-develop CIGS PVs

Thin-film solar market to reach 9GW in 2012

Solar VC investment reaches record $280m in Q1

Thin-film to grow from 10% to 19% of PV market by 2012

Search: Thin-film solar First Solar CdTe CIGS Applied Materials Oerlikon a-Si PrimeStar