A Solar Array by First Solar: PhotoCredit First Solar
As prices of solar panels continue to fall, competitive pressures are mounting on companies to keep their products competitive, and improve their efficiencies. Industry leader, First Solar, has just announced setting a new world record for cadmium-telluride solar cells, reaching a 17.3% efficiency, in a laboratory setting. First Solar's current products achieve an 11.7% efficiency.
Most solar panels are made of silicon and have slightly higher efficiencies than cadmium-telluride panels, but are more expensive to make. Ucilia Wang, at GigaOm, provides a useful overview of the changing dynamics of three competing production technologies in the solar industry in First Solar boasts world-record solar cell.
Thin film solar leader First Solar says it’s even gotten a world record out of its latest efficiency developments, ... a 17.3 percent efficient solar cell.
The new record is critical not for bragging but for showing solar panels made with cadmium-telluride cells can have a longer presence in the market than previously expected.
Solar panels can be produced with Cadmium-telluride, traditional silicon, or a new silicon-ink" technology. Part of the dynamics behind the amazing 50% drop in prices for solar panels in the last two years can be understood as a battle between the companies behind these different technologies competing for survival, and to capture this rapidly growing industry for the future. Who wins this battle may determine how many manufacturing jobs for solar panels will remain in the United States.
First solar current products cost $0.75/watt of generating capacity. IMS Research reports that silicon based solar panels produce at a range of $1.40/watt to $1.80/watt.
My understanding of the complicated competitive dynamics is as follows. SunPower, is the industry leader in ilicon based panels and sells solar panels with an efficiency of 22.4%, although, when mounted in arrays the average is closer to 20%. (UPDATE: Jam noticed in the original version of this post I incorrectly reported Sunpower was Chinese company. It is not. Its headquarters is located in San Jose, and French oil company Total SA just purchased 60% of SunPower which has manufacturing facilities in Malaysia, Phillippines, and South Korea.) So even though these panels currently cost more, industry analysts have concerns if First Solar, the last major US based solar panel manufacture, will be able to survive as fierce price declines eventually take away the current cost advantage of cadmium-telluride based panels.
The most efficient silicon solar panel on the market today is the recently launched 20 percent panel made by SunPower. The SunPower panel contains cells that can do 22.4 percent efficiency.
SunPower and fellow silicon solar panel makers are eager to improve their products’ efficiencies as well, particularly given that silicon solar panel prices have fallen more than half in the past two years. In the last six weeks alone, the prices have fallen by 15 percent, according to IMS Research. The average price was close to $1.80 per watt in the first quarter of this year, and it’s reached below $1.40 per watt, IMS said.
Global prices for solar panels have been falling rapidly due to the lapsing of government subsidies forcing sellers to reduce prices to keep their product attractive to customers, as well as a supply glut as global industry capacity grows exponentially.
Traditional marketing models predict that such new high growth industries face "shake outs" where initial industry pioneers often fail to survive shifting technologies, and economies of scale by latter entrants to the market.
Making the competition even more interesting, a company named Innovalight, just purchased by Dupont, are licensing their new "silicon-ink" production technologies that claim to improve efficiencies even more.
I'm hoping that First Solar can stay in the race for providing such a vital technology for the future. The solar industry will play a critical role for our nation and the world over the next 100 years, or more. It would be beneficial to the American economy and job creation for companies like First Solar to remain competitive.
11:15 AM PT: