Opportunities in turbulent PV equipment market

Ms. Fatima Toor, analyst, Lux Research, recently presented on opportunities in turbulent PV equipment market, in association with SEMI, USA.

Global PV market trends
Bankruptcies are galore. Eg. Solyndra, Abound Solar, Konarka, etc. Global trade wars are also on the rise. There are US tariffs on Chinese solar cells. There is also an EU investigation on Chinese solar panels. Then, there are Chinese investigations on US, EU and Korean polysilicon dumping. Government incentives have been lowered in the EU, but raised in Asia and Americas. Following Barack Obama's re-election in the US, the environmentalists are again upbeat about green energy.

Global PV demand increase will be driven by Asia and Americas in the coming years. Emerging markets will grow over six times in size from 2011-2017. Crystalline Si will be the dominant installed PV technology, at least till 2017. Gap between demand and supply will close.

The Q3-12 geographical capacity distribution would be across PV value chain. China leads in polysilicon, cells and modules supply. Chinese equipment manufacturers market share has been on the rise, ramping up competition for Western equipment suppliers.

Lux Research sampled 493 PV manufacturers. Of these, 40 percent are based in the EU, 28 percent are based in China, 17 percent are in the US and 15 percent are in the Rest of the World.

Opportunities for equipment manufacturers in current market state
Cost, efficiency and price are fundamental drivers of PV industry. Innovations across the value chain will enable higher margins for PV industry. The desire for cell and module manufacturers to reduce costs and differentiate will drive opportunities for equipment manufacturers.

Crystalline Si technology: Innovations across crystalline Si value chain would enable opportunities for equipment suppliers. Fluidized bed reactor (FBR) process requires 10 lWh/kg and is a continuous process. Why is FBR only 6 percent of total polysilicon capacity today? The reasons are:
* No off-the-shelf FBR reactors are available.
* Process complexity requires that Si granules can be polluted by impurities.
* There is an opportunity for equipment manufacturers to develop off-the-shelf FBR equipment that will enable reduced production costs for polysilicon.
* GCL announced developing its FBR technology.
* Samsung Fine Chemicals and MEMC have partnered to set up FBR polysilicon production due to its lower production costs.

Monocrystalline silicon (c-Si) ingot growth using Czochralski (CZ) method is high cost and results in pseudo-square c-Si wafers. Plate seed for qc-Si ingot growth with mc-Si grains on the edges and c-Si in the middle. ReneSola has technology with wafer capacity of 2GW of which 1.6GW is qc-Si Virtus wafers and 0.4GW are c-Si wafers. ReneSola is likely to be one of the Chinese companies to survive the shakeout due to its strategy and technology.

Opportunities exist to optimize qc-Si ingot growth. Modified directional solidification (DS) furnace makers claim 90 percent c-Si and 10 percent mc-Si yields during qc-Si ingot growth. In reality, 60 percent c-Si and 40 percent mc-Si results in high wafer binning and sorting costs. This provides an opp for equipment manufacturers to improve the c-Si yield to higher than 90 percent. The Qc-Si capacity is likely to increase in the coming years as DS furnace manufacturers innovate.

Wafer manufacturing steps have improved for mc-Si and c-Si ingots where c-Si wafer slicing requires additional step of ingot squaring resulting in significant Kerfloss. Solexel develops thin film superstrate (TFSS) epitaxial silicon (epi-Si) solar cells using laser cutting based wafer release. Solexel has achieved 20.6 percent cell efficiency on a 156x156mm cell and aims to reach module costs of $0.42/W at scale. SunPower is a recent investor and plans to build a 1GW facility in Malaysia by 2014.

High efficiency cell designs provide significant opportunities for equipment manufacturers. Canadian Solar is a tier 1 manufacturer of crystalline Si wafers, cells and modules. Champion c-Si MWT cell is 21 percent efficient and 19.2 percent efficient in production. Selective emitter (SE) c-Si cells reach efficiencies of 18.8 percent. Canadian Solar is now ramping production of metal-wrap through (MWT) cells to 120MW capacity by end of 2020. It will likely have 280MW of SE cell capacity.

An optimally automated 50MW module manufacturing line requires 11 workers per shift, instead of 46 needed for a manual line. Apollon Solar is an x-Si equipment manufacturer focused on vazcuum-sealed EVA free modules. It claims cost of ownership savings between $0.13/W and $0.16/W, and better lifetime performance than traditional modules.

CIGS and CZTS technologies: CIGS manufacturing process is vertically integrated and highly automated. Depreciated capital and materials dominate CIGS manufacturing process costs due to custom equipment, low process yields and low materials utilization. Process costs for CIGS will drop $0.10/W to $0.13/W between 2012-17 due to higher process yields and better materials utilization.

Copper zinc tin sulfide (CZTS ) will be a cheaper alternative to CIGS and provide opportunities for the equipment manufacturers to enable low temperature processes suitable for CZTS. Crystalsol develops CZTS flexible modules based on crystalline semiconductor particles with a diameter of 30um to 60um arranged as a single layer fixed by polymer film.

CZTS crystals are grown using seeded growth method at 800 degrees C. It has a champion cell efficiency of 6.74 percent and claims production cost of $0.5/W to $0.8/W at 50MW scale. As of now, Crystalsol is targeting BIPV applications mainly. The technology has longer lifetime than OPV, but needs to improve the cell efficiency for commercial feasibility.

CdTe and GaAs technologies: CdTe/CdS module manufacturing is highly automated, but needs optimization in terms of yield and materials utilization. CdTe module manufacturing costs will reach $0.45/W by 2017 due to the improved efficiencies and production processes. Single-junction GaAs-based flexible PV modules will enable equipment opportunities in the long run.

Alta Devices is developing cells based on thin-film GaAs layer, which is epitaxially lifted from a GaAs wafer. It is targeting portable power, military, unmanned aerial vehicles (UAV), electric vehicles, rooftop, utility-scale and BIPV applications. Equipment innovations will be necessary for reaching scale.

Outlook of PV equipment landscape
PV innovation is not done yet. Opportunities exist across the entire PV value chain for equipment manufacturers. Crystalline silicon will be the dominant PV technology in the foreseeable future, and the drive for product differentiation and reduced manufacturing costs will enable opportunities for equipment manufacturers.

New material stacks, such as epi-Si, CZTS and GaAs will provide revenue generation opportunities for equipment manufacturers. Equipment manufacturers that enable lower production costs and higher module efficiencies, are set to be tomorrow's winners.