First Solar: Quest for the $1 Watt

In some parts of the world, competing with grid electricity itself may be an easy game during peak consumption hours. But if you want the off-peak market, you’ll have to price your cells at about US $1 per watt. That price is called grid parity, and it’s the holy grail of the photovoltaic industry. At least 80 firms around the world, from Austin to Osaka, are in the chase.

Surprisingly, at the moment no company is ­closer to that grail than a little start-up called First Solar, which until very ­recently had been known only to specialists. It’s located in Tempe, Ariz., and analysts agree that it will very likely meet typical grid-parity prices in ­developed countries in just two to four years. It’s got a multibillion-dollar order book, it’s selling all the cells it can make, it’s adding production capacity as fast as it can, and its stock price has rocketed from $25 to more than $250 in just 18 months.

The most tantalizing fact about First Solar? The company will not talk to reporters. At all.

The company’s coyness seems to be related to the nature of its industrial secrets. These have less to do with First Solar’s device—a decades-old design based on a thin film of cadmium telluride—than with the way the company manufactures it. Somehow, First Solar has scaled up the light-catching area from postage-stamp to traffic-sign dimensions. What the company does ­reveal is that its product has three massive cost benefits. Its ­active element is just a hundredth the thickness of the old standby, silicon; it is built on a glass substrate, which enables the production of large panels; and manufacturing takes just two and a half hours—about a tenth the time it takes for silicon equivalents.

Today’s modules deliver up to 75 W at a conversion efficiency of 10.6 percent and have a manufacturing cost of $1.14/W. This is way below the selling price of $2.45/W, so the company enjoys a healthy profit margin. However, to compete against fossil-fuel sources on the free market and pick up a tidy profit, the company will have to get manufacturing costs down to ­between $0.65/W and $0.70/W. To do so, it has told investors that it needs to reduce manufacturing costs and increase conversion efficiency to 12 percent. Getting there is entirely feasible, as CdTe cells have a theoretical maximum of well over 20 percent; the National Renewable Energy Laboratory, in Golden, Colo., has already produced cells with 16.5 percent efficiency.

The sooner solar gets to grid parity the better. If First Solar can do it in 2-4 years that would be fantastic, and now would still be a good time to pick up some of that FSLR stock.

Makes you wonder if they did talk to reporters what would be the impact? Would other competitors be able to copy their techniques? If so, would this give First Solar more competition and lower the price of solar power? And if the price of solar power were lowered would this lead to increased sales and more solar power being used? Then by not talking to reporters are they slowing the adoption of solar power in order to increase their profit margin and stock price?

On the other hand, it certainly appears First Solar can't keep up with their own demand, so if another company were to jump into the mix, the sales of First Solar wouldn't be impacted at all. In this case, by not talking to reporters they are slowing the adoption of solar power in the world and getting no benefit for themselves. Either way I think the world would be better off if others could use First Solar's techniques to produce solar power so cheaply.

The article goes into more detail about how they actually produce their cells and is an interesting read.

via IEEE Spectrum