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Monday, 01 December 2008

Harnessing the Sun

According to recent statistics from the U.S. government, global energy consumption will increase by close to 40% by 2030 to nearly 700 quadrillion BTUs from its present level of 500 quadrillion BTUs. On average, the increase in developed countries such as the U.S., Japan and Germany will be 17%, following an average growth rate of 0.7% annually. In developing countries, the increase will be closer to 67% by 2030, following an average growth level of 2.5% annually.

This article originally appeared in Ceramic Industry News: December, 2008

On the other hand, the reserve of the primary energy sources is rapidly decreasing. The main sources of energy considered are oil, natural gas and coal. Estimates indicate that there is only enough oil to meet demand for 40 years, natural gas for 55 years, and coal for 200+ years.

Further, the increasing concern over environmental issues, including the level of CO2 emissions these energy sources burn and the greenhouse effect, has compounded the concerns. The situation has led to a global movement to reduce carbon emissions and a host of legislation on local, national and international scales. The most outstanding of these initiatives is the Kyoto Protocol, which requires signatory countries to reduce their carbon emissions by 5.2% of their 1990 levels by 2010.

Environmental issues have also led to a serious examination of the commercial viability of alternative energy sources that could, within the next generation, displace global reliance on oil, natural gas and “dirty” coal. The choices under consideration for alternative energy sources include wind power, which is currently the most economically self-sufficient; clean coal, which continues to be a source of strong opposition both industrially and politically; nuclear power, which, in most instances, has proven safe but runs against strong popular opposition (particularly in the U.S.); biofuels, which meet resistance because of their entanglement with food markets; geothermal, which uses the heat of the earth’s interior to generate energy; hydropower, which uses the motion of water; and solar energy, which converts the light and heat of sunlight into electricity.

Solar energy has long been the most widely supported alternative energy source, theoretically because it offers the greatest potential and has an extremely low level of CO2 emissions-5 tons per gigawatt hour vs. 530 tons for oil and natural gas. However, it is extremely difficult to manufacture efficient solar cell panels, and their production has basic economic obstacles to overcome before being viable on a mass scale.

The remainder of this article focuses on the solar cell industry, which has shown the most activity in R&D and determined development over the past several years. Three factors contribute to this:

  • The industry is on the verge of major breakthroughs in terms of technology, materials science and system construction that will drastically lower costs and make solar power affordable on a mass scale.
  • Once an affordable system is developed, the source of energy is readily available on a global scale.
  • Global awareness of the need for an affordable, sustainable energy source has led to support in both public and private sectors.
What is a Solar Cell?

A solar cell, or photovoltaic (PV) cell, is a device that converts light into electrical energy. Two types of solar cells have been successfully manufactured and commercially pursued: wafer-based and thin-film-based. Wafer-based cells (particularly silicon) make up the largest portion of the market, but there has been significant improvement of thin-film-based cells, and a definite market shift is taking place.

In addition, other types of solar cells are currently in the research stage. These include cells based on nanoparticles, conductive polymers, transparent conductors used in conjunction with thin-film technology, and other experimental types.

Silicon wafer-based solar cells will likely dominate the market at least throughout the forecast period, and likely for the next 10 years. Generally, the manufacture of a silicon wafer-based solar cell-the most widely manufactured type of solar cell-occurs in the following steps:

  • Growth of single crystal, whether it be silicon or some other semiconductor material. The material is doped to produce surplus electrical charges (+ or –) in the various layers.
  • The crystal is then removed and ingots are formed.
  • The ingot is cut into thin wafers and usually doped again to create a p-n junction just below the surface. The differing charges cause an electric field to be established where electricity can be carried.
  • The wafer is coated with an antireflection coating to increase efficiency in light gathering. The surface can also be textured to increase the area for light gathering.
  • A conductive contact grid is screen-printed to the cell to enable the transmission of the power (DC current).

The individual cells are then connected (using a grid of conductive cable or wire) and made into panels. Panels are protected by a plate of glass or plexiglass, strengthened from the rear by a polymer backing, and mounted in frames for installation. Installation includes integration into the greater electrical system, which usually includes secondary power units (batteries, inverters and converters). These secondary units are used in bad weather and at night; as backup power, which can include a larger power plant or generator; and in the integration into the AC power grid.

Photovoltaic Power Market

From 2007 to 2008, the photovoltaic power market grew by 40%, representing approximately 2.7 million Kw (or 2.7 gigawatts) of newly installed photovoltaic output. That brings the world total close to 9.0 gigawatts of total PV power consumed, and the growth level is not expected to decrease over the next five years.

The main markets for photovoltaic power continue to be in Europe, particularly Germany. In 2008, Germany was responsible for nearly half of the PV installation worldwide. After Germany, the U.S. and Japan continue to grow rapidly.

Total Cell Market

In 2008, the global market for solar cells will exceed $4.0 billion. From 2008 to 2013, the market is expected to grow at an average annual rate ranging from 15-30%. Thus, by 2013 the global market for solar cells should exceed $10.0 billion, depending on supply chain factors, continued development and decreases in manufacturing costs.

China has moved rapidly to become one of the largest suppliers of solar cells. Total solar cell expansion investments in China exceeded $15.0 billion in 2007. Approximately 50 companies in China are either in or are entering the solar cell market. The majority of these use Siemens process production lines and utilize polycrystalline silicon; thus, the shortage of silicon has hampered growth to a degree.

Solar cells are composed of semiconducting materials, including silicon, and compound semiconductors, such as gallium arsenide. These are referred to as first-generation solar cells. Second-generation solar cells are those based on thin-film technology and dye-sensitive technology. In 2008, the market for silicon solar cells accounted for 83% of all solar cell demand (see Figure 1). Silicon will remain the main raw material for solar cells throughout and beyond the forecast period. By 2020, silicon is still expected to represent the majority of solar cell demand, but its percentage of total demand is predicted to drop to approximately 53%.

Compound semiconductor solar cells show the highest growth rate from 2007-2008, with a compound annual growth rate (CAGR) of 87.6%. Silicon thin-film solar cells follow, with an annual growth rate of 76.0%. In 2008, compound semiconductor and silicon thin-film solar cells comprised 8.0% and 5.7% of total market demand, respectively.

Major Trends

Several major trends are predicted over the next five years. The major short-term obstacle in the solar cell industry is a shortage of polysilicon. The largest polysilicon producers are Hemlock, Wacker Chemie, REC, Tokuyama, MEMC, Mitsubishi Materials, and Sumitomo. These companies accounted for approximately 68% of global production in 2008. However, each indicated some sort of shortfall in supply due to both an increase in semiconductor demand and a need for greater production capacity.

This shortage, along with the corresponding need to meet growing demand for solar cells, contributes to the increase of production of other types of solar cells. However, the supply levels should return to a balanced range in 2009. Thus, it is expected that strong growth spurred by decreasing prices and better margins can be expected starting in 2009.

Prices for solar cells and total systems will continue to come down as manufacturing costs decrease. This will drive cost per kilowatt/hour down for solar power and will bring the cost of solar power much closer to that of current energy sources. On average, the difference in cost between solar power and traditional sources is approximately $0.32/Kwh. In some countries, such as Japan, it is as low as $0.08/Kwh.

Reduced pricing will drive the greater acceptance of solar power. Demand will grow in large consumer countries such as China and the U.S., and overall consumption will continue to be strong in countries like Germany and Japan.

The efficiency of solar cells will continue to increase. (Efficiency relates to the proportion of available energy converted to electricity.) Two examples are important to note. Researchers at the Fraunhofer Institute for Solar Energy Systems ISE in Freiburg, Germany, have increased efficiency to 39.7% using compound semiconductors. More recently, researchers at the National Renewable Energy Laboratory in the U.S. have increased efficiencies to 40.6%, setting a global record.

Finally, research will continue in both the development of new solar energy technologies-particularly within compound semiconductors, nanomaterials and polymers-as well as in the refinements of existing, proven technologies. Some major advances in manufacturing technology include the ability to produce thinner wafers, thus reducing total raw material costs, and greater use of automation for wafer production.

Opportunities Abound

The market for solar cells offers exciting prospects for the transformation of how we produce and deliver energy. The potential of this market will be developed and realized in the near future.

To read the full article online, please go to: Ceramic Industry News.

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About Dedalus Consulting

Dedalus Consulting Inc. is a privately owned and independently operated market research publisher and consultancy. Our research focuses on both emerging and mature markets in high-technology sectors, including machining & materials, electronic components, life sciences, nanotechnology, mobile communications and photonics.

Research is continually updated through a methodology based on primary interviews with key executives. Companies interviewed include manufacturers, end-users, distributors, and research institutions.

Our clients include Fortune 500 companies, start-ups, financial analysts, and research organizations engaged in the development and manufacturing of advanced technology products and services.