Cadmium Tellurium Thin Film Solar Technology championed by thin film solar panel leader First Solar is set to become a victim of capitalism’s creative destruction as cheap crystalline silicon panels from China have forced Abound Solar and GE to down shutter on their factories. Note Cd-Te which is the largest selling thin film technology in solar panels always had some issues. First Solar was targeted many times for using Cadmium which is one of the most toxic elements. However given that Cd-Te compound is not toxic as such, First Solar managed to evade questions each time as it grew from strength to strength. The high polysilicon prices in 2008-2011 had made silicon solar panels much more expensive relative to Cd-Te solar panels giving First Solar a huge advantage and fat margins. However the crash in polysilicon prices and astounding cost reductions by Chinese solar panels makers has put the cost on par. With costs the same and Cd-Te panels having much lower efficiency, it is game over for Cd-Te technology.
With First Solar itself in trouble having to sharply lower utilization at its gigawatt scale factories, it was always going to be tough for entrants like GE and Abound Solar. Though both companies had a good amount of funding, the relentless price war by Chinese solar panel makers has made both of them down shutters. Note thin film solar technology has already seen a large number of exits from a number of players like Konarka, Oerlikon (selling out), Sulfurcell and others.
While the solar bankruptcies that are going on for the last year or so are nothing new, the pace has accelerated in recent times. With even the biggest thin film manufacturers, First Solar finding its products noncompetitive in the face of cheap Chinese c-Si solar modules, the smaller start ups are facing extinction. Even the older established companies are now declaring bankruptcy as they see no prospects even in the future. Odersun and Konarka are the two thin film companies who have gone down in recent times. In an earlier post, prediction of a second wave of thin film bankruptcies had been given with Suntech exiting the thin film game. That prediction is coming true with thin film companies giving up with no prospects of their ever being able to match the Chinese crystalline solar panel costs which are going down by a dramatic 15-20% each year. Coupled with low efficiency and low scale, these smaller companies despite their innovative technologies have no hope. Even consumers of Oerlikon’s a-Si technology have started closing their factories even as Oerlikon has sold its thin film division to Japanese semiconductor equipment heavyweight Tokyo Electron. Note Applied Materials has closed it’s a-Si division during the first wave of thin film bankruptcies in 2009 and 2010.
Abound Solar closed down a couple of weeks ago and now GE has announced that it will stop production at its Colorado factory which it had started with much bragging and fanfare a year ago. On GWI, the claims made by GE were always regarded with skepticism and now they have proven to be hollow. It remains to be seen when First Solar too has to abandon its Cd-Te factories given that it has stopped selling solar modules to outside customers because of lack of competitiveness.
It is surprising to see the US Media jumping about saying the General Electric will build the biggest solar factory in the US when it is completely factually wrong. There are other companies that add 400 MW in a single quarter these days (eg.LDK). By the time GE builds its 400 MW Cadmium Tellurium Solar Panel facility, there will be around 20 players in the world with more than 1000 MW capacity. GE has been claiming high efficiencies for its Thin Film Solar Panels but the claims that it will be able to dethrone First Solar as the Leader seems far fetched currently. Note First Solar will have almost 7 times more capacity worldwide by the time GE builds its first solar panel facility. GE has been long been developing the Cadmium Tellurium Technology buying up Prime Solar.
GE Solar on Hold or Dead?
General Electric Co. says it won’t be adding scores of new renewable energy jobs locally as previously expected after it put on hold plans for a $300 million solar panel factory in Colorado. New York state had aggressively vied for the Colorado plant, which GE awarded to Aurora, Colo., last October. Solar panel manufacturing has plummeted in the U.S., dropping from 335 megawatts produced in the first quarter of 2011 to 160 megawatts during the first quarter of this year, according to the Solar Energy Industries Association. SEIA, a trade group, blames increased global competition and trade disputes. The U.S. government has responded by putting tariffs on Chinese solar imports, but the results won’t be felt until next year, the organization believes.