Will markets cooperate with cheap solar?

California-based energy company Nanosolar has opened an automated manufacturing facility in Germany which allows it to make cheap solar panels, by printing a semiconductor material called CIGS on aluminum foil. This exciting new method means significantly less expensive solar-power technology could soon be put into mass production. However, there is concern over whether market players will allow the cheaper production costs to translate into cheaper mass-market prices.

Government incentives in Germany have created a large market for solar panels, and Nanosolar claim it has the potential to make 640 megawatts worth of solar power there per year.

Industry analysts have claimed for some time now that silicon could have had its day as the lead component in solar-panel technology, as cells made of the CIGS semiconductor, which is composed of copper, indium, gallium, and selenium, have emerged as genuine replacement candidate. In the lab at least, CIGS cells have reached efficiencies comparable to that of silicon cells. In theory, they could be manufactured using an extremely cost-effective printing process, but developing manufacturing processes that maintain the high efficiencies has proven difficult.

This is where Nanosolar comes in. At the moment, the average solar cell converts just 11 percent of the sun's energy into electricity, according to Nanosolar CEO Martin Roscheisen. However, this is high enough to compete with conventional solar panels thanks to developments that improve performance and lower installation costs. Roscheisen estimates that in sunny locations, power plants made using these panels could produce electricity at five to six cents per kilowatt hour, based on Department of Energy methods for calculating the amortized cost of solar panels over their lifetimes. That's near the cost of electricity from coal and significantly less than most solar power.

To address the problem of low efficiency, Nanosolar has increased the current its panels can generate, in part by using large aluminum-foil sheets to collect electrons from each panel. This, together with other modifications, effectively decreases the amount of wiring per panel, simplifying installation and reducing the cost of materials. The panels are also larger than competing solar panels with similar efficiencies, and so they generate more power per panel.

The German manufacturing plant will also help to cut costs, as it is completely automated which reduces human labour costs, plus the robots and other machinery can process solar cells more than twice as fast as conventional solar-panel factories.

However the current economic climate still will make it difficult for Nanosolar to compete, even with such cost-cutting improvements. TechnologyReview.com reports that the low costs Roscheisen cites are attainable only if the plants are operating close to capacity. And so far, actual production is very low. While the new solar-panel plant is designed to make 640 megawatts' worth of solar panels a year, its current output is only one megawatt a month. That's because Nanosolar's panels are not yet "bankable." That is, the technology hasn't been proven to the point that banks are willing to finance large projects that use the panels.

Nanosolar also have lots of competition. With China now capable of producing solar panels incredibly cheap, and with a fall in demand also driving down costs due to over-supply, the market is particularly tough. But Roscheisen insists Nanosolar can even make solar panels for less than First Solar, known for having the lowest manufacturing costs in the industry.

However, it remains to be seen whether Nanosolar can undercut their rivals in order to make their breakthrough profitable.

Like this article? Get the RSS feed: