Solar materials: No Longer a “Bed of Roses”, but a “Rollercoaster Ride” by L. Shon-Roy, Techcet

Posted By techcetftp on December 9, 2011 at 7:59pm | Uncategorized

Material manufacturers around the world have been looking to profit from the rise of the solar industry, but the growth picture has been less than rosy for most suppliers.  However, suppliers persist to engage with and look for ways to benefit from this large and potentially huge market.  Given high sensitivity to cost, driven by the need to bring down the cost of solar technology, many material suppliers have been disenchanted by continued pricing pressure and low margins.  This layered with the issues surrounding the economic recession started in late 2008, makes this market look like a rollercoaster ride. Where are the sweet spots in the PV process materials?  And what’s their outlook?

Many of the problems and challenges that exist in supplying the solar industry stem from where most of the manufacturing is being done, i.e.,China.  Although ~80% of the solar cell demand comes from Europe, >55% of the production resides inChina. Chinais the land of growth and pricing pressure into which many non-Chinese suppliers have had trouble breaking.  When finally landing an opportunity, they find slim margins and difficulty in competing with Chinese suppliers that are either partially or wholly owned by the solar cell makers, or partially or wholly funded by the Chinese government.

Polysilicon is a key example, many Chinese solar fabs have close ties, often financially oriented, with in-country polysilicon makers, making it increasingly difficult for non-Chinese companies to compete and participate in the solar market.  There are many new manufacturers in Chinawilling to compete on the basis of price and are willing/able to handle lower margins.  This market factor in combination with the softening of solar cell demand has forced down polysilicon prices more than 30% over the course of the past year.  Polysilicon spot market prices are now ~ $50/kg and are anticipated to continue declining.   What was expected to be >25% growth in polysilicon revenues, is now looking like < 20 % for 2011.  Growth in the mid to low teens is expected for 2012 (see Figure).

An example of rosy promises unrealized are the nitrogen tri-fluoride (NF₃), silane (SiH₄) and ammonia (NH₃) market segments.  These gases were at once considered high growth potentials and anticipated to outpace semiconductor process consumption as a result of the promising a-Si thin film solar market.  However, given the major slow down in a-Si production, exacerbated with Applied Materials closure of their SunFab business (July 2010), and Solyndra’s plant closure/bankruptcy (August 2011), the markets for NF₃, SiH₄ and NH₃ have been limited.  What was hoped to be 500mT of silane by 2011 is now approximately <200mT for both thin film and silicon wafer based solar cell production (<7% of electronic production consumption) [INSTEAD OF A FOOTNOTE, I JUST MADE THE INFO A BRACKETED NOTE.]  [electronic production includes semiconductor devices, thin film transistor (TFT) displays and solar cell devices]. NF₃ used in this market now totals <450 mT (<10% of electronic production consumption).  NH₃ consumption for the solar market represents ~900mT (~15% of electronic production).

Other opportunities in the PV process materials market that have been somewhat rosy but a bit difficult have been in the area of phosphor doping (i.e., phosphorous oxychloride, etc.) and wet chemicals (HNO₃, KOH, etc.).  The opportunity here is limited to suppliers who already have positions in this market and are satisfied with supplying locally.  Pricing pressure continues to beat down margins in both areas, making transportation costs a burden, with prices varying widely between Asia and theUS.  It is anticipated that as theUS market evolves, prices will eventually mirror those ofAsia.

Despite the repeating theme of pricing pressure, new opportunity still exists in the solar materials area, especially with regard to thin-film solar cells, namely CIGS/CIS (copper indium gallium and selenium/copper indium sulfide)  and CdTe (cadmium telluride).  A number of new materials relating to conductive pastes, as well as evaporated and sputtered metal alloys, now exist.  In particular, sputter targets composed of copper indium gallium and selenium have been in production over the past few years and now total 220,000 pounds for 2010; growing at a 5 year CAGR of 20%.  In the CdTe arena, molybdenum sputter targets now total approximately 380,000 pounds for 2010.

The PV market is certainly not for the faint of heart.  Opportunities for suppliers with existing positions in these materials are certainly worth bringing forth into this market.  Future opportunities will continue to exist especially in the PV thin film segment, supported by healthy growth in the CIGS/CIS as well as CdTe markets.