[tt] IEEE Spectrum: First Solar: Quest for the $1 Watt

[Brian Atkins]

http://spectrum.ieee.org/print/6464

It’s easy to make a small pile of money off  photovoltaic cells but very hard to 
make a big one. The reason is one of the most fundamental in free-market 
economics: the larger the market you aim for, the more competitors you’ll have 
to face.

If you just want to power a billion-dollar space probe, almost any price per 
watt is acceptable. If you are selling to lonely farmhouses, you just have to 
charge less than the cost of running a power line to the boondocks. 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.

Of course, it’s not enough that First Solar match the costs of fossil-fuel 
generation on the grid; it must also maintain its economic edge over other 
photo­voltaics. There are additional nascent technologies, including cells based 
on copper indium gallium ­diselenide (CIGS), silicon on glass, and the 
combination of ­germanium, gallium arsenide, and gallium ­indium phosphide. Even 
conventional silicon ­technology, which has dominated the market since its 
commercial launch in the 1950s, seems to have a lot of kick left in it. 
Currently, though, it’s suffering from its own success, as an insatiable demand 
for silicon cells has led to a scarcity of raw material. However, if the silicon 
shortage disappears by the end of the decade, as expected, the sale price should 
drop substantially from recent levels, which have fluctuated between $3 and $4 
per watt.

Right now, First Solar depends mainly on a ­government-subsidized program in 
Germany, where it has contracts worth more than $6 billion through 2012. Other 
markets with the same type of subsidies (known as feed-in tariffs, which spread 
the cost of ­alternative energy among all customers) include France, ­Italy, 
Spain, South Korea, and Ontario, Canada. To fill these orders, the company is 
undergoing a massive expansion of its manufacturing facilities that should boost 
annual production capacity to just over 1 ­gigawatt by 2009. This capacity could 
supply one-sixth of that year’s ­estimated global solar-cell business, which is 
currently growing at 50 percent per year.

This rapid ramp-up is impressive for a ­company founded only in 1999, after it 
acquired its cadmium ­telluride (CdTe) technology from the purchase of Solar 
Cells Inc. (SCI). Cash for the launch came from the equity firm JWMA, whose 
president, Michael Ahearn, became First Solar’s CEO and is still running the 
company.

First Solar began by developing its manufacturing technology at its Perrysburg, 
Ohio, facility. Commercial operations started in January 2002 with a 
25-­megawatt base plant, which began high-volume production a couple of years 
later. Since then the company has replicated its manufacturing line at the Ohio 
site, built four more lines in Germany, and begun constructing a fourth plant in 
Malaysia, which will bring the total number of production lines in that country 
to 16. Ahearn ­recently told investors that the first Malaysian plant has just 
started to produce cells and that it should be ­operating at full capacity by 
the end of next year. Line capacity has risen also, to 45 MW.

  The cells are manufactured on 0.6-by-1.2-meter sheets of glass, which are 
cleaned and cut on an angle to produce the strong, defect-free edges required 
for processing. The glass has already been coated with a transparent tin oxide 
that provides electrical contact to the device. This starting platform is 
radically different from that for silicon cells, which are made from far smaller 
monocrystalline and polycrystalline wafers.

Next, the device layers are deposited onto the sheets. This is the stage at 
which First Solar’s secret surely applies, says John Hardy, an analyst at 
American Technology Research, in Greenwich, Conn. In his view, keeping this 
secret is one of the main reasons that First Solar refuses to talk to the media.

Nevertheless, it is still possible to uncover some of the details of First 
Solar’s growth process. Dieter Bonnet, a coinventor of the CdTe cell and the 
chairman of Solarpact, a research consortium in Germany, says that First Solar’s 
process is just a refined version of that used by its predecessor, SCI, which 
released a report about its manufacturing technology in 1993. Interestingly, 
this document was coauthored by James Nolan, a current director of First Solar, 
the person responsible for designing and building prototype equipment for the 
pilot manufacturing line.

The report from SCI describes an elemental vapor deposition process that takes 
place in four chambers. Glass is placed on rollers and fed into the first 
chamber, where it is heated to 600 °C. Then it is transferred into the second 
chamber, which is full of cadmium sulfide vapor, formed by heating solid CdS to 
700 °C. The vapor forms a submicrometer deposit on the glass as it moves through 
this cloud, after which a similar process in a third chamber adds a layer of 
micrometers-thick CdTe in about 40 seconds. Then a gust of nitrogen gas rapidly 
cools the panels to 300 °C in a fourth chamber, strengthening the material so 
that it can withstand hail and high winds.

The two layers—CdS and CdTe—are critical ­because they constitute the electronic 
junction that converts light into electricity. Most of the sunlight entering the 
glass passes through the thin CdS layer before being absorbed by the much 
thicker CdTe film. Here the light transfers energy to electrons in CdTe, freeing 
them from their normal bound state so that they can move through the material. 
To get them moving, however, you need an internal electric field.

In silicon cells, that field is created internally by constructing two adjacent 
layers with different ­electronic properties. One layer consists of silicon 
doped with small amounts of phosphorus, which has one more electron in its outer 
orbital than silicon does. When a phosphorus atom is inserted in place of a 
silicon atom, that extra electron is transferred to the crystal lattice. Because 
these electrons move about freely and carry a negative charge, this material is 
known as n-type silicon. P-type silicon, on the other hand, gets its 
corresponding positively charged particles from tiny amounts of boron, an 
element that has one less electron than silicon in its outer shell. In this case 
there are not enough electrons to form all the covalent bonds required, so the 
electrons move around to try to fill this deficiency, which is called a hole. 
Holes act like free, positively charged particles.

When p-type and n-type materials are placed ­together, they form a p-n junction. 
The electrons and holes attract one another, congregate by the interface, and 
leave the p-type and n-type regions with negative and positive charges, 
respectively, creating the ­required electric field.

CdTe beats silicon in this respect because it can form a p-n junction more 
simply. CdTe and CdS are made by bonding two elements with different numbers of 
electrons in their outer shells, and any ­deviation from an exact 50:50 balance 
between these ­elements produces doped material. In fact, a slight imbalance 
naturally occurs in both materials, and that makes it very easy to make p-type 
CdTe and n-type CdS. In ­silicon, the two halves of the junction require more 
steps to manufacture.

A further advantage results from the position of CdTe’s absorption edge. 
Calculations have shown that the ideal solar cell would start absorbing sunlight 
at a wavelength of 910 nanometers. CdTe is close to this sweet spot, with 
absorption kicking in at 850 nm, while silicon starts to absorb only at 1.1 
micrometers.

After forming the junction between CdTe and CdS in the four-chamber tool, First 
Solar heats the panels to improve the efficiency with which it converts light 
into electricity. Bonnet says that this process takes place in the presence of 
some form of chloride, ­because it boosts efficiency, although the mechanism is 
not yet understood. The benefits are significant, and lab ­results have shown 
that cell efficiencies more than double as a result, to better than 10 percent.

Once the heating is over, a laser patterns the CdTe sheet into an array of 
smaller, rectangular solar cells connected in series. By stringing together the 
right number of cells, this process tailors the panel’s output to produce 
70-volt modules, delivering a current that ranges from 0.97 to 1.08 amperes. 
Finally, First Solar deposits a metal contact onto the CdTe and adds a laminate, 
a rear glass cover sheet, and termination wires.

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.

At first glance you might think that conversion ­efficiency shouldn’t matter, so 
long as the price per watt is low enough. That argument applies only at the 
level of an individual module, however, not an entire ­installation. Because 
First Solar’s panels are less efficient than silicon designs, they need more 
space to soak up enough sunlight, and that raises the cost both for real estate 
and installation. The company is aiming to reduce the installation costs through 
its ­recent cash purchase of the U.S. firm Turner Renewable Energy, which 
designs and deploys commercial solar projects.

Total cost must also reflect the expected life of the modules. First Solar says 
its product will last 25 years, after which the materials will be returned to 
the company for recycling. Besides helping the environment, recycling would 
provide First Solar with material, ­albeit after a long wait.

Cadmium is plentiful as a by-product of mining, but some critics doubt the 
long-term global availability of tellurium. Company president Bruce Sohn 
dismisses this notion. In a conference call in May he said, “We are not seeing 
any supply issue for tellurium. We have a couple of sources, and we have locked 
down our long-term contracts for raw materials. That has helped us maintain the 
supply as well as the price.”

Although the modules would be great at providing solar electricity to homes, for 
the time being First ­Solar isn’t selling to the public. Ahearn has told 
investors that the company is having a hard enough time supplying the demand for 
solar farms—some 55 ­percent of its business—and commercial rooftop 
installations. Panels for solar farms can be ­mounted on low-cost trellis 
systems. Most rooftop installations are for business premises. Such deployments 
could be seen as hazardous, because in a fire the ­panels could give off 
­potentially fatal cadmium fumes. To fight these fears, First Solar cites an 
experiment done at Brookhaven ­National Laboratory, in Upton, N.Y., in which 
cells ­heated to 1100 °C lost just 0.04 percent of their ­cadmium, an 
­insignificant amount.

More serious is the threat posed by rival thin-film technologies, which together 
have been receiving very high levels of investment since the silicon shortage began.

Of the alternative technologies, CIGS has been grabbing most of the headlines, 
thanks to its claims for maximum efficiencies of up to 20 percent. Another 
advantage is the ease with which CIGS can be deposited as a thin film. This 
technology has yet to live up to its billing, however.

“It’s an awful lot of hype as opposed to a lot of ­reality,” says Robert 
Castellano, president of the ­Information Network, based in New Tripoli, Penn. 
“No one has come up with a full-blown production setup, and that has soured all 
the venture capital and private equity companies.”

He says that investors were lured by promises of simple, quick production 
processes for panels having an ­efficiency of 12 percent. In fact, though, 
efficiencies have been lower, and manufacturing has been delayed. Heliovolt 
Corp., in Austin, Texas, and Nanosolar, in San Jose, Calif., for example, have 
each raised over $100 ­million of investment but are only on the fringes of 
manufacture after more than five years of development.

Another thin-film technology, called amorphous silicon on glass, is already 
making an impact on the solar market. It has efficiencies of around 7 percent, 
and because it uses only tiny quantities of silicon, it has been largely 
unscathed by the silicon shortage. Also, because manufacturing equipment is more 
readily available than for CdTe technology, there is a lower barrier to entry 
for would-be ­manufacturers. “The customer can get everything from us,” says 
Juerg Steinmann, head of marketing communications at Oerlikon Solar, in 
Truebbach, Switzerland. Its services are proving to be popular, and customers 
are currently inquiring about production systems for the manufacture of 40 MW or 
60 MW per year. “Within a relatively short time we will have gigawatt 
factories,” says Steinmann.

Oerlikon’s tools produce 85-W solar panels covering 1.4 square meters, using a 
0.3-μm layer of amorphous silicon that strongly absorbs visible light. However, 
output can be increased by nearly half with the addition of a 1.5-μm 
microcrystalline layer of silicon that absorbs infrared radiation too. Late last 
year Oerlikon introduced modified process equipment for microcrystalline growth. 
Even with this additional growth step, manufacturing throughput is fast, and the 
Swiss company contends that a manufacturer wielding its tools could make a solar 
module about as quickly as First Solar can. Nevertheless, the all-important 
cost-per-watt ratio is ­slightly inferior. “Today we’re looking at $1.50 per 
watt, and by 2010 our goal is going to be $0.70 per watt,” says Steinmann.

The idea of using more than one material to capture a higher proportion of the 
sun’s radiation has also been pursued by Emcore Corp. This Albuquerque-based 
company uses layers of germanium, gallium arsenide, and gallium indium phosphide 
to manufacture cells that are roughly three times as efficient as First Solar’s. 
But the production costs are astronomical because the technique requires 
relatively slow growth rates and because deposition occurs on small germanium 
substrates. Even so, these drawbacks did not prevent Emcore from enjoying 
success in its initial target market, aerospace applications, in which high 
efficiency and reliability are paramount.

The high cell costs can be offset in terrestrial ­solar-cell systems that use 
large lenses or mirrors to focus sunlight by a factor of several hundred, 
boosting conversion efficiency to almost 40 percent. But this strategy makes 
sense in only 10 to 20 percent of the world market. “Where we play is in the 
very sunny, high-­solar-resource areas, where it’s also very warm,” says David 
Danzilio, the company’s vice president in charge of photo­voltaics. For that 
reason, sales of ­Emcore’s product are unlikely to take much of a bite out of 
sales of First Solar’s systems, which can be used in all climates.

All this means is that in the short term, First Solar’s main competition will 
continue to come from conventional silicon cells. This mature technology is 
­unlikely to deliver any major hike in efficiency from today’s figure of around 
16 percent, but if the silicon shortage disappears in a year or two, lower 
material costs will propel a major reduction in the cost-per-watt figure. 
“However, even if polysilicon came down in price significantly, First Solar 
could cut their ­prices and still see the same margins that the traditional 
module makers do,” says Hardy of American Technology Research. “It would 
definitely hurt them on pricing, but they would still be extremely profitable at 
lower prices.”

With no strong challenger in sight, First Solar is well placed to continue its 
quest for grid parity. Getting there would substantially reduce greenhouse-gas 
emissions. That achievement would be a great ­legacy and would make a really 
great story, but will First ­Solar be willing to tell it?
To Probe Further

Solar Cells Inc. describes the details of its elemental vapor process in its 
1993 report “Fabrication of Stable Large-Area Thin-Film CdTe Photovoltaic 
Modules,” which is available at 
http://www.osti.gov/bridge/product.biblio.jsp?osti_id=10181903.

Get information about inverted triple-junction technology in “High-Efficiency 
GaInP/GaAs/InGaAs Triple-Junction Solar Cells Grown Inverted With a Metamorphic 
Bottom Junction,” Applied Physics Letters, 91 023502, 2007.

For comparisons between CdTe and CIGS manufacturing, see Michael Powalla and 
Dieter Bonnet’s paper “Thin-Film Solar Cells Based on the Polycrystalline 
Compound Semiconductors CIS and CdTe” published in Advances in OptoElectronics, 
2007, available free of charge at 
http://www.hindawi.com/GetArticle.aspx?doi=10.1155/2007/97545.

-- 
Brian Atkins
Singularity Institute for Artificial Intelligence
http://www.singinst.org/