by Bob Mariner, VLSI Research
What makes the photovoltaic solar cell industry so interesting and exciting is that the potential for growth is enormous, but realizing this opportunity is not straightforward. This is a competition between technologies, both within the PV alternatives and also from non-PV options. The way forward is also clouded by the significant involvement of politics, vested interests, and environmental lobby groups, where the “facts” may not always be what they seem.
In the short term, there is little doubt that the silicon-based PV solar cell industry will see rapid growth. The momentum is there, driven by existing government subsidies and incentives in some countries to ensure that new solar cell fabs are built. The consensus is that cell production and the demand for production equipment will grow at a rate of 40%-50%/year for the next few years, and current industry plans appear to indicate that this is likely to happen.
However, real markets are driven by customer need and demand, so PV solar must be perceived as meeting these needs better than alternative power generation options. This means competing not only against the demonized coal, oil, and gas electricity generation, but also non-PV renewable options and nuclear power — and there are different PV technologies competing for the same slice of the pie as well. So the question is whether any PV technology can achieve leading cost/watt performance at the point of use, and do this without subsidies.
Current forecasts for the industry are somewhat unreliable. Firstly, there are no sound measurements of what has been achieved in the past in terms of production capacity and output. Secondly, they can be influenced by vested interests and enthusiasts. Forecasters like to use history to help establish boundaries for their projections. Forecasters also like to have measurement of the drivers that help determine what final consumption is likely to be. In the case of electricity generation, only a minute fraction of global consumption is current generation from renewable resources, and PV is just one sub-segment of that. To forecast within these almost unlimited boundaries it is necessary to look at the practical constraints of the infrastructure to absorb the products and the potential customer’s willingness to do so.
At the end of the day, cost/watt is the primary determinant for success of the winning technology, but this is not as simple as it may sound. One of the weaknesses in the whole debate over renewable energy, including PV, is that of definitions. The important measure of performance will be the cumulative power generated over time from the specified generator, as installed, and in the location of the installation, for the total cost of that installation. This will determine the true cost effectiveness and hence demand. For PV solar, the conventional measurement used is the amount of power that can be generated (in the laboratory) from a specified area when illuminated by one standard sun. This measurement is fine for comparing the cost efficiency of different product solutions, but does not provide a definition of the real-world cost/watt. Geography has a far greater impact on the relative performance of the different renewable energy alternatives. Because of this there is unlikely to be any single winner in the race to replace our traditional non-renewable energy sources.
There is no question that the world needs to find viable alternatives to fossil fuels — it is not an issue of global warming (though these risks add greater urgency), but the simple fact that fossil fuel resources are by definition limited. For this reason the demand for renewable energy has to be enormous and PV solar is likely to be a significant provider. But there are many technology competitors and a lot of technology development is still underway, so the business risks are very high. Many of the companies involved in the PV solar cell industry, on the production and materials side, have emerged from the semiconductor industry. But PV is not the same as today’s IC industry — the fundamental principles of semiconductor physics are the same, but the technology and economic drivers are vastly different. It is perhaps more like the semiconductor industry of the early 1960’s, when there were many technological uncertainties and the future less predictable. And like the early days of the IC industry, PV solar promises to be an exciting industry to be a part of.