Signs of the Solar Shakeout within CIGS

Solar Frontier looks strong, while Nanosolar struggles.

One of the more high-profile Silicon Valley CIGS companies is Nanosolar─which has remained largely silent in the past year, after raising US$400 million prior to 2009. In early December 2011, VP Brian Stone gave a presentation on the company’s utility-scale panels─an application-specific product, not unlike the utility panels offered by First Solar and crystalline silicon (x-Si) incumbents like Trina Solar─which he cited at 11% efficiency, with a roadmap to 16% by 2015. He also highlighted a few pilot projects, and said that the company is planning for 8 MW to 10 MW of production in early 2012. Brian also shed some light on the company’s cost structure, citing US$0.65/W to US$0.70/W for materials today, decreasing to US$0.30/W to US$0.35/W─however, it is likely that nanoink costs remain a major bottleneck for the company. At 2.5 GW annual capacity, Nanosolar anticipates total module costs of US$0.40/W to US$0.45/W. Today, he cited total production costs between US$1.10/W and US$1.20/W. Lastly, Brian highlighted balance of systems savings in the company’s pilot projects, citing US$0.10/W to US$0.15/W savings by using Nanosolar panels.

Despite its ambitious roadmap to low production costs, Nanosolar’s lack of competitiveness today won’t allow it to reach its goals. Nanosolar is targeting utility-scale projects, but an 11% efficient panel won’t allow it to compete with Cadmium Telluride (CdTe) leader First Solar, which can also develop utility-scale projects internally. Even amorphous silicon (a-Si) can prove competitive against an 11% efficient CIGS panel, depending on location. On the other hand, CIGS is gaining traction in commercial rooftop applications, which are less space-constrained than residential rooftops.

In general, it’s clear that Nanosolar could very well be a victim of the solar shakeout soon without additional investment. The company is simply not keeping up with the leaders in the CIGS market, like Stion and Solibro─both of which are above 13% production efficiency--and capacity leader Solar Frontier. That competitive landscape, in addition to bolstered competition from x-Si and CdTe, place Nanosolar squarely on the outside looking in.

Solar Frontier is continuing to make giant strides and slowly penetrating new markets worldwide. The company recently announced that it is going to supply over 30 MW of panels for projects across India including for projects under the National Solar Mission. It also has made headway into rooftop-dominated French PV market working with BELECTRIC, a French EPC developer completing a 4.2 MW solar power plant in Bessan, France. In a recent conversation with Ikaros Solar, a leading European EPC firm, CEO Yves Devis mentioned that Solar Frontier CIGS modules exhibit lower Levelized Cost of Electricity (LCOE), better high-temperature performance and more appealing aesthetics than crystalline-silicon based modules for the residential rooftop segment. Recently, the company also signed a distribution agreement with Mainstream Energy to sell and install 5 MW of its modules, paving its entry into the U.S. solar market. While Solar Frontier is by far the most successful company in the CIGS/CIS industry, its continued commercial success will allow for better investor sentiment in an industry recently plagued by industry exits and few commercial successes─though additional IP acquisitions and bankruptcies loom in 2012.

Further Information: Lux Research (www.luxresearchinc.com)

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