By Cynthia Challener
A combination of manufacturing issues and the global economic downturn significantly impacted the sector. Recent capacity expansions, a dramatic increase in the number of market players and growing investment activity are signaling renewed interest, though. NanoMarkets, a provider of market research and analysis of the opportunities in advanced materials and emerging energy and electronics markets, expects revenues from CIGS consumed in PV applications to grow from US$613.4 million in 2011 to US$5.41 billion in 2018.
The CIGS Advantage
NanoMarkets believes that CIGS has a huge market advantage over other Thin-Film Photovoltaic (TFPV) technologies. Not only can it be used to create lightweight, flexible, thinner modules than other TFPV options, commercial CIGS modules are over 13% efficient, with some firms reporting best cells with 14-16% efficiency. In fact, NanoMarkets expects that CIGS will be the only TFPV technology that might be able to compete with conventional c-Si PV technology where c-Si is already established.
Along with its high-performance capability, the flexibility of CIGS modules continues to be a critical advantage. With this technology, flexible substrates for flexible devices with twice the efficiency of existing flexible products can be created. Less expensive processes, cheaper substrates and the need to use much less material for CIGS PV compared to c-Si leads NanoMarkets to predict that CIGS will someday achieve price parity with c-Si PV, which will open up new markets that other types of TPFV have not had access to.
Three Key Markets
NanoMarkets has identified three markets that will provide opportunities for growth in the CIGS PV sector: The conventional panel market, the Building Integrated Photovoltaics (BIPV) market and the mobile power market for portable electronics.
The Conventional Panel Market
The first target for CIGS will be the conventional panel market, which is becoming commoditized and thus very competitive from a price/performance perspective. NanoMarkets expects that costs will fall below US$1/watt by 2014. The manufacturing concerns about CIGS do raise some question as to whether or not this technology can compete effectively. If CIGS efficiencies reach 15% by 2014 as expected, however, CIGS could potentially be sold at a price point closer to that of c-Si PV than other TFPV technologies.
And for applications where glass encapsulation is not possible, if CIGS suppliers can prove that CIGS encapsulation technologies provide competitive lifetimes, they should be able to compete on efficiency and cost in the c-Si PV panel market.
Finally, while CIGS PV can be used in residential installations and utility-scale projects, NanoMarkets believes that CIGS PV panel manufacturers should target conventional panel opportunities where weight is an important concern, such as rooftop installations.
Rigid and Flexible BIPV
CIGS PV is well suited for the BIPV market. The flexibility of CIGS panels is a real advantage that cannot be matched by c-Si, and therefore, the largest percentage of CIGS PV sales will be to the flexible BIPV market. However, NanoMarkets believes that CIGS is also suitable for rigid tiles and BIPV glass due to its lighter weight, capability for direct deposition onto glass or metal, and higher power than thin-film silicon. And while CIGS¡¯ sensitivity to moisture is a concern and current encapsulation solutions are typically high cost, BIPVs are generally higher cost materials and thus can often absorb the additional expenses.
Rigid BIPV is a natural fit for CIGS for several reasons:
-The uniform appearance of CIGS gives better aesthetics,
-CIGS provides continuous production of power under indirect or steep angled illuminations with less of a power drop than c-Si, and
-CIGS offers high efficiency.
NanoMarkets believes that the lighter weight and greater efficiency of CIGS combined with its potentially lower cost and aesthetic advantages could give it a real edge. CIGS panels also come in a wide range of sizes, can be uniformly black, grey or other colors or have visible patterned dark or silver lines, and can be custom designed to fit the tile products they go with, making them ideally suited to BIPV.
BIPV glass applications will also benefit from the aesthetic advantages of CIGS PV. And because CIGS PV is usually built on glass anyway, producing BIPV CIGS products requires only switching to architectural glass. In fact, NanoMarkets believes that the natural fit of CIGS PV in this market results in improved aesthetics, greater integration of PV into the final BIPV product, and a greater ability to hide the PV costs in the overall cost of the building materials, all of which add up to better opportunities for increased margins.
Flexible BIPV panels are laid onto a roof or attached to roofing materials prior to installation. NanoMarkets believes they are an important opportunity for flexible CIGS PV manufactures. Laminates or overlays can also be installed onto any surface to which they can be glued¦¡walls, doors, fences, etc., and direct marketing to end-users of these types of installations is another opportunity for CIGS PV suppliers.
More advanced BIPV products, where the PV cells are well integrated into the building materials so that the cost of the PV cannot be separated from the cost of the building materials, offer a more lucrative market. In this case, it is easier for the building owner to recoup the cost of installing BIPV through lower utility bills.
One example of such a product is Dow Chemical¡¯s POWERHOUSE shingle using CIGS PV cells manufactured by Global Solar and targeted for launch in 2011. NanoMarkets expects this product to be highly profitable. This strategy provides an opportunity for CIGS suppliers to become directly involved in fully-integrated products with mass market appeal. And because the cost of PV appears to be lower, it is more attractive for the end-user. With its higher efficiency, CIGS PV is ideal for this application.
Most portable electronics that contain portable PV devices rely on Dye-Sensitized Cell (DSC) or Organic PV (OPV) technologies, but CIGS is suitable for this market and can provide the highest power PV systems. Most uses are in solar battery chargers. The market is much smaller than the BIPV and conventional solar panel sectors, but the margins are likely to be quite large. CIGS suppliers could develop their own line of stylish products to encourage adoption or partner with high-end consumer products companies, a strategy adopted by leading producer Global Solar.
Other possible applications for CIGS PV include PV-active clothing, umbrellas, tents, bags, etc.
Currently the conventional panel market accounts for 98% of sales, but that will drop to 66% in 2018, with BIPV picking up the majority of the difference. BIPV currently represents a very small market for CIGS PV, but will have the largest revenues by 2018, growing nearly 175%. This growth will be largely driven by flexible BIPV products, but there will also be significant increases in demand for CIGS in rigid BIPV and BIPV glass. Revenues from sales of CIGS PV into other flexible product applications will also increase dramatically (~46 times) from a very small base.
A major drawback of CIGS PV compared to crystalline silicone is its moisture sensitivity. Conventional panels and other rigid products don¡¯t have this problem. As a result, flexible encapsulation is a major component of flexible CIGS development.
The most robust approach today involves the use of dyadic systems, which are comprised of alternating layers of two different materials, usually polymers and ceramics. But this approach requires many layers to be really effective, and that adds cost. Furthermore, the deposition and curing conditions can potentially hurt the cells.
As a result, there is pent up demand for less costly and simpler technologies. Recent developments are in part helping drive the growing interest in CIGS. Major chemical companies including Dow Chemical, Fujifilm, 3M (working with SoloPower) and DuPont (working with the US Department of Energy) have all announced progress in encapsulant technologies for CIGS PV.
NanoMarkets believes that, ultimately, the opportunities for encapsulation will depend on the PV application. For portable products with a minimum expected lifespan, low cost encapsulation that provides a minimum level of performance will likely be satisfactory. For flexible BIPV that is expected to last for decades, very robust encapsulation will be necessary. It is in these applications that the recent developments mentioned above will enable CIGS to achieve its true market potential.
The Question of Indium Supply
CIGS producers face uncertainty in indium supply and pricing. The display industry is the largest consumer of indium in the form of Indium Tin Oxide (ITO) for transparent conductors, and demand is predicted to increase as this market continues to expand. Furthermore, indium prices have risen recently and are expected to continue to climb over the next several years.
Much of the pricing issue has arisen as the result of actions taken by the Chinese government to limit exports. There are active indium sources in North America and Australia with stockpiles of concentrates, and they now have incentive to sell this inventory. It is uncertain how quickly such activities would impact the market, however. Historically the industry has been slow to respond to supply/demand swings.
CIGS producers are still faced with the challenge of producing high efficiency cells on a commercial scale. Performance depends on quality, so when developing production methods, the difficulty and cost of creating CIGS films must be balanced with quality and performance.
Conventional vacuum deposition methods including sputtering and evaporation are well understood, available and have lead to the highest performing cells. Over 90% of the CIGS PV produced today is vacuum deposited.
Quality is an issue when these processes are scaled up, however. Metal waste is also seen as a real issue for both sputtering and evaporation. And currently debate continues regarding whether to scale up batch processes or use continuous methods to achieve faster processing and larger substrates. To date, the largest growth has been in rigid, batch processing, most likely because it is widely understood and been demonstrated to achieve volume production in the tens of megawatts.
NanoMarkets predicts, however, that a gradual shift will take place from these classical methods to alternatives such as electrodeposition, Roll-to-Roll (R2R) and printing.
Electrodepostion utilizes simple precursors and relatively low cost equipment, and margins are not significantly affected if the plant is run at lower than capacity. The technique is also more efficient than conventional methods in terms of energy consumption and waste generation. For these reasons, NanoMarkets believes that electrodeposition of CIGS may offer a strong entry point for a number of firms. Odersun is the currently the clear leader with the largest commercial production capacity. Others using electrodeposition include SoloPower (commercial), NEXCIS and CIS Solartechnik (pilot plant) and CIS Solar (research).
Continues R2R processes are expected to be more scalable than batch processes and are ideally suited for flexible substrates. Approximately one-third of CIGS suppliers have or are developing R2R processes. Global Solar, Oderson and MiaSole have all demonstrated high volume production at tens of megawatts. This process also seems well suited for smaller producers and could offer licensing opportunities to major players. Global Solar appears to be pursuing this opportunity with Istar Solar and Shurjo Energy.
While rigid manufacturing presently dominates and will continue to do so, NanoMarkets expects roll-to-roll manufacturing to account for as much as 35% of the market by 2018.
Printing was initially thought to be the solution for commercial-scale CIGS manufacturing, but now appears to have issues of its own, and NanoMarkets expects that printed CIGS will remain a relatively small part of the CIGS market for at least the next eight years.
The Competitive Landscape
About 50 companies are presently vying for a piece of the CIGS market compared to 20 in 2009. Many of the newer firms are in Asia, and NanoMarkets believes that there is a special fit between CIGS and China in particular, due to the situation with indium and the growing demand from an increasing middle class for demand higher value products such as those containing CIGS PV.
But NanoMarkets does not believe that the market can support 50 suppliers. About six leaders will emerge by 2012/2013, each producing over 10 megawatts and a few of those will ramp up to truly high volumes. An additional dozen or so will produce tens of megawatts.
New key players include Daiyang Metal and Stion/TSMC. Solar Frontier (backed by Shell) is constructing a 900 MW factory that is expected to be fully operational in 2011. MiaSole has raised US$100 million in new money and is expanding capacity.
There is considerable evidence to suggest that CIGS makers have been correct to make such investments. Applications for which CIGS is being targeted over the next several years already are being pursued by firms using other TFPV technologies and should be relatively easy for CIGS firms to capture due to its higher efficiency.
CIGS PV may also enable new applications where the size or low power output of other TFPV technologies limits their viability.
Most notably, growth of CIGS will be substantial if only the announced planned capacity is actually installed and operated at modest levels. And with silicon supply problems over, c-Si PV is growing rapidly again and TFPV technologies will have a hard time competing because of their lower efficiencies--except CIGS.
Cynthia Challener is a contributing editor for NanoMarkets (www.nanomarkets.net) and also contributes to publications such as Chemistry & Industry, ICIS Chemical Business, JCT CoatingsTech, PPCJ and Speciality Chemicals magazines. Cynthia received her B.S. in Chemistry from Stanford University and her Ph.D. in Organic Chemistry from the University of Chicago. She worked as Principal Research Chemist at ARCO Chemical Company and Technical Services Director for flavor and fragrance producer, Bedoukian Research prior to starting her own business.
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