In January, we presented an insight on the Solar Power industry. This month’s insight will focus on a specific panel used in the solar power industry – the thin film solar panel. Unlike traditional solar panels, thin film solar panels use little (if any) silicon to convert sunlight into electricity. While traditional silicon solar panels are bulky and produced in batches, thin film solar panels roll off the production line similar to an offset printing press and are light, flexible and inexpensive to produce. Though we have seen thin film applications in things like solar powered calculators for decades, technology has only recently expanded to substitute traditional solar panels.
Traditional silicon panels are much more efficient in absorbing light energy than non-silicon thin cell films. However, recent innovative technological advances have begun to lessen the gap as research and development funding has increased dramatically in recent years. Even though thin film solar panels still produce roughly 30% to 50% less power than the traditional solar panels, their relative low cost, easy integration into existing structure and sleek and aesthetically pleasing design offer some key advantages. Additionally, thin film technology provides better performance in diffuse light such as shady areas, minimizing the need to remove trees and other objects.
Major players in the industry have been able to reduce manufacturing costs by roughly 33%. These savings have spurred an increase in production and made the end product more economically viable compared to traditional solar panels.
Manufacturers are continuing to compete both in efficiency and in the development of new, innovative products. This has resulted in an increase in pressure to have thin film solar panels ready for market use quickly. A recent example of the driving innovation integrated thin film solar panels with roofing tiles for residential use.
Thin film panels sell for as much as 40% less than traditional silicon based panels. Competition between the two types surged recently as silicon prices declined resulting in lower raw material costs coupled with an oversupply of traditional panels has minimized the pricing advantage temporarily. In the long-term, thin film panels will become increasingly less expensive to manufacture and the price advantage should return with the stabilizing of the economy overall.
Various programs, including the economic stimulus plan, are providing additional funding and incentives in support of renewable energy sources. Combined with available tax credits to individuals, demand for thin cell solar panels will continue to see growth.
Currently, thin film solar panels have a 10% to 15% share of the solar panel market. Reductions in manufacturing costs, additional reductions in end-product costs and continued improvements in efficiency are critical to increasing the market share. Industry experts believe that by 2015 this industry’s share of the market will jump by as much as 40%.
As demand for alternative energy sources continues to grow and evolve, corporations and lenders will rely on professionals with the expertise necessary to properly value this rapidly changing industry. AccuVal has a global reputation for thorough research and supportable market assessments. Read more about how AccuVal determined the value of other emerging, fast changing energy segments.