Last week, the Chinese energy company Hanergy announced their purchase of Miasole, a thin-film solar company, based in the Silicon Valley. Although experts in the field are a bit skeptical about the faith of this technology considering the popularity of the conventional silicon panels, today’s market conditions indicate otherwise.
Looking at the trends of the past couple of year, it is clear that prices of silicon panels has fallen drastically, while thin-film manufacturing companies are bankrupting or being sold to Asian corporations at an extremely low price.
Market analysts, however, believe that these Asian buyers are on the right track. Reports show that demand will increase sooner or later, and building solar panels will resume. Building a new thin-film solar power factory is far cheaper and much easier to construct. To do a rough comparison, according to Professor Travis Bradford at Columbia University’s school of Development, if a thin-film plant costs between $350 and 450 million, a conventional silicone one with the same size and scale would cost around $1 billion.
Of course, the cost of construction would be determined by the availability of raw materials and suppliers’ prices. Currently, the companies that have the potential to provide cheap thin-film technology have built only relatively small factories due to the state of the market. Those who have gone for larger constructions have either failed due to the use of expensive technologies (as it is the case with Solydra), or use methods that prove to be more expensive than what newer types of thin-film manufacturing can offer (example with “First Solar”).
New companies cannot afford to wait for stabilization of the market, in order to begin the manufacturing process, but companies like Hanergy can. As Professor Bradford states, Haergy has invested around $30 million to finalize the deal and they would have to spend some few hundred million if they want to expand the size of the factories. However, if their strategic planning is successful, they have assets worth billions in their hands.
Unfortunately, the market conditions at this stage are not favorable. The demand for solar panels is much less than what manufacturers have in stock, which consequently brings down the prices and drives companies to sell at a loss.
To top this up, there is no indication of how long this could continue. While new thin-film factories are being built, the price of silicon solar panels continues to drop, with no guarantee that the thin-film panel producers would perform as anticipated.
Hanergy is betting on building their own solar power plants, as First Solar did. However, specialists think that thin-film panels cannot compete, because it has taken too long for the manufacturers to implement their technologies for large production at a competitive price. Jenny Chase, a manager of the Solar Insight Team of Bloomberg New Energy Finance suggests that the only hope such companies might have is if they explore market niches where flexible and lightweight panels are needed.