According to reports, Joseph Hudgins, Principal Solar Scientist, Climate Business Group of the IFC, put a positive spin on a difficult year for the PV industry. “Despite the tumultuous market and hard financial times, it is exciting to see the cost for an installed PV system at or below $2.50,” he explained. “This is near the tipping point which enables the market to pull the supply chain and provide competitive power to some of the global regions that need it the most.”
PV’s increasing competitiveness has had a significant impact on thin film technology, and the niche has been under intense pressure to reduce its costs throughout 2011. The falling price of silicon modules has squeezed thin film’s profit margins; a trend that can be observed acutely in an emerging market such as India . “With silicon modules selling for $1.00 to $1.25 with 15-16% efficiency, the lower LCOE is even putting pressure on First Solar likely to continue as the preferred choice [in India],” Hudgins noted. But within the challenge, opportunity still exists for thin film – for example, local content rules protect silicon PV manufacturers in the country, but thin film panels are exempt. This allows foreign thin film manufacturers to exploit the nascent market conditions if they can provide a competitive cost.
Hudgins is well placed to comment on the Indian market, having worked as the Vice President of Global Manufacturing at BP Solar. At Tata BP Solar in Bangalore, he saw both the need for clean power in both on and off grid applications, and the constraints on PV growth. “I have high regards for India and the wonderful people but I do not believe India will become a “manufacturing hub” or a new technology development global leader,” he said. “[At Tata BP Solar] we eventually produced the lowest cost solar cells in the world but we never had to compete with the scale, supply chain or the financial advantages that China enjoys today. I believe the India market will see more hybrid application and likely mature into 4 general sectors.”
Hudgins urged caution for the thin film industry when discussing investment. “It is very difficult to demonstrate commercial and economic viability of thin film manufacturing in the current market so investments will be difficult. Separately, project installations are site specific but often financially viable. There needs to be a “compelling reason” to invest in thin film PV versus other alternatives,” he explained. Among the elements that are factored into a potential investment, Hudgins identified the credibility of the management team, a clear timeline, and a “low financial risk from warranty claims that might also damage the corporate brand” as crucial.