January 18, 2009
Most Thin Film Photovoltaics Companies To Fail

A venture capitalist says most thin film photovoltaics (PV) advances fail in the transition from the lab to manufacturing due to yield problems and other manufacturing problems. (thanks James Bowery)

The reality, according to Neal Dikeman, partner with VC firm Jane Capital Partners, is that only one or two thin-film projects have brought product to market in 30 years, and it's a US $100M-$200M dollar up-front investment "just to play the game and see if your product really works."

Silicon Valley investors have mistakenly bet on "really great teams" while the technology is still at a science experiment stage, he argues investors are beginning to realize this, he thinks, and that the industry is sitting on the back end of about 5-10 years of US $100M bets. "We're going to see a bunch of write-offs coming up," he warns.

Dikeman argues that very few of the thin film PV start-ups have succeeded in getting a good thin film PV production process operating at large scale. So First Solar is really an outlier.

Dikeman expects the entrance of semiconductor equipment manufacturing suppliers such as Applied Materials and Oerlikon will help matters. If these companies can work out processes and equipment for doing thin films PV manufacturing then a lot more companies will be able to get into the business of thin film PV manufacturing.

Share |      Randall Parker, 2009 January 18 06:50 PM  Energy Solar


Comments
Engineer-Poet said at January 19, 2009 1:04 PM:

If thin films don't work, there's always Evergreen Solar's string-ribbon process using plain old silicon.

SuperSumoYakuza said at January 19, 2009 1:18 PM:

The assumptions and assertions of this article are not true. We have seen a number of thin film photovoltaic companies make it into manufacturing in the last three years. That is why they are getting tens of millions in VC. Because they have overcome this issue.

Low cost, thin film, solar panel printers are now chugging along on every continent. The successes that have been achieved are spawning even more successes in the field.

th said at January 19, 2009 4:01 PM:

Gee, venture capital drying up in chasing rabbits down black holes, what a surprise. Whats worse is under all the bluster from the teleprompter-elect for funding alternatives, I'd be willing to bet all the hope and change money is going towards less proven failures like GM and GE than this silly nonsense, all of obamas administration is clinton which is heavily weighted towards the bidding process, ie. big donors.

Joe said at January 19, 2009 4:14 PM:

Low cost, thin film, solar panel printers are now chugging along on every continent.

Manufacturing inefficient crap.

The reality is that most company--greater than 70%--fail within five years.

Transitioning from the lab to manufacturing is always a problem, if not THE problem. UCSD had holographic memory running in the lab in 1987. Light polymer car batteries have been proven in the lab.

averros said at January 19, 2009 10:38 PM:

VCs are the reason why so many companies fail - because they tend to have no clue whatsoever about technology and instead listen to the "great teams" composed of their MBA buddies. They do not care about building anything worth-while or innovative (which takes time) - their mantra is ROI - which does go down when time needed for R&D gets longer. Most entrepreneurs would be better off not taking any money from VCs; not until they have a product which works and sells - so they can swing a deal which allows them to stay in control of their own business.

David Govett said at January 20, 2009 12:01 AM:

Saudi Arabia can manipulate the price of energy to kill these start-up. Classic monopoly. John D. Rockefeller would understand.

Wolf-Dog said at January 20, 2009 1:47 PM:

Saudi Arabia can manipulate the price of energy to kill these start-up. Classic monopoly. John D. Rockefeller would understand..

What you said is already happening. If the price of oil drops and stays low for too long, then most of the electric car and battery research companies will go bankrupt. This is what the OPEC wants. They did this before, and they are repeating it again. But if Obama is smart, then he can start a national policy of imposing a gasoline tax like in Europe, and this would save the electric battery and alternative energy research companies.

Engineer-Poet said at January 20, 2009 1:57 PM:
Saudi Arabia can manipulate the price of energy to kill these start-up.
You think so?  Where was KSA's ability to keep oil prices down last summer and keep the world economy chugging and SUV sales humming along?

US sales of light trucks are back over 50%, but of a much-reduced total.  This is hurting KSA already, and will hurt them more over time—the surviving world oil consumers are now starting a race to get away from the black stuff before the price spikes again and does them in.  KSA didn't want this, but they've passed their geological production peak and could do nothing to meet demand at a price that would have forestalled the credit collapse.

It's a race between geology and technology from here on out.

th said at January 20, 2009 7:44 PM:

The world is oversupplied with oil now with just a 2% drop in demand, sounds like the end of oil demand but not production. When demand goes from 60 mmbbls/d to over 80 in just 10 years don't you expect some sort of imbalance, and a correction and then a moderation and then stability. If we get price stability at say 75 mmbbls/d at $70 for 10 years, your peak carping is off the table again as it was from james schlesinger back in the seventies.

Michael B. said at January 21, 2009 9:47 AM:

Wolf-Dog, the ability of OPEC and Saudi Arabia to manipulate oil prices is long gone. They used to have that ability and used it. Then, as demand increased relative to supply, they slowly ceded that ability in order to keep inflation of energy prices in check. Oil has a very inelastic demand, but only in the short-run. In the long-run, oil demand is elastic. OPEC is scared of high oil prices like last summer because it causes investment in alternatives. Most of the recent downward pressure on prices is from a drop in demand, especially from the developing world. At current prices, every (or at least almost all of them) OPEC countries are no longer capable of running a balanced budget and with the world currently in the painful process of deleveraging, debt is more expensive. Also, many of the OPEC countries like Venezuela, are facing potential instability as they are racking up massive debts. Also, there has not been a substantial drop in economic investment in oil because drilling for oil is no longer profitable in most instances and the oil companies are deleveraging, too. This means that there will be less supply, relative to demand after the global economy recovers. This means that oil prices will skyrocket to frightening highs. The level of investment and research into alternatives to oil will never have been higher. To help prevent this, OPEC countries have been cutting production ever since oil went below $100 a barrel. In spite of the cuts, prices kept falling. Eventually though, prices seemed to have stabilized and even gone up a little as OPEC continues to cut production. In other words, Saudi Arabia and OPEC are not keeping prices low. They are actually keeping prices up.

Michael B. said at January 21, 2009 10:03 AM:

Actually, the drop in oil price is mostly a side effect of deleveraging, not demand. About a gasoline tax...

If all the oil importing countries imposed a 100% tax on oil so that no matter what the price of oil was it would cost twice as much as the market equilibrium price, then there would be a huge transfer of rents from oil exporters to oil importers. It would also raise oil prices for end consumers and business, promoting investment and usage of alternatives. The only problem with this is that it's economically inefficient. There would be less investment in finding more reserves and what not.

Shiva said at January 21, 2009 8:00 PM:

Choice of Sun/Oil, depends of human acceptence and thus depends on it the survival the solar companies(Crystalline/Thin Film) and the world at large. For a better tomorrow we should join hands and educate people to go GREEN irrespective of Solar companies/Oil producing nation/VC firm.

kurt9 said at January 23, 2009 12:29 PM:

Having investigated several solar thin-film technologies last year, I can tell you that this article is spot-on. All of the potential thin-film technologies have major hurtles to over come. Worse, some of the technical hurtles are not even being worked on at this time, suggesting that many of these fancy "teams" working in this field are overly dreamy and not realistic.

The thin-film technologies are:

1) CIGS
2) Cd-Te
3) conductive polymers
4) Dye-sensitized TiO2

CIGS, which is the most popular right now, uses Indium as raw material. The problem with Indium is that its supply is limited (Indium is a by-product of Zinc refining) and much of that supply goes into the transparent electrodes used in panel displays and TVs. Gallium is also limited in supply.

Cd-Te are toxic, thus resulting in a toxic waste disposal issue at the end of the solar cell lifetime.

The conductive polymers have low conversion efficiency and lifetime. The lifetime issue is particularly relevant as none of the major players are even working on this issue (they are looking for "strategic" partners to do this for them). This is also a problem with the dye-sensitized TiO2 technology.

One technical hurtle that must be overcome for ANY thin-film solar cell technology to be commercially viable is that a replacement material for ITO must be developed for use as the conductive electrode. I can tell you that as of August of '08, noone (and I mean No one) is working to develop this material.

Resolution of these various technical hurtles will take a good 5-7 years. Then there is the scale-up production issues.

I think PV is a real dog right now and I certainly would not invest in it if I had the money.

john.optimum said at February 5, 2009 4:39 AM:

Solar Energy is not going to replace the demand for oil. It is a top up energy source and so are wind turbines. So far as overcoming the manufacturing hurdles, dont underestimate the capability of the scientists working on the issues. So far as scale up is concerned, there are many companies already in construction. There might be MBA's trying to run the companies, but the brains behind the scenes, are brilliant.

I agree that some of the Solar companies will either dissappear or be absorbed. Don't get too excited about cheap energy at the moment. After the recession, get ready for record oil prices. It might be 4 or 5 years before the oil reaches $150/ barrell again but it will and eventually it will be much higher

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