China thin film industry needs industrial lift

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Several recent investments have been made in China's thin film. U.S.-based Argus invested $60 million in Henan Province to build a 30-megawatt production line. Hong Kong-based Xinao Group plans to invest $200 million to build a 500 MW production line in Fujian Province.

Dupont and Sharp have also made investments in China's thin-film industry. Today's production lines, mostly based on amorphous silicon, had an 8.8 percent share of the total solar-cell market in 2008, according to Digitimes.

For the non-silicon based thin film, CdTe and CIGS are the most common material types. These materials are easier to obtain and the cost is relatively low. Those two materials own 5.3 percent of the total solar-cell market in 2008, said Digitimes.

One problem for non-silicon based thin-film cells is the equipment typically has to be customized for each producer. That's because producers don't use uniform proportions of these elements in manufacturing. And that means it is often difficult to scale the production to reduce cost.

Compared with silicon and polysilicon PV solar cells, one of the advantages of thin-film cells is that they have a shorter energy payback time. For silicon PV solar cells, the payback time is usually one-and-a-half years, while for thin film it can be nine months.

While there is ongoing debate about PV solar cells on how ‘clean’ the whole supply-and-production chain really is, thin film is more accepted as a clean-energy resource.

China is an active member in the worldwide development of thin-film solar technology. Suntech Power, one of China’s bigger solar module manufacturers and a leader in silicon thin-film manufacturing, has put its efforts into successful commercial production.

At this week’s Changzhou Solar PV Trade Exhibition in Zhejiang province, investors were keen to meet with these companies and learn what innovations they are creating. However, a common question heard throughout the event was: How quickly will China’s domestic market develop?

There are currently no government subsidies or supporting policy for a domestic thin-film market, according to Rory Macpherson, director of investor relations at Suntech. Most of the company's products are shipped to global markets, especially Europe. Polar PV, JNSolar and QS Solar are also active in commercializing thin-film products.

For non-silicon based thin film, Nankai University, Sichuan University and several other research institutes are making progress in research and development. Professor Ao Jianping from Photo-electronic Film Device Technology Research Institute of Nankai University announced that in their lab, the efficiency of CIGS solar cell could reach over 5 percent.

Shanghai Jiaotong University is pointing its direction into nanocrystalline silicon thin film research, according to Professor Meng Fanying of the Solar Energy Research Institute. These are just a few of the dozens of China-based solar researchers and entrepreneurs actively developing thin film and seeking venture investment for commercialization efforts.

The most urgent challenge for China’s thin-film market is reducing production cost and increasing scale, said Charles Gay, vice president of Applied Materials. Applied Materials is one of biggest equipment suppliers for amorphous silicon thin-film industry.

Thin film factory equipment for amorphous silicon, for example, can cost roughly 20 percent of the final product. With improved government policy support for the thin-film industry, there's opportunity to drive scale and lower pricing required for broader adoption in industrial and commercial markets.

Investors at the Changzhou remain wary and will continue to look at the potential to scale product in this burgeoning domestic market. It will take R&D investments over the next few years to help drive down pricing and thus help the overall thin film industry.

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