XsunX reboots, claims 75% cost savings with new CIGS solar push

Aliso Viejo, Calif.-based XsunX (OTC:XSNX) is scrapping plans to build a $40 million amorphous silicon thin-film solar module manufacturing facility. But its new plan comes at one-fourth the cost, the company’s CEO Tom Djokovich told the Cleantech Group.

The company is repositioning itself, with a new business model that could even bring the company back to its roots in the building-integrated photovoltaic (BIPV) market. The company reorganized in late 2003 as a developer of semi-transparent cells for use in windows.

“While semi-transparent solar cells turning vast areas of commercial high rise glass facades into power producing structures sounds like a panacea for improving energy efficiencies, the bottom line is always costs,” he said. “As you make a solar cell more transparent, you reduce the amount of light it captures and converts into power. Four percent conversion efficiency was about the limit, while the costs to produce and integrate into a building façade remained high relative to the solar cell efficiencies.”

The company came to realize that the solution for the performance-to-price ratio was most likely going to be overcome through improved solar manufacturing and solar module packaging techniques.

It went on to develop amorphous thin-film solar products that could be incorporated into buildings. XsunX was focused on its solar module design that utilized two separate (tandem) solar cell layers of amorphous silicon deposited on to a glass substrate.

“We were in an environment where if you build it, they would buy it,” he said, adding that eventually, that environment became flooded with low-value, low-efficiency competitors.

XsunX had intentions of building its multi-megawatt module manufacturing facility in Oregon, designed in 2007 (see XsunX announces U.S. manufacturing facility). The company also secured a $21 million equity line, and in 2008 tried to execute and build the facility, tapping into about $8.5 million of the equity line.

“We just worked with the headwind the whole year,” Djokovich said.

By the fourth quarter of 2008, it became extremely challenging to secure the additional funding that was needed for the facility’s construction (see Record 2008 for cleantech with $8.4B in investments and Cleantech investment drops but stimulus funds soar in 1Q09).

Around the same time, Djokovich said the company’s board of directors and scientific advisory panel was exploring a different cross-industry manufacturing approach that would take them in another direction.

The company is now developing thin-film copper indium gallium (di)selenide (CIGS) technology that could utilize the excess manufacturing capacity of the hard disk drive industry to mass produce high-efficiency, low-cost solar cells.

The hard disk drive industry uses deposition techniques similar to those of the solar industry, where a process called sputtering is implemented on magnetic surfaces. Sputter deposition is a method of depositing thin film by ejecting material from a source, depositing it onto a substrate.

Scientists at the National Renewable Energy Laboratory in Golden, Colo., have been able to achieve more than 17 percent efficiency of CIGS cells on flexible, metal substrates.

However, current production techniques for CIGS cells don’t leverage stationary, small area, high-rate production technologies, which allow for the precise control of thin-film properties. Development and production of CIGS, and many other thin films, have focused on the use of large area substrates or continuous moving roll-to-roll deposition methods, which result in lower efficiences, according to XsunX.

Djokovich his company’s plan is to take the concept that has been working in the lab and adapt it to hard disk drive machines. XsunX is focused on small area depositions, with the intent of leveraging the throughput of the hard disk drive and creating commercial scalability.

“We think we can produce CIGS-based solar cells at $0.50 on the dollar compared to silicon solar cells,” he said, adding that at the 100-MW level, the company thinks it will be able to produce solar modules for $0.80 per watt at 12 percent efficiency.

“CIGS wafers offer a tremendous opportunity to replace silicon,” he said.

A number of companies gained traction with technologies that eliminated the need for expensive silicon. However, the price of silicon has plunged, with a Morgan Stanley report projecting polysilicon prices to continue to decrease 60 percent to reach $50 per kilogram, with wafers falling 35 percent to $0.85 and modules 30 percent to $1.85 (see LDK stock spikes despite dismal Morgan Stanley solar report).

Djokovich said the company has spent recent months validating the concept, and in July launched with an undisclosed U.S.-based partner to develop the baseline process and make initial samples. From there, XsunX wants to take those results and build a small pilot facility to produce the CIGS cells, in the next five years.

The company's total operating cost, including research and development and the pilot system, is expected to be about one-fourth of the budget it had for the $40 million amorphous manufacturing facility, he said. Shareholders have responded well to the business model change.

“It makes sense. It’s going to require substantially less capital, and [the shareholders] like the concept of substantial differentiation,” he said.

He said they don’t have all of the funding in place, but are working with interested investment groups and have been getting term sheets. Djokovich couldn’t disclose revenue projections associated with the plan.

Djokovich also said he wasn’t aware of other companies pursuing the same concept as XsunX, but said scientific staff at companies such as Miasolé have hard disk drive backgrounds. Miasolé, however, is pursuing large area processing with its thin-film CIGS products (see Another $35M for Miasole).

“Most companies decide the only way to scale is commercially is through size and that has ultimately been a limited factor for them,” Djokovich said.

XsunX is setting its initial energy efficiency targets low, trying to mass produce solar cells at 11 percent, and then in the next two years would expand to 13 percent, followed by 15 percent in the long term.

Following the pilot line, Djokovich said his company would grow through creating joint venture and licensing relationships. As an example, he pointed to Bosch’s unsolicited bid this week for aleo solar and Bosch acquiring a controlling stake in Johanna Solar Technology (see Aleo solar's shares soar as Bosch makes €46M bid and Investors get messy with bugs, worms and nuclear fusion).

XsunX thinks its technology could be applicable in a variety of sectors, including the hard disk drive industry, the BIPV market, and even on the consumer level through areas such as handheld electronics.