Will Thin Films win in India?

Madhavan Nampoothiri

December 13, 2011Mumbai

Agenda

1. Introduction

2. How is Thin Film Technology doing in India ?

3. What is driving the growth?

4. What is the future outlook for Thin Films?

5. Conclusion

1. Introduction

2. How is Thin Film Technology doing in India ?

3. What is driving the growth?

4. What is the future outlook for Thin Films?

5. Conclusion

Agenda

Thin Films – From Niche to Mainstream

2005 2006 2007 2008 2009 20100%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$70 $100 $250 $450 $70 $50 $35

6%

8%

10%

13%

18%

13%

Global Thin Film market share

Average Polysilicon spot price $/kg Thin Films % Share

Souce : Analysis based on GTM Research, iSuppli, Photon International and other sources

-Thin film market share increased when polysilicon prices went up, and vice versa.

- The decreasing price differential with c-Si is reducing cost competitiveness of TF

PV production – c-Si dominates

Source: GTM Research

-c-Si has large market share- In thin films, CdTe is the leader-a-Si not far behind- CIGS is makings its presence felt

-China has significant Thin Film capacity-Europe leads in Emerging technologies- a-Si leads in production capacity

North Amer-ica

Europe China/Taiwan Japan ROW0

500

1000

1500

2000

2500

3000

Thin Film capacity in 2012(MW)

CdTe CIGS a-Si Emerging

Standard Crys-talline Si;

19767.5; 83%

Super Monocrys-talline Si; 919.5;

4%

CdTe; 1437.5; 6%

CIS/CIGS; 425.5; 2% Thin film Si; 1338.5; 6%

2010 Cell production by Technology(MW-dc)

Agenda

1. Introduction

2. How is Thin Film Technology doing in India ?

3. What is driving the growth?

4. What is the future outlook for Thin Films?

5. Conclusion

C-Si dominates in production….

• JNNSM target – 4 to 5 GW of PV production capacity by 2022• Local content requirement in JNNSM(Phase 1)– C-Si : and Modules to be made-in-India– Thin films: No import restrictions

• No local content mandates in state policies

• C-Si Module manufacturing capacity ~ 1500 MW• C-Si Cell manufacturing capacity ~ 600 MW• Thin film manufacturing capacity – Negligible– Moser Baer, Shurjo Energy and HHV Solar

....but, Thin Film dominates in installations

Gujarat State policy- 60-70% thin films

-India bucks the global trend- Thin films grabbed more than 60% market share

Total IREDA NVVN

0

20

40

60

80

100

120

Technology selection under JNNSM

C-Si Thin Films

Type of scheme

Inst

alla

tions

in M

S

India – a good export market for global TF companies

a-Si/μc-Si   CIGS   CdTe

               

Dupont USA   MiaSolé USA   First Solar USA

ECD/Uni-solar USA   Q-Cells(Solibro) Germany   Abound Solar USA

Masdar PV Germany   SolarFrontier Japan      

NexPower China            

Schott Solar Germany            

Sharp Japan            

T-Solar Spain            

-CdTe very popular, First Solar has high market share- a-Si, despite lower efficiencies, have seen lot of companies coming-CIGS also has takers

Note: The above is a partial list of TF companies in India

Agenda

1. Introduction

2. How is Thin Film Technology doing in India ?

3. What is driving the growth?

4. What is the future outlook for Thin Films?

5. Conclusion

Growth Drivers

Technology-Temperature

coefficient-Spectral response

Financing- Ease of financing through

EXIM/ECB route

Cost- Lower module

cost - Inexpensive

land

1. How is Thin Film Technology doing in India?

3. What is driving the growth?a. Technology

4. What could happen?

Thin Film Vs c-Si

Advantages• Temperature coefficient• Better performance under

diffuse light conditions• Higher Energy Yield • Faster energy payback • Module grounding not

required for frameless modules

Disadvantages

• Conversion efficiencies• Area requirement• Higher BOS requirement• Breakage• Aging behavior not known• Materials shortage/toxicity

25 30 35 40 45 50 55 60 65 70 75 80 856%

7%

8%

9%

10%

11%

12%

13%

14%

Efficiency drop at elevated temperatures

a-Si CdTe CIGS C-Si(Mono) c-Si(Multi)

Temperature(Deg C)

Ccon

vers

ion

efficie

ncy

Temperature coefficient – The TF USP..

- Efficiencies at STC(25 Deg C) is misleading, since that is rare in India- c-Si loses efficiencies faster

- Higher energy yield during peak season

Spectral response - Another differentiator

• Ability to absorb more light in the spectrum, especially junction a-Si

• Better performance under diffuse light Lesser shading effect• Higher energy yield

The result : Higher energy yield for TF

- TF consistently generating more electricity

Source: GTM Research

1. How is Thin Film Technology doing in India?

3. What is driving the growth?b. Costs

4. What could happen?

Module cost : C-Si closing in, but TF still maintains some advantage.

Jun-10Jul-1

0

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11Jul-1

1

Aug-11

Sep-11

Oct-11

Nov-11

0.650000000000002

0.850000000000001

1.05

1.25

1.45

1.65

1.85

2.05

Spot price(Euro/Wp)

Avg C-Si(Germany) Avg C-Si(Japan/Korea) Avg c-Si(China/Taiwan)CdTe Silicon Tandem(a-Si/Micro-Si) Amorphous Silicon

Euro

/Wp

Source: pvxchange.com

-CIGS price/Wp closer to c-Si

Land and BoS Costs – Disadvantage for Thin Films

BOS cost comparison : c-Si v CdTe

• Land requirement higher for Thin Films• BoS requirement higher because of lower efficiencies

Source: GTM Research$13,000 higher for Thin Film plant

Operations and Maintenance – Higher cost

• More exposed area – more cleaning, more manpower requirement

• More BOS ….–More Strings–More Fuses–More cable

…..more breakdown possibilities

Still….

• Overall cost lower than c-Si– Land cost in India is negligible– Higher BOS cost offset by lower module price– O&M Labor cost low

• Marketing mantra for TF– $/kWh and not $/Wp

1. How is Thin Film Technology doing in India?

3. What is driving the growth?c. Financing

4. What could happen?

Cost of Financing

• Project financing – very challenging to secure

• Indian banks are more comfortable with recourse-to-balance sheet financing

• EXIM, ECB banks offer attractive interest rates

• Even after hedging and insurance, cost of capital at 8-9% as against 13%+ for local financing

Agenda

1. Introduction

2. How is Thin Film Technology doing in India ?

3. What is driving the growth?

4. What is the future outlook for Thin Films?

5. Conclusion

Thin films domination to continue

• JNNSM - Round 2 : 350 MW allotted– 300 MWp of projects will be in Rajasthan– At least 250 MW expected to go for thin films

• Gujarat – TF likely to dominate

• Rajasthan and Karnataka – TF likely to grab higher market share than c-Si

c-Si manufacturing will require stimulus

• Local content requirement objectives not likely to be met

• Indian c-Si manufacturers will be forced to reduce costs faster to remain competitive with TF

• Policy support critical to develop local PV manufacturing ecosystem

• Rooftop policies could help c-Si because of limited space

a- Si CdTe CIGS

Capital Investments*

$ 2.92 Million / MW $ 1.46 Million / MW $ 2.02 Million / MW

Project timeline 2.5 – 3 yrs 1.5 – 2 years ~ 2 Years

Cost Drivers Raw materials and consumables,CAPEX depreciation

Raw materials and consumables,CAPEX depreciation

Raw materials and consumables,CAPEX depreciation

* Excluding land cost

Will TF be manufactured in India?

-Long lead times and huge investments are challenges-Global excess production capacity is a major roadblock

Agenda

1. Introduction

2. How is Thin Film Technology doing in India ?

3. What is driving the growth?

4. What could happen?

5. Conclusion

Takeaways..

• Thin film technology adopted by majority of Indian developers

• Yield, lower capital cost and better financing options driving TF growth in India

• Local content mandates have had limited impact• Global TF manufacturers benefitting from India’s

solar boom…• … but the Indian TF manufacturing ecosystem is yet

to evolve

Conclusion

• Global market dynamics will have huge impact on the technology selection

• If c-Si prices achieve parity with TF, c-Si will become more competitive

• As long as land is cheap, thin films will rule in India

May the technology with the best $/kWp Win!!

Thank you

Madhavan Nampoothiri

Energy Alternatives India

Mob: 98848-29214

madhavan@eai.in

www.eai.in