Oerlikon Solar CEO Jeannine Sargent arrived at the Intersolar conference in San Francisco this week with accomplishments to show off.
Sargent has persuaded her largest customer, Sun Well Solar in Taiwan, to buy more Oerlikon equipment for making thin-film panels (see Sun Well Rolls Out Thin-Film Panels). And she has lined up Flextronics, the electronics-manufacturing giant in Singapore, to help expand Oerlikon Solar’s presence in Asia and beyond.
Sargent is helming a company that is betting on the growth of thin-film solar, which has a small slice of the overall solar-panel market globally. The bulk of the market today is made up of crystalline-silicon panels.
Thin-film companies instead use other types of materials, such as cadmium telluride or – in the case of Oerlikon, amorphous silicon – that aren’t as good at converting sunlight into electricity as the most efficient crystalline-silicon panels, but that can cost less per watt.
Oerlikon Solar, which is already profitable, brought in more than 300 million Swiss francs ($294.92 million) in sales in 2007 and expects to reach sales of 700 million Swiss francs ($684.88 million) this year. The company is scheduled to disclose midyear financial data in August.
Oerlikon Solar is targeting a segment of the thin-film solar industry that uses amorphous silicon and competes with Applied Materials in Santa Clara, Calif. In fact, Oerlikon recently filed a lawsuit against an Applied Materials customer, Sunfilm in Germany, contending that Sunfilm infringed on an Oerlikon patent for making tandem-junction cells (see Oerlikon Sues Sunfilm).
In September, Oerlikon Solar launched its micromorph tandem-junction cell technology, which adds a layer of microcrystalline silicon to a panel that also has a layer of amorphous silicon. The company claims that tandem-junction panels made with its technology can convert 9.3 percent of the sunlight that hits the panels into electricity. The company expects to reach a conversion efficiency of 10 percent by 2010.
By comparison, First Solar (NSDQ: FSLR), the largest thin-film manufacturer today, makes cadmium-telluride panels with 10.5 percent efficiency, and the National Renewable Energy Laboratory confirmed this week that Miasolé, which makes copper-indium-gallium-diselenide panels, has reached 10.2 percent efficiency.
Oerlikon Solar also sells equipment that makes single-junction panels without the microcrystalline-silicon layer, an earlier technology that delivers panels with 7 percent efficiency.
Sargent joined Oerlikon Solar last September after serving as the executive vice president and general manager of Veeco Instruments’ metrology and instrumentation business. She sat down with Greentech Media to talk about the company’s expansion plans and her thoughts on energy policies.
Q: Does Oerlikon Solar plans to expand into other thin-film sectors?
A: We continue to monitor other areas of thin film. Our primary focus now is of course in thin-film silicon — I’ll call it the ramping of capacity of thin-film silicon. As we find the right opportunity, the next-generation technology with an even higher efficiency or a potential new form factor, such as flexible substrates, we will consider entering that market.
Q: What is the sales breakdown between tandem-cell and amorphous-silicon equipment?
A: Within a quarter after we announced the micromorph tandem-cell technology last September, almost all of our new businesses were in micromorph tandem cell. Because there is so much more advantage in cost and performance. There is nothing wrong with amorphous silicon. In certain cases, it’s more economical for customers to just continue to run the amorphous-silicon line. You will see amorphous silicon in the marketplace for a long time.
Q: What is Oerlikon Solar’s plan for expanding its manufacturing operations?
A: Our core base is in Switzerland. Our Asia hub in Singapore is coming on line late this year, and the pilot line will be up and running at the beginning of 2009. We also will have customer support, training, engineering and research and development. With our partnership with Flextronics, we will add capacity globally. But initially we will start with Asia because a lot of our installed capacity in 2009 will be in Asia.
Q: Some analysts saw your lawsuit against Sunfilm as a way to prevent other non-Oerlikon customers from making tandem cells. Is that true?
A: It’s inappropriate for me to comment on the ongoing legal action. I will say that, in general, tandem junction is not something that is a patented concept. I like to compare it to DRAM [dynamic random access memory]. There are many types of DRAMs in the world, and companies such as Toshiba or Micron or Infineon have different types of products and their own intellectual property. We have a proprietary and patented version of the product, the Oerlikon micromorph tandem cell.
Q: How do you persuade potential customers to choose Oerlikon Solar over Applied Materials?
A: Today I have the equipment and products proven in manufacturing. It works, and it’s certified and demonstrated to have a proven technology.
Q: Where are the emerging markets for Oerlikon Solar?
A: Based on our orders, it’s quickly becoming Asia. I anticipate that, in 2009, Europe will be strong, Asia will be strong and the United States will begin to turn on. The percentage for the United States will grow much larger in 2010.
Q: What are your challenges in leading Oerlikon Solar?
A: I think it’s the opportunity we have and being flexible and adaptive to respond to a dynamic market. This is very exciting because we are optimizing the technology and cost competiveness at the same time aggressively ramping in the industry. What differentiates us is not only our ability to ramp up but also to provide our customers with the service and support to succeed in the marketplace.
Q: Where will your next manufacturing plant be after Singapore?
A: We are keeping our options open, but we expect it will be in North America. We suspect the decision will be made in 2009. It’s likely to be in the United States. But you will note that Mexico recently announced a $3.3 billion incentive program, and there already are companies such as Q-Cells from Germany that are taking advantage of that. There also are programs in Canada.
Q: How have the expiring feed-in tariff in Spain and the reduced feed-in tariff in Germany impacted your customers?
A: I think the feed-in tariff system has done what it intended to do, to spur the economic model. People are just adjusting. I don’t think they are particularly concerned. They never had expectations that [a] feed-in tariff will stay the same forever. I think it’s more an adjustment that is expected as the business is established. The other thing that’s happening is solar is coming down in cost dramatically, so the economic model is still working even with different feed-in tariff programs.
Q: Many solar companies are concerned about the expiring investment tax credit in the United States as well. Has it affected Oerlikon Solar’s business?
A: I don’t see it as having an immediate impact on Oerlikon, given that our focus for the short- and midterm growth is in Europe and Asia. It does, though, impact the rate at which U.S. market will grow. I am an advocate of the investment tax credit. What’s important for the government to do is to set a consistent path and with multiple years of visibility. If we have predictability, then we can build business plans around predictability. I think the U.S. needs to take a [stand] and have a multiyear investment tax credit. Right now we are in a stalemate because we are waiting for an election and no one wants to make a decision, which is unfortunate.
Q: For the solar industry, does it matter whether Sen. John McCain or Sen. Barack Obama becomes the next president?
A: Either candidate believes in renewable energy and the management of carbon emissions. It’s likely that the way in which a program evolves beyond the investment tax credit will be slightly different depending on whether it’s a Republican or a Democrat in office. I don’t think either party can get away from having to deal with this [investment tax-credit] issue, not at the price of oil per barrel.