Ucilia Wang 11 09 09, 5:16 PM

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First Solar and Cadmium Hazards

The European Union is considering tightening a ban on hazardous chemicals. The ban would significantly cripple First Solar and other companies that make solar panels with cadmium as a key ingredient.

The Swedish government, which holds the EU presidency, has proposed to include all electronic products as part of an effort to update a law on hazardous chemicals. Cadmium is already considered a hazardous substance, but solar panels aren't covered under the current law.

In addition, a committee in the European Parliament is drafting a proposal that would nudge solar companies to stop using cadmium, reported the New York Times Monday. The proposal would require companies to apply for what amounts to a permit to use cadmium. The permit would last four years and could be renewed.

Tempe, Ariz.-based First Solar is one of the top 10 solar panel makers in the world and uses cadmium-telluride in its panels. Its success has helped to make cadmium-telluride panels competitive against the more widely available silicon-based solar panels.

As a result, rafts of cadmium-telluride solar companies have cropped up in recent years hoping to replicate First Solar's success. Some of these startups include Abound Solar, PrimeStar Solar and Xunlight 26.

PrimeStar has attracted investments from General Electric, which has decided to close its silicon solar panel factory in the United States and focus its solar strategy on selling thin-film solar panels like the ones under development by PrimeStar.

Europe is the largest solar market, so any move by the EU to restrict cadmium-telluride solar panel sales would cause a big problem not just for First Solar.

First Solar wants the EU to specifically exclude solar panels from being added to the revised hazards materials law. Aggressive goals by European countries to cut emissions and embrace renewable energy could help First Solar's cause.