Are amorphous silicon thin films gaining acceptance?

That seems to be the case, albeit not at a fast clip, as several amorphous silicon companies began to announce sales deals and installations that use their solar panels in recent months. Many of these companies began commercial production over the past year or so.

In November, Signet Solar said it snagged a deal to ship at least 10 megawatts of solar panels to Tejados Fotovoltaica de Industriales Group in Spain. Signet also is co-developing a 1.8-megawatt project with BSC-Solar in the Czech Republic.

Over the summer, Sharp lined up a supply contract for a 5-megawatt project in central California. Sharp has been making crystalline silicon solar cells and related products for decades, but began investing heavily in amorphous silicon solar panel production in recent years (see Sharp Guns for U.S. Thin Film Market).

Enel Green Power, a part of the big Italian power company Enel Group, now plans to build a 25-megawatt project in southern Italy using amorphous silicon thin films. The company announced the project just yesterday and hasn't disclosed its supplier yet. The project could end up being the largest amorphous silicon thin film installation anywhere.

Other amorphous silicon solar panel makers with sales to brag about include Masdar PV, Tianwei SolarFilms, Astronergy and Sunfilm (see Masdar PV: First Commercial Project and Factory Expansion).

How amorphous silicon could compete in price and performance in the near- and long-term has always puzzled analysts and many manufacturers who make solar panels with other ingredients for turning sunlight into electricity (see Amorphous Silicon: Losing the Shakeout?).

The technology gained the spotlight during several years ago when crystalline silicon, which goes into majority of the solar panels on the market, was super expensive and commanded hundreds of dollars per kilogram.

Amorphous silicon seems a promising alternative because only a thin layer of it would be required to produce power, about 1 percent to 2 percent of the amount for crystalline silicon solar panels. So using amorphous silicon material would be cheaper. Amorphous silicon proponents also argue that the technology can perform much better in hot weather or low-light conditions than crystalline silicon.

But it's not as efficient at churning out electricity as crystalline silicon or other types of alternative semiconductor compounds such as copper, indium, gallium and selenide (CIGS). That low efficiency, between 6 percent and 9 percent, largely limits amorphous silicon thin films to projects located on larger parcels.

"We believe thin film is the right technology for the mainstream, but we don't have 10 to 15 years to resolve technology issues," said Rajeeva Lahri, CEO of Signet Solar, during a solar conference in San Francisco last week.

Signet began commercial production in the fall of 2008 and has shipped about 12 megawatts of its solar panels this year, he added. The company expects to ship 30 megawatts of its single-junction thin films in 2010.

With the crash of crystalline silicon pricing by about 50 percent in the past year, however, the lure of amorphous silicon or other alternative materials began to wan somewhat (see Thin Film Players Feeling Besieged).

Some analysts are predicting the decline of First Solar, a cadmium-telluride solar panel maker and one of the world's largest, even though First Solar can make its products far cheaper than just about anyone else. The company's solar panels have an average efficiency of 11 percent.

"There is still a lot to be done for amorphous silicon to be competitive, but it's too early to write it off," said Shyam Mehta, a senior analyst with GTM Research. "Where it is now isn't very competitive. Where it could be in two or three years could be competitive."

Mehta noted that in the long run, the cost of amorphous silicon, the material itself, should remain cheaper than polysilicon. Because many amorphous silicon solar panel makers are new to the market, there is room for improving and boosting the rate of their production. That would then drive manufacturing costs below the magical $1 per watt, a threshold to cross in order for solar electricity to start to rival the price for power from fossil fuel plants.

Sharp is set to be a key amorphous silicon player, given its ability to build large factories. The company has built a 160-megawatt amorphous silicon thin film factory in Katuragi, Japan. It still plans to open its new factory in Sakai, Japan, in March next year, said Ron Kenedi, vice president of Sharp Solar. The Sakai factory will start with an annual capacity of 160 megawatts, and Sharp wants the amoprhous silicon solar panel plant to eventually reach 1 gigawatt of capacity.

The fall of crystalline silicon prices has shrunk the time available to competing technologies to get to certain efficiency and cost goals in order to compete effectively.

Trony Solar, which postponed its initial public offering in the U.S. market this week, said its average manufacturing cost reached $1.09 per watt during the third quarter of this year, according to its filing with the U.S. Securities and Exchange Commission.

Oerlikon Solar, the Swiss factory equipment maker, is currently selling machines that could decrease the production cost to $1 per watt or below.

But it would take time for its customers to get there, most likely in 2011, said Chris O'Brien, head of marketing and government relations in the United States for Oerlikon, during a recent talk at a solar conference in San Francisco.

Major crystalline silicon solar panel makers haven't broken that $1 per watt manufacturing costs yet. The average selling prices for these panels range from $2 to $2.70 per watt between Chinese and European manufacturers, Mehta said.

First Solar says its manufacturing cost is about 85 cents per watt.

Lahri reasoned that pricing for crystalline silicon material won't keep falling quickly forever, and will plateau at some point.

"The percentage of cost reduction is higher for amorphous silicon than crystalline silicon," Lahri said. "We've just started on cost reduction. As we improve efficiency and economics of scale, we will drive the costs down."

Meanwhile, amorphous silicon companies could get a boost from a Chinese government program to subsidize solar energy system installations.

In the "Golden Sun" program, the government has singled out amorphous silicon technology for setting the incentives (see Here comes China's $3B 'Golden Sun' Projects).  

China already is home to quite a few amorphous silicon solar panel makers, including Trony, Tianwei and Astronergy. Earlier this week, China Gogreen Energy said it had secured a memorandum with the city government of Zhengzhou in the Henan province to form a joint venture for producing amorphous silicon solar panels.

The two planned to invest a total of RMB3.25 billion ($476 million) for the joint venture, which would build a 100-megawatt factory in 2010 and another, 400-megawatt plant between 2011 and 2013. The investments wouldn't cover the costs of land and buildings. 

Photo A 1-MW project in South Korea with Trony Solar's panels.