Solar panel industry achieve $1 per watt grid-parity

Arizona based First Solar has achieved a major milestone in reducing the manufacturing cost for solar panels below the $1 per watt price barrier - the target necessary for solar to compete with coal-burning electricity on the grid or grid-parity. Using cadmium telluride (CdTe) technology in its thin-film photovoltaic cells, First Solar claims to have the lowest manufacturing cost per watt in the industry with the ability to make solar cells at 98 cents per watt, one third of the price of comparable standard silicon panels. The efficiency is in part due to a low cycle time - 2.5 hours from sheet of glass to solar module - about a tenth of the time it takes for silicon equivalents.

Thin film cadmium telluride solar panels have an active element just a hundredth the thickness of silicon used in conventional solar panels built on a glass substrate, facilitating the production of large panels. The process and machinery used is so secret that visitors to the company's 500 megawatt production facility are barred from getting an up close look at the production line.

First Solar

First Solar was founded in 1999, but the history of the company goes back decades. Founder Harold McMaster made his first fortune in the late 1940s with Permaglass and later went onto Glasstech. McMaster was one of the world's experts on tempered glass. In the 80s, McMaster became interested in solar technology and experimented with different ways to put photovoltaic materials on glass. He worked first with silicon and then cadmium-telluride with a company called Solar Cells, which was reincarnated as First Solar in 1999.

First Solar began full commercial operation of its initial manufacturing line in late 2004. From 2004 through today, manufacturing capacity has grown 2,500 percent to more than 500 megawatts in 2008. The company expects its annual production capacity to double in 2009 to more than 1 gigawatt, the equivalent of an average-sized nuclear power plant. These escalating volumes have been accompanied by a rapid reduction in manufacturing costs. From 2004 through today, First Solar’s manufacturing costs have declined two-thirds from over $3 per watt to less than $1 per watt and the company is confident that further significant cost reductions are possible based on the yet untapped potential of its technology and manufacturing process.

The alternatives

Silicon cells, which have dominated the market since its commercial launch in the 1950s, may still represent viable competition to Thin Film technology. Silicon cells have an average cell conversion efficiency of around 16-20% while Thin Film CdTe panels are only 10.6% efficient. Due to the enormous growth experienced by the Solar industry in recent years, the price of raw silicon peaked in 2008 at $1000/kg which has kept the manufacturing cost of silicon based cells fluctuating between $3 and $4 per watt. Now that increased silicon production capacity has caught up with demand from the solar cell industry and the Global financial downturn has reduced demand from the computer chip industry, the price of silicon has dropped to under $40/kg. The result - we can expect to see substantial deductions in the cost of silicon solar cells in the near future.

There are also other technologies on the horizon including cells based on copper indium gallium ­diselenide (CIGS), silicon on glass, and the combination of ­germanium, gallium arsenide, and gallium ­indium phosphide all of which are competing to lower the cost of solar cells.