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Chasing First Solar: Why Oerlikon, Applied Materials Think They Can Catch Up

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firstsolarmaterialDespite the best efforts of solar firms to reduce cost and raise the efficiency of solar material, many in the industry still find themselves chasing thin-film solar darling First Solar (s FSLR), which makes high-efficiency cadmium-telluride solar film panels. In particular, Oerlikon Solar (s OERL) and Applied Materials (s AMAT), which have gigawatts of orders and backgrounds in semiconductor-manufacturing equipment, are the competitors best positioned to one day give First Solar (s FSLR) a run for its money. But the two make gear to produce solar material from an older technology, amorphous-silicon, and as a result, some in the industry wonder whether they will ever be able to catch up to First Solar.

Despite the down economy, First Solar has fared well. In March, the company said it had surpassed 1 gigawatt of solar production, and this month said it had reached an average conversion efficiency of 10.7 percent. First Solar reached a manufacturing cost of 93 cents per watt in the first quarter of the year.

In comparison, Oerlikon last year announced technology that would cut its customers’ manufacturing costs to $1.20 per watt. Chris O’Brien, head of North American market development for Oerlikon, said he expects its lines will deliver a cost of 70 cents per watt by the end of next year. And in May, the company said it had achieved an initial conversion efficiency of 11 percent, which O’Brien said comes out to about 9.5 percent of stabilized efficiency.

The gap is large enough for the price-sensitive solar industry that some in the biz are starting to question whether amorphous silicon can ultimately compete with First Solar. Oerlikon and Applied Materials will have to prove the cost advantage of these lines in order to keep growing, said Rainer Gegenwart, CEO of Masdar PV, at a panel at the Intersolar North America conference in San Francisco on Tuesday. “Turnkey has to pay off for buyers as well as suppliers,” he said.

But Oerlikon and Applied Materials officials say that amorphous-silicon has the potential to improve as the cumulative amount produced and installed increases. Oerlikon’s O’Brien says that with customers building these plants all over the world at the same time, the technology to turn amorphous silicon in solar material could potentially scale more quickly than the technology deployed by a single company like First Solar. As Anish Tolia, head of market development for the Americas at The Linde Group, put it: “The problem with First Solar is there’s no Second Solar.”

Tolia also believes the proprietary nature of First Solar’s business model has kept cadmium-telluride technology from taking off even more quickly. In the meantime, both Applied and Oerlikon said they are making steady progress to narrow the efficiency gap with First Solar.

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