Turnkey Thin-Film Solar Gear Is a Misnomer: Masdar PV CEO

masdarPVlogoCompanies like Applied Materials (s AMAT) and Oerlikon are building businesses out of selling so-called “turnkey” (ready to use) thin-film solar manufacturing equipment to would-be solar developers. The idea is that instead of developing the technology itself, a solar maker can just buy the gear and start churning out panels with relative ease. But the reality is, it’s not always that easy.

Masdar PV, a subsidiary of Abu Dhabi’s renewable energy initiative, delivered its first thin-film panels from its factory in Ichtershausen, Germany, this week using an Applied Materials SunFab line, but according to CEO Rainer Gegenwart, the line wasn’t exactly plug and play. Instead — at least initially — Masdar PV ended up with a lot of broken glass.

Glass has to be properly treated in order to avoid chips and damage to its edges that could render it unusable for solar panels, and handling it proved a real challenge. As Gegenwart noted, while Applied and Oerlikon come from the semiconductor and display industries, which makes them very good at large-area coating machines, that doesn’t necessarily give them expertise in packaging PV panels.

Based on its own solar production expertise, Masdar PV attempted to improve the line when it placed its order by modifying some of the processes and switching out some of the machines with others, he said. If it had it to do over again, Masdar PV would change even more of the components than it actually did initially, he said. “AMAT, as well as Oerlikon, are not shipping ‘turnkey’ because that means the product line [arrives and just] starts,” Gegenwart said.

It’s also not clear that Applied Materials and Oerlikon are saving their customers significant cash. Oerlikon in July announced technology that could bring costs down to $1.20 per watt, although it’s shooting to cut that to less than $1 per watt. But First Solar (s FSLR) has already managed to lower its manufacturing costs to 85 cents per watt, although to be fair, the company’s also been producing for a longer time and at larger volumes. “They have not proven it’s much cheaper to do turnkey,” Gegenwart said. “We expect Applied Materials and Oerlikon to work much closer with their customers to make both sides more successful.”

Despite all of that, Genewart said Masdar PV doesn’t regret buying lines from Applied Materials: “It was a real advantage for the industry that equipment suppliers are offering complete equipment lines,” he said. Masdar PV expects its new factory to produce 3 MW of panels by the end of the year, most of which are already sold. While the company didn’t disclose the annual capacity of the plant, it said last year that its first two factories would have a combined initial capacity of 210 megawatts.

Masdar PV plans to start shipping panels to Abu Dhabi this year, with the first Abu Dhabi installation using its panels expected to be completed this winter, and hopes to ship its first panels to North America next year, Gegenwart said. The company is already building a sales and customer support team in Abu Dhabi to help develop the market, which it believes will take off in the next couple of years. And it’s started construction on its second plant, also in Abu Dhabi, although operations could be delayed at that plant depending on the market, Gegenwart said. Masdar PV is taking a wait-and-see approach in the U.S., however. It plans to evaluate the market in order to determine whether to build a factory there in 2010 and 2011.