Solar-cell fab capacity rising

San Jose, Calif. -- Not long ago, solar energy was considered a niche market. Now, solar-cell vendors are scrambling to expand their capacities to meet huge demand from homes and businesses worldwide. Companies that have recently announced new and massive solar-cell production plants include Energy Conversion Devices, Evergreen Solar, Sharp, SunPower and Suntech.

Solar-cell providers are in production or are building next-generation 150- and 200-mm factories, which cost about $100 million each. The factories produce 200 to 500 megawatts per year.

In general, each factory could produce 70 to 180 million wafers annually. The capital cost for a solar-cell plant is projected to be around 50 cents per watt.

Vendors are expanding for good reason. The solar-cell market hit 1,638 MW in terms of worldwide production in 2005, up 30 to 35 percent from 2004, according to Piper Jaffray Inc. In 2006, the solar-cell market is projected to reach about 1,680 MW.

One of the problems with the solar market is a shortage of polysilicon, the key material used in solar cells. But as polysilicon becomes more available over time, the solar sector is projected to resume growth and jump 15 to 20 percent in 2007, according to the firm.

Today, solar energy is twice as expensive as that derived from the current electricity grid in terms of cost per watt. As solar vendors move to reduce the costs of the technology, solar energy could reach the "crossover point" and compete favorably with the electricity grid by 2010 to 2015, said Robert Stone, an analyst with SG Cowen Securities Corp. (New York).

Even with the cost and materials issues, demand for solar cells far exceeds supply today, Stone said. "The energy problem is a concern for consumers and businesses."

Photovoltaic (PV) suppliers are not exactly moving at the pace of Moore's Law, but they are working hard to boost the efficiency of their products. "PV watts have not come down like transistors," said Richard Swanson, president and chief technology officer for solar-cell maker SunPower Corp. (San Jose, Calif.).

To boost efficiencies, solar-cell makers are pushing thin-film feature sizes from 350 to 220 microns. The eventual target among vendors is 100 microns. Vendors are also looking to boost cell efficiency, from about 14 percent now to 20 percent by 2012.

An initiative approved in January by the California Public Utilities Commission could make the Golden State one of the world's largest producers of solar energy. The initiative will provide $2.8 billion in incentives to promote the installation of 3,000 MW of solar collectors on homes and businesses.

In his State of the Union address last month, President Bush unveiled an advanced energy initiative with an aggressive goal of replacing 75 percent of U.S. oil imports from the Middle East by 2025. "Federal support for research and development to find new and more-effective solar technologies is a key factor in driving down the future cost of solar electricity," Ron Kenedi, vice president of Sharp Corp.'s Solar Energy Solutions Group, said in a recent statement.

Sharp, the world's largest solar-cell vendor, recently expanded its solar-cell production output to 400 MW worldwide per year, from 315 MW per year.

U.S.-based companies are also expanding. Last year, Evergreen Solar Inc., a manufacturer of solar power products, broke ground on a manufacturing plant in Thalheim, Germany. The plant is being constructed by EverQ, a recently formed venture between Evergreen (Marlboro, Mass.) and Q-Cells AG (Thalheim). In total, Evergreen's production will jump from 15 MW today to 95 MW by 2007, according to Stone.

SunPower, a subsidiary of Cypress Semiconductor Corp. (San Jose, Calif.), installed its third 25-MW solar-cell manufacturing line in its Philippine factory. The new line, which began ramping in the first quarter, will increase SunPower's manufacturing capacity to 75 MW.

SunPower received approval from its board to increase its capacity to up to 300 MW, which will necessitate a second solar-cell-manufacturing facility.

Energy Conversion Devices Inc. (ECD) recently said that it plans to expand its solar-module production to 300 MW by 2010. ECD's solar unit, United Solar Ovonic, currently manufactures solar modules at a 25-MW production facility in Auburn Hills, Mich.

Germany's SolarWorld AG is assuming a 100 percent equity interest in the crystalline solar activities of oil giant Royal Dutch Shell plc. The production capacities being transferred to SolarWorld amount to some 80 MW.

Suntech Power Co. (Wuxi, China) is looking to boost its capacity from 120 to 240 MW, according to Stone.