Solar Point of View: Building a New Value Chain for Solar PV

By Sharone Zehavi

Sharone Zehavi, chairman, president and CEO of Scifiniti, on the importance and opportunities of optimizing the PV industry’s supply chain: “No longer should it require $1 billion in start-up costs to ramp up manufacturing.”

To date, billions of dollars have been spent on building factories to produce solar wafers and cells. But as the global solar photovoltaic (PV) market continues to grow, the industry is going to need to find innovative ways to ramp up production without spending billions of dollars on new factories.

One way that holds promise is leveraging new technologies and making improvements in the supply chain. By doing so, there is potential to cut the cost of manufacturing solar wafers by more than half. And as the economics of solar cell and module development radically change, the industry will be able to build even greater value for the solar PV market.

 

Keeping Pace with Demand

The solar power market is growing at warp speed, with some estimates expecting that total installations will reach more than 45GW in this year. As a result, manufacturers will have to add new capacity to keep up with demand. But this could be a challenge because ramping up production comes with a big price tag. Adding new manufacturing capabilities can cost upward of $1 billion, in some cases, and take six months to a year to become operational. The cost and the lag time to production could have a chilling effect on the increasing demand down the solar PV supply chain.

Further complicating matters is the fact that during the past three years, solar PV installed system prices and module prices have all fallen by more than 50 percent, while a shakeout of uncompetitive PV cell manufacturers has caused the number of suppliers to decline from 250 in 2010 to 150 in 2013, according to the March 2014 NPD Solarbuzz “Marketbuzz” report. The report also noted that as a result of these falling prices, manufacturing consolidation and a more balanced supply-demand picture, PV demand will continue to grow and the solar industry will shift from a demand-constrained market into a classic supply-driven market in 2014.

 

The Importance of Optimizing the Supply Chain

A factor that could have the greatest impact on the future of the solar market is the current lack of optimization in the supply chain, which has a real potential to put even greater pressure on pricing in this commodity market.  The International Photovoltaic Equipment Association (IPVEA) estimates that the global PV industry is currently losing between $400 million and $500 million annually due to lack of supply chain optimization, and this total could reach $1 billion by 2018.

With these facts – and increasingly tighter margins – in mind, the industry needs to revamp its thinking about the supply chain to gain economies where costs are the highest – at the wafer level.  No longer should it require $1 billion in start-up costs to ramp up manufacturing. Instead, the industry needs to consider how they can use existing factories to handle new, lower-cost processes of solar wafer development that also drive down waste and use of toxic chemicals and minimize labor expenses, all while ramping up the volume of production.

 

Recycling Today’s Factories for Tomorrow’s Technology

Technological changes are being introduced that lower the cost of producing solar wafers and enable them to be produced in existing factories without having to change their manufacturing technology or purchase new equipment, and consumables used during production.  On such example is a new generation of silicon wafers that show promise in cutting costs by up to 65 percent, compared to current multicrystalline wafers, while delivering efficiencies that are comparable or better.

These silicon wafers are manufactured in a low-cost, continuous, atmospheric process that deposits a 30µm layer of industry-standard crystalline silicon on a conductive substrate. The ceramic-like substrate, which includes a barrier layer to prevent contamination between layers, is very resistant to breakage, which improves yields in high-volume cell manufacturing using conventional equipment. This unique manufacturing process results in use of only one-tenth of the silicon and one-third of the energy required for conventional c-SI wafers, with greater consistency in wafer production.

There are additional savings – both cost and environmental – to be had in this manufacturing process as well. Operating expenses are reduced because no crucibles, wire saws or slurry are required.

The wafers produced by these means offer greater flexibility, since they can be manufactured as p-type or n-type at no change in cost..  All totaled, this new wafer-manufacturing process is capable of reducing capex to $14 million for 100 MW of production line, compared to $60 million for standard c-SI wafers.

As demand continues to grow for solar PV solutions around the world, the industry will have to look at new and creative ways to manage greater demand in a commodity market.  By leveraging new wafer technologies, which can be manufactured in existing facilities, there is an opportunity to lower the costs and strengthen the entire solar value chain.

 

About the Author

Sharone Zehavi has more than 20 years of experience in the technology and semiconductor industries. In 1999, he founded Global Factory Inc., a provider of solutions to monitor and manage distributed manufacturing, which was later was successfully sold to Siemens. Prior to that, he served as vice president of Business Development at Chip Express. During his 10 years at Chip Express, Zehavi held several executive positions in process, R&D and operations management. Most notably, he drove the in-house production facility from inception and was responsible for all semiconductor fabrication. Throughout his career, Zehavi gained experience in manufacturing operations, engineering, and business development at companies such as National Semiconductors. He served as the co-inventor on several patents related to semiconductor processes. Zehavi attended the Technion Institute of Technology in Israel, where he graduated Cum Laude with B.Sc. and M.Sc. degrees in Electrical Engineering and Optoelectronics.