Solar-cell business poised for huge growth

SAN JOSE, Calif.--Any way you look at it, the solar business is going to be big in 2010, according to equipment manufacturer Applied Materials.

By then, a number of solar-cell manufacturers will be running plants with 10 production lines, and each production line will be capable of squeezing out 100 megawatts worth of solar cells a year, Charlie Gay, vice president and general manager of Applied's Solar Business Group, said on Tuesday during a luncheon briefing at Solar Power 2006, a conference taking place here this week.

That comes to 1,000 megawatts a year per factory, which is about how much electricity gets produced by a coal or nuclear plant, he said. Build a megasize solar factory, therefore, and you don't have to build a coal-fired power plant. Put another way, the entire output of solar cells made in 1980 could be produced in a day in one of these plants.

These factories, moreover, will be huge: A 1,000-megawatt solar facility will likely be 200 times larger than the typical 300-millimeter semiconductor facility. Those often cover more than 10,000 square meters. Unlike chips, solar cells don't shrink in size over time without losing efficiency.

These factories will also consume a lot of silicon. Gay estimated that each watt of power will require 7 grams of silicon, which means that each 1,000-megawatt plant will need 7,000 tons of processed silicon a year.

"If you divide that by 365 days a year, it comes to about 20 tons a day, or nearly 1 ton an hour," he said. Although the solar-panel industry right now is suffering through a shortage of processed silicon, several chemical processors in China, Japan and Korea are currently building up capacity. This should help alleviate the current shortage by mid- to late-2008, he said.

To Applied, of course, these numbers are music. The company, which is one of the largest manufacturers of semiconductor manufacturing equipment, sells solar-manufacturing equipment too. Earlier this year, the company bought Applied Films, a solar-equipment manufacturer.

Applied Materials also makes equipment for producing TFT panels, the glass that goes into LCD panels; with a few tweaks, the same equipment can be used to produce some types of solar cells. By 2010, Applied hopes that solar equipment will add $500 million to revenue annually.

Until recently, solar manufacturers often developed or at least tweaked their own manufacturing equipment, said Gay, who has worked in the solar industry for years. The rise in demand, however, is prompting more of them to look at equipment from third-party manufacturers, particularly because these third-party manufacturers specialize in high-output machines.

"A whole new set of equipment becomes interesting to the solar industry," he said.

Semiconductors and TFT glass, however, sell for more, in terms of square meter, than solar panels. A square meter of LCD glass might be worth $1,350. These manufacturers can thus afford the multimillion-dollar products that Applied produces. Some solar manufacturers at the show said it remains to be seen how much, in terms of capital equipment, solar cell manufacturers will be able to afford.

Gay, however, noted that demand is rising and that the prices of solar cells, measured in cost per watt, continue to drop. In 1980, a solar panel cost about $21 per watt. (That is, each watt produced from the panel would cost about $21 each over the life of the panel.) Now it's about $2.70 per watt.

By 2010, crystalline silicon solar cells will sell for about $1.25 to $1.50 per watt, while thin-film solar cells will sell for 90 cents to $1.30 per watt. The thin-film cells, however, will be less efficient.

He likened the cost decline to what has occurred in transistors. In 1974, a transistor cost about 10 cents to produce. Now, an individual transistor costs 5 nanodollars, or 5 billionths of a dollar. Producing an iPod back in 1974, he extrapolated, would have cost a few billion dollars.

More from News.com on this story's topics

Environment and Energy

Create an email alert | RSS feed

Manufacturing

RSS feed

Applied Materials

Create an email alert | RSS feed

See more CNET content tagged:
Applied Materials Inc., cell, plant, silicon, factory

Add a Comment (Log in or register) 17 comments (Page 1 of 1)
People do not realize that gas, in a free market, does not suddenly run out
by Björn Lundahl October 17, 2006 11:36 PM PDT
Gas does not suddenly, in a free market run out. Prices today reflect ?expectations? of the available supply and demand for goods and services ?today and tomorrow?. If, for instance, the expectation is that oil supply will decrease or will be less than demand in ten years time, it will influence oil prices today. Prices today will go up. People will have the incentive to conserve (demand will decrease) and to develop new alternatives. Actually, we are probably conserving too much, because of OPEC and Governments taxations are keeping prices higher than they otherwise would be. ?That oil soon runs out? is a political slogan that keeps coming up to keep politicians busy. This political slogan sounds true and will, therefore, ?in the political market? sell. Only true markets can handle this sort of complex things. Compared to markets, Governments are too simple minded and primitive, because of the fact; they lack the essential tools that are needed to solve these kind of ?problems?. They primitively, for example, regulate car manufacturers (and in the end consumers) to produce cars which improve gas mileage and impose upon people speed limits, without knowing if these actions are good or bad. Only markets can tell if conservations are good or bad, because market prices gives people the necessary signals of supply and demand, and people can therefore compare these prices to their own values if they are profitable or not to realize. The essential tools that are needed (which Governments are always lacking) are, as mentioned, ?market forces and the market price mechanism?. Without these mechanisms nothing can be done. For example, a scientist will not reach the truth in trying to calculate physical available quantities and compare that to what he expects physical demand will be. It is silly, it is static and mechanistic. Every individual and every business around the whole world, with all the different knowledge, all the time, and in all possible situations, and which are directly influenced of higher prices, will conserve and try out alternatives. Even people and businesses that are not directly influenced of higher oil prices, also, have incentives to find out alternatives (these solar cell manufacturers are examples of those alternatives). These things happen all the time with all goods, services, capital and raw materials, and it run smoothly without us even noticing it. If Governments were going to replace the markets, we would probably end up with no available goods and services at all! In a sense, this would solve the ?conservation problem? (joke). To make an example of this lack of knowledge and the belief that you can ignore markets, look at the so called ?Club of Rome?, a group that made fools of themselves in the 70s with their book ?Limits to growth? http://www.answers.com/the+club+of+rome?gwp=11&ver=2.0.0.453&method=3 If their predictions were right, we would barely, even, live today! Alex Kozinski wrote and I quote; ?The Limits of Growth made some very concrete and highly alarming predictions: ?there will . . . be a desperate [arable] land shortage before the year 2000 we would run short of gold by 1979, of silver and mercury by 1983, of petroleum by 1990, of zinc by 1988, of tin by 1985 and of natural gas by 1992. The book?s forceful message was that we were headed for a world-wide calamity, and must fundamentally ? and immediately ? change the way we live. Nor was this merely a question of physical survival; at stake was humanity?s very soul: ?The crux of the matter is not only whether the human species will survive, but even more whether it can survive without falling into a state of worthless existence.?? http://notabug.com/kozinski/gorewars.pdf Björn Lundahl Göteborg Sweden
Reply to this comment View all 3 replies
Is this a typo?
by extinctone October 18, 2006 5:16 AM PDT
In the second to last paragraph, should it be megawatt, not watt?
Reply to this comment View reply
I wonder
by Andrew J Glina October 19, 2006 6:49 PM PDT
Do solar cell companies use solar power?
Reply to this comment
Solar Electrons and LEDs
by star power February 18, 2007 6:03 AM PST
The oncoming LED lighting revolution is going to lower the electric requirements of Lighting to a point where Solar Systems could fully serve that electron requirement in Millions of homes and businesses.
Reply to this comment
Powered by Jive Software
advertisement
RSS Feeds
Add headlines from CNET News.com to your homepage or feedreader.
Google
Yahoo
MSN
More feeds available in our RSS feed index.
Today's Top Stories
Google adds privacy policy link to home page
Down to earth with the Blue Angels
Week in review: Microhoogle intrigue
VeriSign names interim CEO
EA debuts new family, sports titles
Most Popular Stories
'Netflix box' to carry more than just Netflix
Jobs, Apple directors face new backdating suit
IE 8 to have antimalware protection
China's military tries out Segways
Stolen: Google employees' personal data
Markets

Market news, charts, SEC filings, and more

Related quotes

Applied Materials (-0.53%) -0.10 18.70
Dow Jones Industrials (0.00%) 0.00 11,288.54
S&P 500 (0.00%) 0.00 1,262.90
NASDAQ (-0.27%) -6.08 2,245.38
CNET TECH (0.00%) 0.00 1,580.18
  Symbol Lookup
Detroit auto show
Detroit auto show

Detroit auto show
advertisement
On MovieTome: SEX AND THE CITY clips are here!
Advanced
search
Advanced
search
Visit other CBS Interactive sites