That's not because it's easy, or even because it's a good idea to try, but when well over a billion dollars in investment pours into a given technology, something is bound to come out the other side - eventually. A seductively high efficiency potential technology with very low potential materials costs, CIGS has been just over the horizon for a decade or more, but has enjoyed a huge influx of capital and increase in the number of programs chasing in over the last 5 years. Similar to other solar thin film technologies, device complexity, effective yield, throughput, and process control issues are always the bugaboo.
Given its seductivenes, its somewhat capricious nature, and the siren filled history of the technology, perhaps we should think of CIGS like a woman, and all men need a few rules of thumb to keep in mind before we jump in. Here are mine (for CIGS, not women):
Number one, like most thin film technologies, $100 mm in investment is the ante up to play the game. Just because you spend it doesn't mean you get real product out, and with CIGS, you tend not to know whether anything is workable until oh, say $50 to $100 mm is already spent.
Number two, what you think you know, you don't. Until the pilot plant has been operating for a few years, companies generally really underestimate what they don't know.
Number three, remember those experiments and great idea you sold your investors on, the hard part is not there, the hard (read risky) part is ALL in the "it's just engineering" end of the scale up process you told the investors was "fairly straightforward". This isn't IT, it's deposition with a very commoditized end product.
Number four, whatever the projection as far as timing, add 3 years, maybe 5. I'm not kidding here, I said years.
Number five, when the words "fast", "roll to roll", "reel to reel" or anything else equating to speed in the process are in the pitch deck, translate that to read excruciatingly slow in the development timeline, and lots of "issues" popping up in those nasty yield and process control areas.
Number six, when investing, be very careful about that "yield" number and the "capacity" numbers they made up based on it. All thin film development companies keep "little black books" with the data and charts on every process run they've ever made. Read every single one of those charts, and ask lots of stupid questions about why only 4% of the total square footage produced is above 6% efficiency in run XYZ. Think in terms of "effective total average yield". That's where the problems are hiding.
CIGS watchers have a number of darlings to follow. There's Miasole, which now under new management is rumored to have substantially tightened down its development discipline to take it's shot, Nanosolar, another Silicon Valley venture darling that has been described by many observers along the lines of, "never met hype they didn't like", but with a seductively low cost printable process if they can get it to work, Solyndra, the "stealth" company with the big sign on I-880, Heliovolt, the Texas-based hot CIGS deal of last year, which burst on to the fundraising scene on the back of it's still extremely early stage "FASST" technology. And those are just the largest of the US based venture backed deals, without including Honda, IBM, DayStar, Ascent Solar, Solopower, and literally dozens upon dozens of others around the world with significant backing (though all at a very, very early stage). Wikipedia has a decent cut at a list, though by no stretch of the imagination comprehensive.
My best estimate is that most of the venture investors in each of those deals personally looked in depth at the manufacturing process of single digit numbers of competing approaches before investing. And only read the little black book on two of them. That strategy was tried, with ahem, "mixed" results, in fuel cells a few years back. We'll see how well it works in thin film solar.
And of course, as with most things in solar, the major players should probably be watched more carefully than the startups. I've always liked larger companies to crack thin film issues, in no small part because the term "stage gate" tends to mean something to them.
But my personal favorite for front runner currently is Arizona based Global Solar, a solar company I have been following for years. Their announcement a few months ago of 10% efficiency in production runs, was pretty much lost in the crush of press around solar, for reasons unfathomable to me.
While admittedly not yet proven in a full production environment (they are working on the scale up to 30 MW plants) they do have the massive advantage of having run virtually the only operating CIGS pilot plant in the world - and I believe have shipped more volume of CIGS product than anyone if not everyone else. True to form, that technology, which originally came out of the Tuscon Electric backed ITN Energy Systems labs in Colorado which later did Ascent Solar, has had an estimated $150-$200 mm plus invested in it over the last decade, before Solon AG bought the company for a reported $16 mm. Though to be fair, current management under CEO Mike Gering was brought on well into that process. So while I'll keep my fingers crossed that some one will crack the CIGS nut, and continue to be flabbergasted at the $1 Bil plus valuations estimated to have been achieved by some of the startups named here for very large science projects, when it comes to the one to watch, Global Solar is my personal pick.
Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding CEO of Carbonflow, founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of Cleantech.org, and a blogger for CNET's Greentech blog.
1. The company is energy or environmental technology related. 2. I like their products. 3. The market needs them. 4. The company is smart about building their business. 5. I'd like to own the company if I could (for the right price, of course!). 6. It is not already one of mine (my apologies to my friends Zenergy Power).
I have included cleantech companies big and small. Volume I surprisingly ended up with a lot more solar companies than I would have guessed, and no biofuels. Perhaps I really am a closet solar fanatic.
1. Sharp Electronics - In solar, still the biggest, and still growing. Enough said.
2. Det Norske Veritas - DNV is a massive 150 year old risk management firm. Their auditors underpin roughly half of the carbon markets. In carbon, audit and verification is everything. I could not leave them off.
3. IBM (NYSE:IBM) - What IBM is doing in smart grid is very exciting. They are part of a large proportion of the smart grid implementations that are in process, and a huge proponent of open standards. Smart grid is to electricity what fiber is to telecom. It underpins everything.
4. Applied Materials (NYSE:AMAT) - The future of photovoltaics lies in scaling thin film manufacturing process. Who better to do this than the dean of semiconductor capital equipment. I broke the story of Applied's entry to solar in the blogosphere in 2006, and if anything underestimated how hard they were pushing. The whisper mill has been whirring that the installations of their plants are not on track. Not only do I have faith they will get there, I think it is critical to the industry that they do.
5. Fuel Tech (NASDAQ:FTEK) - I wrote about them in 2007. The CEO John Norris is a long time friend and an excellent operator. Cleaning up coal is a huge business that needs to be done, and they do it well.
6. Fat Spaniel - Distributed power, solar included, is a ticking time bomb without independent monitoring. Fat Spaniel does it the best.
7. Smart Fuel Cells (XETRA:F3C.DE) - I wrote about them recently. I helped create a fuel cell business in 2002. This is the first fuel cell company in 5 years that has intrigued me. They actually ship product with solid gross margins. That is a start.
8. First Solar (NASDAQ:FSLR) - Lowest cost producer in the photovoltaic business. Guaranteed to make the list until dethroned.
9. Global Solar - I have been following this company for a long time. CIGS is very hard and has broken (or is currently breaking) hundreds of millions or billions of dollars worth of wannabes. This management team, led by Mike Gering, respects how hard it is. And since they have actually been running a pilot plant shipping product for 3 years, so we need to take note when they say they have cracked the manufacturing scale nut.
10. Schott - Long a major player in crystalline silicon photovoltaics, amorphous silicon photovoltaics and concentrated solar thermal, where they are one of the top manufacturers of solar thermal receivers. That balance is unique, and exciting.
Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is Chairman of Cleantech.org, and a blogger for CNET's Greentech blog.
Life is just not getting better for Miasole.
Dow Chemical announced Monday that it has selected Global Solar to provide copper-indium-gallium-selenide (CIGS) solar cells for its solar roofing project with the Department of Energy. Last May, the Department of Energy gave Dow a three-year, $9 million grant to develop solar roofing under the Solar America program.
Global Solar Energy replaced Dow's original CIGS solar cell provider. And who was that? Miasole.
Rumors also swirl that a three-year research grant under the Solar America program made directly Miasole is coming to an end. The company received $5.8 million in the first year of the program, which started last year, and could qualify for up to $20 million over a three-year period, assuming it met its goals. (Miasole was participating directly, and as a partner with Dow, in Solar America.). Sources close to the Energy Department, however, have said that the Miasole grant isn't being renewed.
Fifteen months ago, Miasole seemed headed for success. The company had pulled in more than $56 million in venture capital and said it was set to begin production of thin film CIGS cells in 2007. Many believed the company would be the first to come out with CIGS commercially. But by spring 2007, Miasole in bringing its products to market last year. The solar cells coming off of the company's initial production line were on average only able to convert 4 percent to 6 percent of the sunlight that struck them into electricity, below the company's 8 percent to 10 percent goal.
The company also had to lay off employees and swapped management teams.
By contrast, Global Solar moved into commercial production late last year, around the same time as Nanosolar, and says it is producing CIGS cells with 10 percent plus efficiency. Global uses evaporation techniques to deposit the CIGS materials onto film. It's less high tech than some of the processes used by Miasole and other CIGS firms, but Global likes to point out that it does work.
Again, we have not spoken to Miasole. We do not have a clear understanding why Dow switched CIGS providers and have not officially confirmed that the grant made directly to Miasole under the Solar America program will not be renewed. The Global Solar/Dow announcement, however, is somewhat unambiguous.
The race is on to make most the cost-effective solar panel, and little-known Global Solar Energy says its flexible, thin-film cells have got the lead.
Company president and CEO Mike Gering told investors at the recent Piper Jaffray's Clean Technology and Renewables Conference that the company is trying to raise $100 million in private equity to finance construction of two new plants--one in Tucson, Ariz., and one in Berlin.
A flexible, thin-film solar cell from Tuscon, Ariz.-based Global Solar Energy.
(Credit: Global Solar Energy)The company is one of several developing thin-film solar cells made from the combination of materials copper indium gallium and diselenide (CIGS).
CIGS, one alternative to the dominant silicon solar cell, is fast becoming a substantial piece of the fast-growing solar business. Solar industry research firm Prometheus Institute for Sustainable Development estimates that thin film technology could represent 20-30 percent of solar cell production by 2010.
Nanosolar, a well financed start-up from Silicon Valley, started shipping its CIGS solar cells late last year and they will be used in a solar power park in Germany.
Nanosolar and Solyndra, another CIGS challenger, are said to be looking to raise significant amounts of money as well at very high valuations, according to rumors. One of the largest venture investments last year was another CIGS producer, Heliovolt.
"It used to be that CIGS technology was the next hope for thin-film PV (photovoltaics), but that point has been reached by Global Solar," Gering said, adding that others will reach that point.
Gering discounted the progress of his competitors. That's not surprising, given that he is trying to raise money, but the company has been manufacturing for a few years already and all of its production for 2008 is already sold.
Until now, the company has sold its cells for use in portable, flexible solar chargers for military use or to charge consumer electronics.
But he said a bigger growth opportunity is in solar panels and building-integrated PV, where cells are baked into roofs or siding. To expand, it needs more capital to build a 40-megawatt plant in Tucson and a 35-megawatt plant in Berlin, Gering said.
In addition, Global Solar claims to hold the CIGS efficiency crown for converting light to electricity.
The company's products can now convert 10 percent of sunlight to electricity and the company claims it will get to 13 or 14 percent.
For comparison, the most efficient silicon solar cells are in the 20 percent range.
Meanwhile, Nanosolar CEO Martin Roscheisen disclosed that his company's cells operate in the "9 to 10 percent range."
He, too, spoke at the Piper Jaffray conference, where he said that the company expects it can reach 15 percent efficiency ultimately.
"Our entire strategy is not based on delivering the most efficient panels. It's to deliver the most cost-efficient panels," he said.
Roscheisen said the installed cost of the panels at the planned East German plant will be about $3 per watt.
He added that the company expects it can make the entire system cost lower than stock market high-flier First Solar, which is considered the most cost-effective on the market today.
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