The Walmart-ization of Thin Film Solar?
Walmart is a name synonymous with affordable, or perhaps even cheap. The same cannot be said today for thin-film CIGS solar modules. CIGS stands for copper indium gallium selenide, the ingredients of what promises to be the only thin film technology that can compete with crystalline silicon on solar efficiency.
In an interesting development, Walmart said yesterday that it would work with SolarCity to put CIGS (and thin-film cadmium telluride) on roofs of dozens of stores in California and Arizona. That means a very mainstream company will be getting renewable energy from a non-mainstream source of solar power. The announcement is also an opportunity to check in to see how CIGS is doing in general.
When I spoke with analysts who cover the market for various forms of solar, I learned that Walmart's business is the best news that has come along for CIGS in quite a while. "The rapid price declines for crystalline modules has really hurt thin film, especially with low-cost Chinese manufacturing coming on-line," says Jason Eckstein, solar analyst at Lux Research. In addition to the stiff competition from traditional technology, CIGS have struggled to increase capacity because, as the name implies, it's a complicated technology to manufacture.
Paul Markowitz, an analyst at NanoMarkets, agrees that the last few years have been tough on CIGS makers. "We know it has struggled for a long time. A lot has been because of the timing of the economic downturn. Though many of the companies wouldn’t have succeeded even in a good economy, a lot were poised to go into production but then the bottom dropped out of the market." Ouch.
Miasolé, a start-up CIGS manufacturer, will be the company benefiting from Walmart's walk on the solar wild side. SolarCity confirmed that it would be the CIGS supplier for the Walmart project, along with First Solar which will provide cadmium telluride thin film. First Solar has been, by far,the most successful thin film solar manufacturer. With its low cost of production and popular product it has about 12% of the solar market today, according to Lux Research.
Analysts are keeping an eye out for an IPO filing from Miasolé, which is expected to happen in 2011. The company has told investors that it will be able to make a 13% efficient cell for 79 cents a watt, says Eckstein. He's confident Miasolé can reach the $1 per watt threshold, but it's "unclear if they can really hit those promised targets in cost and efficiency."
There are also reports that Miasolé is in the process of raising $100 million in an F round (by my count that would make it the fifth time its asking investors to kick in funds). If so, the timing of the Walmart deal may not be a coincidence.
Walmart's backing can only help the CIGS cause, says Markowitz. "Walmart getting into it will help to give CIGS some bankability, in convincing the establishment, banks, and potential users that it’s a real technology that’s worth the money. This will help to bring CIGS more into the mainstream and make it easier for other users to eventually get financing."