New Solar Technologies Fueled by Hot Markets

The booming solar-cell industry is driving investment in newer technologies that could make solar power as cheap as electricity from the grid.

The announcement last month that Palo Alto, CA-based Nanosolar had raised $100 million to finance a new solar-cell factory based on an inexpensive process, similar to that used to print newspapers, and that it will make enough cells to produce 430 megawatts of power annually, is just one sign that new types of solar power are emerging as a viable alternative energy source (see "Large-Scale, Cheap Solar Electricity").

While Nanosolar's new factory capacity, equivalent to one-quarter of the total global solar capacity last year, is unprecedented for a new technology, it's just part of equally impressive overall growth in the solar industry. For the last several years, solar cell production has been doubling every two years, and indicators suggest this will not slow soon, says industry analyst Michael Rogol, managing director of Photon Consulting in Aachen, Germany.

Indeed, demand for solar power -- fed by rising energy prices, supportive government policies, and a solar industry suddenly with enough revenue to support new marketing campaigns, has outpaced the ability of manufacturers to produce conventional crystalline silicon solar cells, Rogol says. He estimates that demand for solar at current prices is around double the expected production capacity this year.

Even more encouraging to some solar advocates, though, is that high profits have attracted new investors to innovative companies, like Nanosolar, which has Google's cofounders Larry Page and Sergey Brin among its backers. At least 50 companies are developing unconventional solar cell technologies, according to Rogol. And, he says, "most of them are planning pretty significant expansions of production."

These companies are making solar cells based on second-generation technologies, many of which were discovered decades ago, but have taken years to develop to the point where they can convert light into electricity efficiently and be manufactured reliably. Such new technologies include dye-sensitized solar cells, non-crystalline silicon cells, cells based on organic materials, and thin-film solar cells using inorganic semiconductors made of elements such as cadmium and tellurium or, in the case of Nanosolar and many others, copper, indium, gallium, and selenium (CIGS).

Although new technologies are potentially cheaper than conventional solar cells, crystalline silicon won't disappear any time soon as the key technology in photovoltaics. By far, it's still the dominant type of solar cell, and its production costs are declining steadily, at a rate of seven to ten percent per year, Rogol says. What's more, companies with newer technologies face a challenge in ramping up production. If the past is a guide, he says, Nanosolar and other companies at similar stages of development could spend 10 years working out the details of large-scale production.