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Solar Power: Getting Down To Business

Already the darling of venture capitalists, the solar energy market has now attracted the attentions of the semiconductor community's biggest equipment supplier. Michael Hatcher finds out exactly where the opportunity for compound semiconductors lies in a sector that is virtually monopolized by silicon.

When Applied Materials launches a corporate strategy to target a new application area, you know that it must be something big – really big. The Californian equipment vendor has more employees than this magazine has subscribers (9314) and with an annual turnover of $7 billion, any market has to have massive financial potential for it to take a serious interest.

So last September, when Applied Materials launched its strategy to reduce the cost per watt of solar power during the 21st European Photovoltaic Solar Energy Conference, the event marked one of the most significant points in the evolution of the industry.

According to Applied Materials, the overall market for solar equipment is expected to soar from approximately $1 billion in 2006 to more than $3 billion in 2010. During that time, the technology is expected to move through a major transition, gear-shifting up from small-scale generators of 20–40 MW to sophisticated gigawatt-rated power stations capable of supporting much larger communities.

Of course, Applied Materials is focused squarely on the largest slice of the solar energy business – that which is powered by silicon semiconductors – and will supply PVD/CVD, plasma-enhanced CVD and sputtering equipment to cell manufacturers. But the company s timing is prescient and is important for the compounds sector too. Whether you measure revenue, company profits or generated power, this market is booming. High-profile Wall Street investment banker J Peter Lynch sums it up like this: "Photovoltaics is already the fastest growing industry in the world."

In their most recent annual report, market analysts at Photon Consulting measured global solar power production at 1.7 GW for 2005, barely a blip (less than 0.01%) on the scale of total global power demand – but still a big hike on the 2004 figure of 1.2 GW. In 2006, that number is expected to be 2.4 GW, representing year-on-year growth of nearly 50% (see figure 1).

"Initially, this 40 to 50% annual expansion of production raised concerns that a glut might reduce prices and margins," said Michael Rogol, lead author of the Photon Consulting analysis. "However, interviews with 400-plus solar power executives and policy makers...have fortified our conviction that demand will significantly exceed supply through the end of the decade and that prices are likely to remain high."
According to figures published by the Organization for Economic Co-operation and Development the original forecast for solar energy production in 2005 had to be revised upwards by 60% and this over-achievement is what caused the current shortage – and resulting high price – of the silicon used in most solar cells.

This supply and demand problem is where the market opportunity for concentrator systems based on compound materials really starts to emerge. Put simply, there is not sufficient crystalline silicon feedstock to meet the unexpectedly rapid ramp in demand, despite the fact that production of the high-purity material required is expected to rise from 32,000 t last year to more than 85,000 t in 2010 (figures from Photon Consulting). The upsurge in demand for solar power will far outstrip that increase.

By the end of the decade, predicts Rogol, solar power generation will have hit the 10 GW mark. The disparity between this increase and the available crystalline silicon suggests that a substantial, widening gap in the market will exist for other technologies. At the moment, these only account for 9% of solar power generation, or 0.15 GW. In 2010, however, the proportion of solar power that comes from non-silicon technologies will grow to 20%, standing at approximately 2 GW.

Concentrator technology featuring III-V cells will share this sub-sector of the wider market along with cadmium telluride, copper indium gallium selenide, amorphous silicon and non-semiconductor approaches, so the big question for the likes of Emcore, Spectrolab and Sharp is just how much market share can their multijunction technology grab? At the moment, they are confident that it will be a lot.

The key advantage that concentrators have is the ability to dramatically reduce the cost of every watt generated by solar power – despite the relatively high expense of the individual cells. Emcore s Earl Fuller puts it like this: "[It s] the largest knob available for making expensive solar cells less expensive."

Speaking late last year, Hojun Yoon from Spectrolab neatly illustrated the scalability of multi-junction concentrator technology. If a football field was completely covered in 17% efficient silicon solar cells, he said, it would produce around 500 kW. The same area of multi-junction cells under a concentration of 500 suns would increase that figure by a factor of a thousand to 500 MW – a power output that is far higher than even the very biggest solar installations currently operating.

Critical element

Of course, the cell is just one element – albeit the most critical one – in any solar power generator. A major reason why solar power development has not been even more prolific is because the added costs of each module and system are relatively high, when compared with the relatively small number of watts generated (see figure 2). All of the glass, metal and plastic components that are needed to make up the so-called "balance of system" add to this cost. The best way to offset the cost is to use the highest efficiency cells available so that each watt produced costs less to convert.

So a critical target to reduce conversion cost has been to get the conversion efficiency of the bare cell up into the 40–50% range. Working with the US Department of Energy, Spectrolab has now reached 40.7%, a figure ratified by the National Renewable Energy Laboratory. Fuller says that Emcore will also breach the 40% mark in 2007, while Yoon reckons that 45% is achievable by 2010, assuming that the current average annual increase of around 1% is maintained. As the technology improves, the downward pressure on the key $/kWhr metric is dramatic (see figure 3).
At its Albuquerque, NM, facility, Emcore has eight MOCVD reactors ready to churn out solar cells on 4 inch germanium, equivalent to an annual terrestrial power generation capacity of 50 MW. The company s ultimate goal is to get the cost of a solar power plant down to just $2/W (Photon Consulting estimates the current average module price to be $4/W and full installation at $8/W) and drive generating costs after installation to below $0.1/kWhr. But exactly where will these systems be deployed?

According to Fuller, off-grid village power and grid-connected large-scale solar farms – expected to be worth 16% of a $1 billion market by 2010 (or about 80 MW of demand) – will be the key applications that deliver III-V solar its initial foothold in the market.

Just across the street from Emcore s Albuquerque fab is Sandia National Laboratories, with which Emcore is collaborating on module and system development. Achieving higher conversion efficiencies will require new cells with even more junctions and that will mean some very complex material deposition, possibly through the integration of InGaN-based alloys to improve short-wavelength conversion.

Like Fuller, Yoon sees a major opportunity in village and grid-connected utility-scale power production, but he adds another, potentially very lucrative, possibility – rooftop power. For rooftop applications, different concentrator designs would be required, but the rewards for penetrating this higher-volume application successfully could be huge. Rather than powering individual houses, where cost and installation difficulties would be prohibitive when compared with silicon technology, he thinks that concentrator systems could power large apartment blocks housing perhaps a few hundred residents. In Japan, Sharp and Daido Steel have already demonstrated such a prototype system that produces 3 kW at a 500-sun concentration.

Although the market value for solar power systems is set to rocket, the rewards may not be felt quite so strongly by epitaxy equipment manufacturers. Yoon says that Spectrolab could already make enough cells to generate 200 MW using half of its existing capacity.
A dramatic shift?

Wherever they end up being deployed, there is little doubt that III-V cells will have an increasing impact on terrestrial solar power generation. Recent supply deals such as the order for half a million Spectrolab cells for use in an Australian power station have demonstrated an initial acceptance of the technology. More should be forthcoming: Emcore s late-2006 strategic investment in WorldWater and Power includes provision for a major supply deal that could dwarf anything seen so far. In Spain, solar system maker Isofoton has agreed a collaboration with local energy company ENDESA that includes the demonstration of GaAs-based concentrator systems for future deployment. And California s SolFocus, recently showered with venture funds, says that concentrator cells are the practical solution to the silicon shortage.

As Fuller pointed out, there has already been a dramatic technological shift in satellite power supplies from silicon to III-V cells. "In the mid-1990s, 80% of satellite power was generated by silicon solar cells," he said. "Today, 80% of satellite solar power is generated by III-V multi-junction cells."

Fuller also posed the unanswerable question: "Can III-V s prominent position in the space power market result in the same market diffusion [on Earth]?" Perhaps. But, given the greater number of rival technologies, allied to the fervent, perhaps fleeting, financial interest in solar energy, perhaps not. Even so, with high oil prices and worries over global warming set to continue there will likely be a very large pie available – and even a small slice of that could mean big wins for compound semiconductors.

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