Who Will Crack the CIGS Nut in Thin Film?

I've been saying for a while, that with enough money, someone is bound to crack the CIGS nut in thin film, and deliver the cleantech sector another First Solar (FSLR) like renaissance for the always around the corner technology.

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 seductiveness, 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 dating rules of the road 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 its 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 (HMC), IBM (IBM), DayStar (DSTI), Ascent Solar (ASTI), 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. Its 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 (the company is working on the scale up to 30 MW plants) it does have the massive advantage of having run virtually the only operating CIGS pilot plant in the world - and I believe has 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 (SGFRF.PK) 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 acheived 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.

Comments

[Zenfar]

Great article. So ASTI and Global have a shared heritage? Do you think ASTI will receive a halo effect when Global or other CIGS companies IPO?

Long ASTI

[User 56560]

i'm stupid... what is CIGS ?

[paulk8756]

Sounds alot like nuclear fusion to me. Hopefully, closer.

[steve pluvia]

Neil, good article; you are perhaps the first seekingalpha poster who actually knows the renewable business [unlike many here who make the fatal mistake of trying to base investment decisions on eps that are rapidly evolving due to advent of more cost competitive tech -- sorry Jack that means you =)].

We have evaluated all of the CIGS players and came to very similar conclusions; we're long development co ASTI [because its the only public CIGS pure play + quality mgnt + depth of experience] but would buy Global Solar if it were public. As you noted in earlier articles, Global operated their pilot plant for 3 years before effectively 'perfecting' their production line.

While many dispute Nanosolar's claims, they have installed a 1mw solar farm [germany] using their product which is the largest CIGS install in the world. Definitely worth watching, and should they become public forcing them to demonstrate their claims, they could be a world beater.

Steve Pluvia

[Jim Brown]

Thanks Neal. So the ten+ PV companies traded on US markets who already are producing 200MW to 600MW to meet sales for 2008 are way ahead of the curve, though new technology may provide real competition at some point. Some "old" PV guys are getting up to 23% conversion rates, and expect to have 600MW to 2GW production by end of 2009. How long will it take for Intel, HP, IBM et al to buy, set up suppliers, hire and train staff and develop proven QC to produce sales info etc? The same 2 to 5 years?

[BOBBY CURTO]

What is CIGS ?
Go on Google
Type CIGS
You will get 2 million hits.

Bobby

[BOBBY CURTO]

What is CIGS ?
Go on Google
Type CIGS
You will get 2 million hits.

Bobby

[Aalan]

It would have been nice if the title acronym had been explained-- obviously a lot of readers don't know it.
Other than that--thanks for an informative update.

[Alex_G]

Bobby,

Panels that harvest energy with CIGS (copper indium gallium selenide) cost far less to make and install, say backers. The material can be sprayed onto foil, plastic or glass or incorporated into cement and other building materials. Conceivably, the entire exterior of a house or building could become a solar generator.

[Toxicdave]

Copper Indium Gallium DiSelenide - instead of Si

[steve pluvia]

Alex G: CIGS, like all PV, must be encapsulated to avoid oxidation. You cannot "spray" it on cement etc and magically generate electricity.

CIGS, like all PV must be constructed in a "clean room" like a giant semiconductor. CIGS can use flexible backing and encapsulation that reduces weight, reduces transport costs and provides more options for building integration during construction. The primary advantage of CIGS is the ability to manufacture much more rapidly and at a lower cost than traditional PV -- known as "crystalline PV" or c-Si.

Hope that helps

Steve P

[DonSuper]

Good article...I just would like to point out that not because you throw money at something, the problem will be solved...

If I remember correctly, Ford spent north of one billion dollars researching battery technology based in a Sulfur chemistry, and they might as well have flushed the money down the toilet...

[peacesolarnow]

This is by far one of the most cogent pieces on the challenges of CIGS. But Global Solar is not one I would pick given their arduous vapor deposition approach. The challenges of CIGS of enormous given that this is atomic level technology and the requirements to control those atoms over large areas of manufacturing surface. Add packaging issues around moisture intolerance and you 5+ years to commercial product is probably conservative. Clearly the investment community underestimated the challenges. This is not about putting 50 software developers in a room to create the next variant of Facebook . . . . ..