Gliding noiselessly up to the 62nd floor of its Shanghai office, located in the heart of the citys wealthiest area, we arrived at the doors of one of photovoltaics biggest names: Suntech. Located opposite Chanel, and framed with floor-to-ceiling windows, the space offered up panoramic views across the city which, at that particular point in time, looked eerily like a science fiction film backdrop; a mixture of fog and smog shrouding the über-modern skyscrapers, labyrinth of buildings and ant-like people below us.
Having been directed to the conference room, we came face to face with Shi Zhengrong: founder and CEO of Suntech; one of Chinas wealthiest inhabitants. An energetic man, and eyes full of sparkle, he launched into the companys history, which although well-known, is nonetheless impressive.
However, we were not there to hear the rags to riches fairytale, but rather to discover just what exactly Suntech got up to behind closed doors. Indeed, with one of photovoltaics largest research and development teams, and impressive bankability, how does Suntech view the industry? And what does it envisage the future holds, both in terms of market trends and new technology? It was time to discover the nitty gritty.
Thin film plans
A pertinent topic, since Suntech ceased production on its silicon thin film solar module line back in August, the question was raised of whether the company was still interested in thin film – in particular crystalline silicon on glass – and if it had plans to recommence operations in the future. Thats why we acquired CSG Solar last year, stated Shi. He said it was a focus area, but there were issues which still needed to be resolved. He continued, First Solar already did an excellent job on thin film in terms of efficiency and manufacturing cost, but with First Solar theres also the problem with the sustainability of the materials theyre using. So for silicon, we still need to solve several problems: efficiency – this has to be way above 12 percent, especially as crystalline silicon costs are coming down continuously; investment – capital expenditure has to come down; and manufacturing costs – for any new thin film technology, it has to be able to compete with First Solar and crystalline silicon.
Stuart Wenham, Suntechs chief technology officer and renowned scientist at the University of New South Wales (UNSW) in Australia, expanded on the subject during a presentation at the companys global headquarters, Wuxi, which is located roughly two hours outside of Shanghai and adorned, rather strikingly, with the worlds largest solar facade. An equally charismatic and enthusiastic character, he explained that thin film is an important application for the company, especially when it comes to architecture. We cant rely on glass manufacturers to develop this – architecture alone is not going to make it happen. It has to be companies like us. We are pioneers, we have the vision and we are putting in investment. We even lose money, but we want to develop this application and this market. However, he reiterated Shis sentiments when it came to efficiencies. The time is not right for thin film. It really has to get up to round about 15 percent to compete with crystalline silicon.
Currently, Suntech says it has got its thin film crystalline silicon efficiencies up to about 10 percent through its work at CSG Solar, an Australian company, which set up manufacturing in Germany. Wenham believes there is a lot of potential, but that it is not yet ready for deployment.
Chasing commercial dreams
Overall, Suntech works on the three thin film types at an R&D level – crystalline silicon on glass via CSG Solar, and amorphous silicon and micro crystalline silicon at its Shanghai manufacturing facility. Commercially, though, the focus is mainly on amorphous silicon. Having bought the technology from Applied Materials, the company has been able to turn amorphous into a useful technology, which is frequently applied to its building integrated photovoltaics (BIPV) activities, particularly in Japan through Suntech Power Japan (formerly MSK). Suntech did, at one point, put its amorphous silicon into commercial production, when the cost of silicon significantly increased. Wenham explained, I said I didnt think the time was right for thin film. Then what happened, just to prove me wrong, is that the price of silicon went up by about a factor of five on the spot market. This, he said, gave thin film a window of opportunity to get established commercially. But since that time, the shortage of silicon has dissipated, prices have come down drastically – and will continue to come down – and that window of opportunity is no longer there.
One of the most exciting advancements the company has made, according to Suntech, is the development of its Pluto technology. Reportedly delivering a 10 to 15 percent performance advantage, due to low reflectivity and reduced shading through the use of thinner metal lines, Pluto solar cells are based on the PERL, or passivated emitter with rear locally diffused technology. As such, they use the same materials, wafers and module line equipment as a standard cell. The difference, therefore, currently lies in the plating of the metals. In mass production, the technology has already been independently verified to reach efficiencies of greater than 19 percent: ultimately they are expected to hit between 22 and 23 percent.
In terms of Pluto implementation, the company intends to go through three phases, the first of which is already in commission, with 450 megawatts of cell production having been reached in the middle of this year. The current problem is module encapsulation. The module encapsulation at the moment is only working at about six megawatts per month – just under 100 megawatts a year, explained Wenham. He went on to say there are two encapsulation options available. The first uses conventional encapsulation, which could be implemented immediately and would allow the company to scale up production. However, because Pluto has a much better response to all wavelengths of light than conventional solar cells, Suntech has taken a more unconventional route, which looks at interconnection. The alternative approach – which we have implemented in production at the moment – is a Pluto technology that has all these fine metal lines very closely spaced to each other to make the cell interconnect. Its a good way of doing it, provided you do the interconnect in the right sort of way. Suntech is confident the production equipment problem will fixed later this year, with the full half gigawatt of Pluto production operational by 2011.
Stage one of Pluto implementation only looks at the front surface design of the solar cell: the back is left as a standard screen printed aluminum back surface, which enables solar cell efficiencies of up to 19 to 19.5 percent. Subsequently, the next step is resurface design, which is now taking place in the labs. We already know is that thats going to take our efficiencies up to above 21 percent, said Wenham.
In terms of making the cells, Suntechs CTO said they dont cost any more than a standard screen printed solar cell. The equipment costs us more, so the depreciation costs will be higher, he explained. But we save just as much on the fact that we get rid of the silver metallization from the top surface, which screen printed solar cells are dependent upon. Instead, copper is used, which has its own conductivities, is much cheaper and requires lower temperatures. In fact, compared to screen printing technology, which requires the pastes to be heated up to over 700 degrees to turn them into copper metal, the copper lines in the Pluto plating process, which are around 20 25 microns wide and about 10 microns high, only need to be heated to around 350 370 degrees, in order for them to stick to the silicon. ?In the future, the back surface design will also be changed, and the screen printed metal will be replaced with a silicon nitride passivated layer. That will slightly increase the cost, but the actual cost per watt goes down, because we generate so much more power in the cell.
Suntech intends to introduce the new back surface in two stages: the first is to fix up the rear surface passivation, while the second involves hydrogenation processes, which the company says have very significantly improved wafer quality. Wenham explained the team discovered it could turn conversion grade silicon into semiconductor grade silicon material in the lab. This was achieved by using hydrogen, which bonds to the defects and deactivates them, so they no longer create recombination processes. However, implementing hydrogenation into the solar cell process has proved challenging, since once the defects are deactivated, the wafer cannot be heated up anymore. Therefore, it is being introduced as a separate step. What was also interesting, he said, is that through development of Pluto, the R&D team found that the technology performed particularly well with multicrystalline silicon wafers. As a result, Pluto has been specifically developed to work with it.
While the company did not go into further details as to what each of the second and third phases of Pluto would specifically involve, it did say Pluto two solar cells will achieve an efficiency of 21 percent, and Pluto three, between 22 and 23 percent. Additionally, Pluto two is ready to go into pilot production now: it is expected that within 12 months it will be in full pilot production evaluation of the technology, with hopes for full scale production six to 12 months after that. Pluto three, on the other hand, should be in pilot production in one to one and a half years time.
With such a large research team, surely Suntech is working in other areas of technological development? Wenham explained that the company is doing a lot of work with third generation technology, in conjunction with the UNSW and Swinburne University, particularly in the area of nanoplasmonics. Thats a term youll hear a lot more about, he said. The general idea of Nanoplasmonics is based on taking the companys current 25 percent world record efficiency solar cell and shining the ideal wavelength of light (infrared) onto it. When the right wavelengths are achieved, the cell can reach efficiencies of over 50 percent. Furthermore, a coating is applied to the top surface of the solar cell, which absorbs the light and reradiates it in a form better suited to the cell. Youre not actually changing the theory of how a solar operates, youre actually changing the spectrum of the light coming into the solar cell, stated Wenham. Its an interesting area and it looks like well make some good advancements, maybe in less than ten years. If effective, efficiencies of up to 26 percent could be achieved. This is not significant, but it will help economically, and the cost per watt will come down. My personal belief though, he said, is that silicon is going to be very hard to beat.
In that case, does Suntech intend to manufacture its own silicon? Apparently, the company has had plans along those lines for many years. The problem until now, however, has been the fact that it was in a non-compete clause with MEMC, which limited its activities. Were no longer bound by that clause, so we now have complete freedom to do what we think is sensible, said Wenham. Its not appropriate for me to go making any public announcements – Dr. Shi will do that when hes ready – but Suntech has certainly been doing a lot of work on its own R&D in terms of preparation for possible vertical integration, and you may well be hearing announcements in the future about that. He hinted the news would probably come from Shi, through earnings announcements.
China taking R&D initiative
When asked how he views R&D spending across the world, Wenham said he believed Europe was currently carrying out the best research, particularly due to the level of funding available. He warned though, that European companies need capitalize on European developments, because the Chinese companies are currently doing the best job of looking around the world and identifying the best technologies. Yinglis technology, for instance, was developed in the Netherlands, with EU funding, yet the only place its being manufactured is in China. Not only do the Chinese have lower cost manufacturing, but theyre also getting the best technology.
What is the situation like in China then, and why do companies have to look abroad? In China, there is good R&D, but a lot of its being done within the companies, Wenham explained. To date, I havent seen the R&D being done as effectively in China. Again, that could change. The Chinese Government, I think, is now starting to take photovoltaics far more seriously and is likely to put more funding not just into the use of photovoltaics, but also into the R&D side of things. One thing I can say for sure is that China is producing some of the best researchers in the world – its just that theyre tending to disappear overseas. In the case of Suntech, the Chinese Government head-hunted Shi and brought him back to China to set up the company. That was actually a government initiative. He probably wouldnt have done that if he hadnt had that motivation.
Looking towards the future, consolidation was highlighted as a future trend the industry can increasingly expect to see. It doesnt make sense for there to be the massive number of independent manufacturers. There are a lot of new players and big companies like Samsung and Hunyadi Heavy Industries they see it as being a very serious industry for the future that they need to be part of. The industry is not experiencing consolidation at the moment, he added, because China is providing so many low cost opportunities for manufacturers. However, in five to ten years, both he and Shi dont believe the country will be any more cost competitive than others, and then it will simply be a matter of whos got the best technology.
Tying in with this, Shi said that he sees production moving closer to the end market, something which Bank Sarasin also confirmed to pv magazine. However, looking at pv magazines PV poll of the week, voters seem divided on the issue, with 37.9 percent agreeing, in comparison to the 34.5 percent who dont.
Regardless, Suntech has already begun moving production, having opened its first U.S. manufacturing facility in Goodyear, Arizona, in October. Hinting at the possibility of a European manufacturing base, Shi added that in China a manufacturer can scale-up very quickly, and Suntech wants to see how it works in Europe and North America. We have a team looking at this now, he said.
The two day fact finding mission into Suntechs world threw up a lot of information, in terms of the issues important to the company and the areas of research it is focused on. Additionally, an insight was gained into the future trends it envisages. Finally though, while it is very much the international company, how important is its home market and how does it see the country developing its photovoltaics industry? Shi explained that last year, around 300 megawatts of photovoltaics was installed in China: this number rose to around 500 megawatts this year, despite not having a national subsidized incentive scheme. He said that the country will reach a gigawatt or more of installed capacity within the next few years and the BIPV market is also quite good.
He said, however, that while there is the belief that human labor is cheap in China, the situation is changing and it is getting tough to find. Many companies like ourselves couldnt get enough labor here, he said. I think automation becomes increasingly important. I think labor, from a cost point of view is a component, but it is not major theres a whole supply chain of materials, including raw materials which is cheaper in China. All together, it gives a cost advantage.
He finished by saying that although there is uncertainty next year, Suntech is still optimistic about the German market. Its all a matter of return on investment, said Shi. The tariffs are coming down, but if module prices also come down, and if an investor can get between seven and eight percent internal rate of return – I think that is a benchmark now in Germany – people are still willing to do it. But, displaying all the signs of Shis mantra to always keep looking for a new challenge, he stated more importantly, other markets are growing very fast, including the rest of Europe, Africa, Asia and the U.S.