Market LandscapeAn overview of the solar PV market landscape, recognized trends, and anticipated outcomes will be a recurring theme in the Update. The introductory brief below focuses more intently on the U.S. PV situ-ation, one of the more dynamic, fastest growing market environments in the world. Data and analysis surrounding the international market for photovoltaics will be provided in the next edition, including reflections on deployment, cost, and incentive issues.

U.S. PV Market Landscape: A 2011 Retrospective and OutlookThe changing dynamics of the solar PV marketplace bear watching to discern opportunities, risk factors, and economic trends associated with current and future project investment in the United States. In 2011, the U.S. solar market continued its torrid pace, driven in part by plummeting PV system component priceswhich translated to a 20% drop in overall system prices1and the end-of-year expiration of the DOEs Section 1603 Grant in Lieu of Tax Credit, among other solar power incentives. Moreover, improved installation efficiency and a continued shift toward larger systems produced economy-of-scale savings that helped fuel more than double year-over-year growth.

According to GTM Research and the Solar Energy Industries Association (SEIA), approximately 1.86 GW of solar PV capacity was installed in the United States in 2011755 MW in the fourth quarter alone (double Q4 2010)representing a 109% increase from 2010s 887 MW of additions (see Figure 1). Meanwhile, broken down by market segment, utility-driven growth (via PPA and asset ownership) grew 185% from 2010, reaching 758 MW in capacity additions in 2011, com-pared with ~800 MW installed in the commercial sector, and 297 MW in the residential sector. The movement toward greater utility installations is part of a multi-year trend in which the share of new PV capacity from residential systems has lessened with steady improvement in larger-scale solar project economics (see Figure 2). As a point of reference, 28 PV projects sized 10 MW and greater were installed in 2011, compared with just two in 2009 and eight in 2010. All told, 2011

WelcomeWelcome to the inaugural edition of the EPRI Solar PV Market Update. This quarterly document is intended to provide a snapshot of PV market information, alongside brief EPRI analysis, to inform EPRI members about economic, policy, and technology-related developments in the segment. It synthesizes data reporting gleaned from a variety of primary and secondary sources, highlight-ing specific industry issuesincluding market outlooks, equipment cost and pricing trends, system design and efficiency advances, and changes in the incentive landscapethat are likely to impact utility solar PV investment and planning efforts. At bottom, the EPRI Solar PV Market Update is intended to serve as a utility crib sheet for staying abreast of the sectors vitality.

Please let us know how we can improve upon this Update. Send us your comments and suggestions for future content coverage.

Sincerely,

The EPRI Solar Generation (Program 84) and Integration of Distributed Renewables (Program 174) Teams

Solar PV Market UpdateMay 2012 Volume 1: Spring

1 Based on a weighted average of PV system prices.

Figure 1. Breakdown of U.S. PV Installations, 2010 and 2011

Source: GTM Research and SEIA

Table of ContentsU.S. PV Market Landscape: A 2011 Retrospective and Outlook 1

Solar Cost & Pricing Snapshot: Trends in PV, CPV, and CSP 4

Advances in PV Cell & Panel Efficien-cies: Positive Long-term Implications Amid Pressure to Meet Short-term Expectations 6

Technology Spotlight: tenKsolar 10

Solar PV Market Update Vol. 1 2 May 2012

additions totaled 61,000 individual PV sys-tems, pushing cumulative U.S. installations to roughly 3.95 GW (214,000 systems).

Among commercial PV technologies, crystal-line silicon-based modules expanded market share to 89-92% in 2011 on the back of falling silicon commodity prices that helped diminish their pricing differential with thin films.2 The crash in polysilicon spot prices from a high of $450-500/kg in 2008 to roughly $27/kg at end-2011,3 coupled with across-the-board effi-ciency premiums afforded to c-Si products over thin films, reinforced a market environment tilted toward conventional silicon-based sys-tems, and particularly those produced in China. Approaching $1/W, c-Si-based modules virtu-ally erased a 50% dollar-per-Watt cost differen-tial with thin film products (i.e., First Solar) in 2011. As a result, Chinese Tier-1 c-Si modules reportedly cut the cost gap with thin films to less than $0.10/W and are predicted to close the cost disparity further throughout 2012.

Key Takeaways from 20111. U.S. market share went up and looks likely

to continue to go up. Record U.S. PV instal-lations in 2011, following on the heels of previously record installations in 2010, has resulted in an expanding domestic share of

the global market. Solar installations in the U.S. more than doubled in each of the past two years, increasing the countrys market share by 2%to 7% of the worlds installed capacity in 2011, up from 5% in 2010sig-naling a steady shift in focus by developers away from strong European markets pro-pelled, until recently, by healthy feed-in tariff rates, and toward the United States.

2. Both policy and policy uncertainty signifi-cantly moved the U.S. market. At the end of 2011, the looming expiration of the Section 1603 Treasury Program and ambiguity about its potential extension motivated installers to complete a record number of projects in 4Q11roughly 776 MW of new PV addi-tions, up 115% over the same period in 2010 (see Figure 1).4 The mad dash to complete projects is a reflection of expected challenges in the 2012 project financing environment (which more heavily rely on the 30% Invest-ment Tax Credit [ITC] and private equity financing).

3. Go big or go home. An increasing number of utility-scale PV projects were installed in 2011, part of a three year trend. Endowed with healthy balance sheets, and prompted by regulatory mandates along with favorable economics, utilities became a growing cus-tomer of PV projects. This situation perhaps

presages a future U.S. marketplace domi-nated by utility activity.

4. Historically differentiated prices for PV products became a relic of the past. General module oversupply and the marching advance of Chinese manufacturers caused rapid decreases in c-Si module costs and, in turn, system prices that considerably nar-rowed the pricing advantage historically granted to thin films. The partial result: an emerging market perception of PV as a com-modity good and the PV segments conse-quent recognition for the need to emphasize product differentiation.

5. Solar became more politicized than ever. The highly publicized bankruptcy of cylin-drical CIGS panel manufacturer Solyndra in late 2011, and its connection to the federal loan guarantee program, created a political divide at the national level. In a looming U.S. presidential election year, political parti-sanship and discussion surrounding govern-ments role in supporting the PV industry is likely to heat up and eventually impact future legislative actions.

A Look Ahead in the Short TermThe near future for the solar PV segment is anticipated to be a challenging one. The popu-lar narrative: a combination of oversupply and under-demand will conspire to force contin-uedand unsustainabledownward pricing pressure on panels and, in turn, usher in a period of consolidation, bankruptcies, and market correction. Indeed, fickle subsidy poli-cies in Europe, coupled with asymmetric com-petition/subsidies on the supply side from China have triggered a race-to-the-bottom in prices that is likely to carry on throughout 2012 and beyond. One potential result of this unhealthy pricing competition, accommo-dated by a shrinking number of major solar markets, is an expected upsurge in utility power purchase agreements (PPAs), many of which are likely to require a renegotiation of terms or lead to a relatively large false pipe-line of projects.

2 Thin films experienced continued absolute growth in new installations in 2011. However, the segments relative market share dropped.3 According to GTM Research, contract polysilicon pricing hit $42/kg at the end of 2011.4 Many developers also elected to safe-harbor their product in 2011, enabling projects completed after the December 31st, 2011 deadline to qualify for the 1603

program.

Figure 2. U.S. PV Installations by Market Segment, Q1 2011 Q4 2011

Source: GTM Research and SEIA

continued on page 3

Market Landscape

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Solar PV Market Update Vol. 1 3 May 2012

Market Landscape

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Market retrenchment is already beginning to have a tangible impact on an expanding number of companies within the solar segment (see Table 1). In addition to less established concerns, for-mer heavyweights like Q-Cells have declared bankruptcy, while SunPower and First Solar are closing, idling, or re-purposing entire manu-facturing facilities and production lines. A fur-ther winnowing of solar value chain is expected, with some less established companies likely to run out of cash before market demand rebounds and price expectations temper.

Average selling prices (ASPs) for PV modules have fallen some 46% in the past year and are not expected to stabilize in the short term as manufacturers attempt to sell off excess inven-tories in an effort to recalibrate market supply/demand. As a result, the national weighted-average installed system price in the U.S. declined by 20%, reaching $4.08/W at end-2011. For utility projects the average fell to $3.20/W in the same period.

Compounding the largely unchecked descent of PV pricing are natural gas prices that have plummeted by 52% in the past year. With gas futures now hovering at below $2 per million

British thermal units (MMBTU) on the New York Mercantile Exchange due to record U.S. inventory levels and robust production, addi-tional pressure is being placed on PV suppliers to further slash pricing and erode margins (potentially into negative territory). The wide-spread expectation that natural gas pricing will continue to fall to still lower depths not seen in nearly 15 years portrays an ominous picture in which PV technology prices are unlikely to sta-bilize any time soon.

The market realities in 2012 are manifesting themselves in arguably untenable bids for large projects. According to Navigant Consulting and confirmed by utility and EPC sources, PPA prices are being bid at rates as low as $0.06-0.08/kWh and averaging ~$0.11/kWh. But the eco-nomic rationale behind these bid prices is depen-dent upon artificially low module prices that will be unable to sustain a number of manufacturers, resulting in their insolvency. The upshot: the real prospect that numerous utility pipeline projects will not be built unless they are renegotiated at more realistic terms. A further concern: worsen-ing product quality due to actions taken (e.g., outsourcing to a variety of lower cost Asian man-ufacturers with questionable QA standards) to satisfy PV pricing pressures that, for example, could result in accelerated degradation rates that undermine project economics and rely on war-ranty arrangements for rectification. (Please see the below Update item for a more in-depth anal-ysis of solar technology costs and pricing.)

Looking ahead, 2012 will be a buyers market. In contrast to the turmoil within the PV value chain, utilities and other end-use purchasers are likely to reap the benefits of the solar pricing environment for the foreseeable future. Conse-quently, U.S. market forecasts are predominately bullish. For example, as depicted in Figure 3, Greentech Research/SEIA predict steadily rising annual new capacity additions that crest at 8

Company Recent Developments

Abound Solar Furloughed 180 employees and shut down production to retool equipment.

Evergreen Solar Filed for bankruptcy in 2011.

First SolarIndefinitely ceased operations at AZ production facility, idled 4 of 24 production lines in Malaysia, and closing a Frankfurt manufacturing facility. Upshot: headcount slashed by 2,000 positions ~30% of workforce.

Q-CellsFiled for bankruptcy in 2012. Over $1.1 billion evaporated in 2011. Parent company Solibros long-term prospects in question.

SolyndraCIGS module manufacturer filed for bankruptcy in September 2011, triggering a political backlash on the U.S. governments loan guarantee program.

Spectrawatt Filed for bankruptcy in 2011.

SunPower Plans to shutter 125-MW Fab 1 line in the Philippines.

Trony Solar a-Si manufacturer reportedly selling PV below cost into off-grid markets.

Uni-Solar Filed for bankruptcy in 2012.

Table 1. Market Correction Selected Outcomes

Figure 3. U.S. Share of Global PV Installations (Redrawn by EPRI)

Source: GTM Research and SEIA, redrawn by EPRI

continued on page 4

Solar PV Market Update Vol. 1 4 May 2012

Market Landscape

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GW in 2016 with the planned sunsetting of the ITC. In turn, U.S. PV market share is antici-pated to grow from 7% to 15% in the next five years, and, in the process, become a focal market, along with China, for near term development. Although factors such as the final outcome of the U.S.-Chinese trade petition and feed-in tariff dynamics in Germany and Italy will influence U.S. solar market activity in 2012, a strong proj-ect pipeline littered with utility-scale projects5 that have a high probability of obtaining financ-ing bodes well for market segment growth.

Key Takeaways in the Look Ahead1. Utilities will increasingly lead the way in

spurring new U.S. PV capacity additions. According to the Solar Electric Power Asso-ciation (SEPA), utility-driven procurement (PPA and asset ownership) represented 39% of new U.S. solar capacity in 2011, versus 9% in 2008. That percentage is predicted to climb in 2012 and beyond given healthy util-ity balance sheets, RPS-driven demand, resource portfolio diversity aims, falling ASPs, and economy-of-scale pricing benefits. Even considering attrition factors, the growth prospects of the U.S. utility segment are good: over 9 GW of projects have signed util-ity power purchase agreements (PPAs) and

await completion over the next five years, while over 3 GW of these projects have already been financed and are in construction.

2. PV pricing is not likely to rebound in 2012 given the widely mismatched supply/demand equation. According to Bloomberg New Energy Finance, solar factories are now capable of producing 38 GW of panel capac-ity, roughly 54% more than worldwide esti-mated demand in 2012. The reduced global market demand is largely due to a contrac-tion of traditionally strong European mar-kets that have rolled back feed-in tariff (FIT) incentives. As a result, artificially low PV prices will likely continue until supply can be recalibrated through the reduction of pro-duction output achieved, in part, via manu-facturer insolvency.

3. Falling natural gas prices will help force continued reduction in PV prices. PV man-ufacturers will be compelled to further slash PV prices in utility RFP bids, in part, to compete with natural gas prices that are approaching historic lows. This will be a tall order given the trajectory of natural gas price averages at the Henry Hub:6 January 2012 $2.67/MMBTU; February 2012 $2.51/MMBTU;

March 2012 $2.12/MMBTU; April (preliminary average) 2012 $2.02/

MMBTU.4. Growing PV installations will require U.S.

utilities to devise strategies for managing grid penetration that maintain overall network reliability. In 2011, utilities interconnected over 62,500 residential, commercial/indus-trial, and utility PV systemsa volume not previously experienced. Despite a changing incentive landscape and more challenging financing terms, PV interconnections and associated capacity additions in the U.S. are estimated to annually rise over the next five years, considerably increasing penetration lev-els on some circuits and, to a lesser extent, rais-ing national grid penetration levels to 2-3%.

5. The consolidating PV market in 2012 through 2014 will beget a new technology landscape. The thin film segment, once a ris-ing star in the solar industry, is likely to expe-rience a pronounced shakeout as CAPEX and LCOE cost competitiveness dwindles vis--vis c-Si offerings. Consolidation via merger and acquisition (M&A) activity is primed to occur particularly in the CIGS sec-tor, given the technologys upside potential and the low current valuations of effectively every CIGS company.

Cost CornerSolar Cost & Pricing Snapshot: Trends in PV, CPV, and CSPThe solar cost and pricing landscape has been particularly volatile over the last 12 months. The implications of these economic dynam-ics: greater PV project investment, at the expense of more capital intensive concentrat-ing solar power (CSP) projects and less proven concentrating PV (CPV) installa-tions. Table 2, on page 5, provides a compara-tive overview of solar-based generation options.

The Solar PV Economic LandscapeAlthough each solar technology has a particular market application niche for growth, plunging PV prices have, at least temporarily, made c-Si and thin film-based systems the utility solar investment of choice. Indeed, the hypercom-petitive market has driven down PPA bids to reported prices of $0.065-0.085/kWh in the latest California utilities RFP solicitations.7 These and other recent utility RFP responses follow a broad downward trajectory of identi-fied average utility installation price points that

have declined by ~20% since early 2011.8 In particular, according to GTM Research/SEIA, U.S. utility system prices reportedly declined for the seventh consecutive quarter in a row, dropping to $3.20/W in Q4 2011, largely as a result of an historic free-fall in global solar mod-ule average selling prices and associated econ-omy-of-scale benefits.

But a growing divergence between module ASPs and their production costs portrays an unsustainable market situation that will likely

continued on page 5

5 As of early 2012, over 9 GW of U.S. utility projects were under contract (PPAs signed) and over 32 GW of earlier-stage utility projects had been announced (pre-contract) that are actively seeking permits, interconnection agreements, PPAs, and financing.

6 Natural gas prices can be 2-4x Henry Hub prices by the time they reach end-users.7 Bids were submitted to Californias Renewable Auction Mechanism (RAM) for the 2015-17 timeframe.8 Based on weighted averages across residential, commercial/industrial, and utility system installations.

Solar PV Market Update Vol. 1 5 May 2012

Cost Corner

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culminate in contraction for less financially secure product manufacturers. Figures 4 and 5 illustrate current and estimated module ASPs and production costs for a small sample of thin film and polycrystalline PV compa-nies as well as a blended worldwide average. An observed narrowing of average selling prices and module productions costs has occurred over the past three years$0.37 in 2009, $0.32 in 2010, and $0.15 in 2011. And, in 2012, production costs are, in fact, estimated to be an average of $0.13 higher than ASPs. It remains to be seen whether the gap between selling price and production cost can be bridged before an outbreak of industry failures. Analysts project ASPs for Suntech, First Solar, Trina, and Yingli to reach ~$0.85/W by 2013, and for SunPower to sell at a higher price due to its module efficiency premium. Meanwhile, Chinese manufactur-

ers costs are anticipated to approach First Solars current production costs by 2013, fall-ing to $0.70 - $0.80/W.

Future editions of EPRIs PV Market Update will contain latest updates on module ASPs and production costs, PPA bid ranges, and additional economic data surrounding bal-

ance-of-plant equipment and grid integration costs. Stay tuned!

TechnologyWorldwide

Market Share*Efficiencya

Capacity Factor

Install Cost ($/kW)

Land Use Efficiency (Acres/MW)

Projected Near-Term Global Growth

CPV

Solar PV Market Update Vol. 1 6 May 2012

PV TECHNOLOGY DEVELOPMENTS

Advances in PV Cell & Panel Efficiencies: Positive Long-term Implications Amid Pressure to Meet Short-term ExpectationsAmid todays challenging solar market envi-ronment, PV supply chain manufacturers con-tinue to invest liberally in technology research and development (R&D) pursuits to improve upon product line price-per-Watt metrics that offer greater competitiveness while easing cur-rent tightness in profit and revenue margins. One outcome of these efforts is recent record-setting advances in PV cell and panel efficien-cies across nearly all solar material segmentsincluding crystalline silicon (c-Si), cadmium telluride (CdTe), copper indium gallium disel-enide (CIGS), and gallium arsenide (GaAs). Though not considered breakthroughs in innovation, industry stakeholders collectively view the incremental increases in cell and module performance as positive steps toward achieving longer-term technology roadmap objectives.

Attaining evolutionary increases in conversion efficiency is one of the major strategies PV man-ufacturers are employing to gradually reduce their per-Watt module prices and better com-pete in the global marketplace. As illustrated in Table 3which provides a snapshot of some of the latest PV efficiency developments, broken down by company and technology typeeffi-ciency improvements are being realized via a diversity of approaches for virtually every PV technology. For example, Suntechs Pluto cell features a unique texturing process that increases sunlight absorption in high- low-, and indirect-light conditions. Moreover the cells design and contact gridlines boost power out-put, reportedly delivering a 10-15% perfor-mance advantage using the same materials, wafers, and module line equipment as a stan-dard cell. Thin film PV cells are, meanwhile, predominately using direct bandgap semicon-ductors at layers that are roughly 100x thinner than current c-Si cells. Sustained R&D invest-ments are expected to continue the trend of

producing higher best-cell efficiencies that translate to lower priced, higher energy density commercial modules.

The extent that price-per-Watt cost reduc-tions can be obtained solely via efficiency gains is, however, capped and will lessen as single-junction PV technologies approach their maximum theoretical efficiency limits (a.k.a, Shockley-Queisser limit) for their respective semiconductor materials. Per Fig-ure 6 (on page 7), considerable potential for efficiency improvements exists for PV tech-nologies across the board. And, as shown in Table 4 (shown on page 8), projected PV module efficiencies over the next five years are expected to improve at varying rates that range between 1-3%.

Advances in thin film efficiencies are expected to outpace those accrued by crystalline silicon modules and, in turn, narrow the performance

CompanyPV Cell

EfficiencyHighlights

Crystalline Silicon (c-Si)

Suntech 20.3% The worlds largest producer of solar panels, with 2.4 GW of global capacity. Pluto cell technology efficiency gains achieved in Mar. 2012 on a production cell using commercial-grade p-type silicon wafers. 21% efficiency targeted by 2013. Incremental advancements encompass surface patterning, improved metallization and front metal contact dimensions, changes in dopant concentration at the emitter, and better high-temperature performance. Thus far, the higher efficiency, higher priced module not a big seller.

SunPower 24.0% Manufacturer of the highest commercial efficiency cells and modules for the last half-decade. Back-contact c-Si cell design, in commercial production since 2005, moves the metal contacts to the back of the wafer, maximizes the working cell area, and eliminates redundant wires. Consistent efficiency improvements obtained with each successive generation of commercialized cells, translating to gains in module output. Current commercial cell is now Gen 3.

Cadmium Telluride (CdTe)

First Solar 17.3% The largest PV module firm by market capitalization and global thin film leader (2.7 GW project pipeline). Hit a new world record for CdTe total area PV module efficiency of 14.4% in January 2012, approximately 6 mos. after achieving a 17.3% CdTe solar cell efficiency record at its Perrysburg, OH factory. Average module conversion efficiency improved by 0.6% in one year.

Abound Solar

12.2% (module)

The only other CdTe producer with significant production volume--the companys one-millionth module was claimed to have been produced in Dec. 2011--Second Solar recently manufactured 82.8-W modules at its Longmont, CO facility with 12.2% aperture efficiency. Results are now being verified by NREL. Mass production of the 82-W units is targeted for the second half of 2012. However, the start-ups fab lines were halted in 1Q12, fanning speculation that its product line was uncompetitive and calling the companys solvency into question. The fab lines were alleged halted to be re-instrumented for the manufacture of the next gen modules.

Table 3. Selected PV Efficiency Advances

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Solar PV Market Update Vol. 1 7 May 2012

PV Technology Development

continued from page 6

Table 3. Selected PV Efficiency Advances (continued)

Copper Indium Gallium Diselenide (CIS / CIGS)

Solar Frontier

17.8% The largest CIGS producer (in capacity terms)--with ~400 MW shipped in 2011--and No. 2 overall producer of thin film PV. Record CIS-based aperture area efficiency achieved on a 30-centimeter-square PV lab module. Result claimed to come on a fully integrated submodule performed with processes similar to what is in place in the companys factories at commercial production scale. Champion module at 14.5% aperture efficiency recently produced, equivalent to module efficiency of 13.3%.

MiaSol 17.3% Third-largest CIGS panel producer in 2011, behind Solar Frontier and Solibro (~66 MW), respectively. Announced in Feb. 2012 a 17.3%-efficient champion cell, and the commencement of scale commercial production of 14%-efficient modules. The company increased its panel efficiency by >30% from 2011 to 2012. A $55M cash infusion in Mar. 2012 raises total VC funding to $400-500M since 2004.

III-V Multi-Junction

Solar Junction

33.9% (HCPV

module)

Working with CPV vendor Semprius to deliver multi-MWs of epitaxial wafers. Semprius claims to have set the world-record CPV solar module efficiency using Solar Junctions III-V multi-junction solar cells based on lattice-matched dilute nitrides. The firm recorded a module efficiency of 33.9 percent.

Gallium Arsenide (GaAs)

Alta Devices

23.5% (module)

GaAs-based panel efficiency claims verified by NREL, though information on the size of the panel currently unknown. The companys epitaxial lift-off technique allows the firm to produce layers of GaAs that are flexible and measure 1 micron in thickness. Still in the pilot manufacturing phase, Alta Devices has won >$120 million in venture funding.

Note: Efficiency results differ based on the area of measurement; short-circuit current measurement is strongly dependent on cell area. Total area, active area, and

aperture area are possible measurement parameters. Active area is typically only used with small, laboratory-scale devices; aperture and total area standards are

used with commercial-sized cells and modules.

Sources: Greentech Media, manufacturers

Figure 6. Production, Laboratory, and Theoretical (Maximum) PV Module Efficiencies

Source: NREL

gap between the two technology types over time. For example, by 2016, CIGS on glass is predicted to become 15% efficient, equal to current multicrystalline module efficiencies, while First Solar aims to produce 15% effi-cient CdTe modules in that timeframe as well. Moreover, the upside for thin films is further bolstered by its comparatively superior energy yield per watt peak (kWh/kW) performance characteristics vis--vis c-Si technologies that enable better low light and high temperature operation. (Of course, many other elements affect the overall system costs of competing PV technologies and the resulting efficacy of their commercial deployment.)

All told, the reported gains in efficiency appear to be a bright spot in an otherwise challenging market for the solar sector. Target average selling prices (ASPs) are dependent on meeting efficiency roadmaps. Yet it

continued on page 8

Solar PV Market Update Vol. 1 8 May 2012

PV Technology Development

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remains to be seen if the incremental nature of this form of technology improvement can have enough of an impact to tangibly coun-teract the current deep cost declines and product pricing pressure being placed on the PV supply chain.

EPRIs Take: Cost, Value, and EfficiencyPV system economics depend on installed cost, energy value, and system efficiencyall are application dependent. Electricity value is the most dependent on the application. For example, electricity produced remotely from load with a wholesale value is low compared to electricity produced near the point of use with a retail value. Related, the cost of integration changes with the application and may be lower for a utility or an end user and higher for a third party producer. System costs also depend on scale and complexity, such as roof-mount compared to ground-mount and fixed installa-tion compared to tracking.

With the above in mind, PV conversion effi-ciency is one of the most critical components governing the basic, and often nuanced, equa-tion to determine favorable PV system eco-nomics. As described in the DOEs recently published SunShot Vision Study, the per-watt

price of a PV system is directly proportional to total installed system price and inversely pro-portional to system efficiency:

Consequently, reductions in the per-watt PV system price can be achieved via two interre-lated elements, either by decreasing the total installed system price (via PV module, power electronics, and BOS approaches) or increas-ing system efficiency (through greater sun-light-to-electricity PV module efficiency and/or improved electrical efficiency of the inte-grated PV system). Meanwhile, tradeoffs exist that can shape utility investment think-ing. For example, high-efficiency PV modules might cost more than lower-efficiency PV modules on a per-Watt basis, but might reduce non-module system costs due to their higher efficiency. Also, per-Watt power elec-tronics and BOS prices could be lower because of lower equipment, labor, and land requirements per Watt of installed capacity associated with higher-efficiency modules. Translation: numerous potential PV system pathways, in fact, exist for reducing total installed PV system prices.

That being said, utilities should remain abreast of PV cell and module efficiency developments with the expectation that near-term innovations will be incremental in nature and the time lapse between labora-tory-based advances and commercial flow through will be evident. No game changers are likely to manifest themselves in this realm of PV R&D.

For PV module manufacturers conversion effi-ciency gains are a step in the right direction, but, on their own, they will not go a long way toward making up for the significant erosion in margins that has occurred in the last several years. Improvements in efficiency and yield, via production process improvements, capac-ity scale-up, and material usage reduction will need to be simultaneously pursued to keep pace with pricing expectations. (Semiconduc-tor material, for example, accounts for about 60% of c-Si module cost and 8%22% of CdTe and CIGS module cost.)

Technology 2011 2012 2013 2014 2015 2016 Record

Super Monocrystalline Silicon 19.9% 20.1% 20.4% 20.7% 21.0% 21.2% 25.0%

Monocrystalline Silicon 15.0% 16.0% 16.3% 16.9% 17.5% 17.8% 25.0%

Multicrystalline Silicon 14.5% 15.0% 15.2% 15.5% 15.7% 15.9% 20.4%

CdTe 11.7% 12.6% 13.3% 14.0% 14.5% 14.8% 17.3%

CIGS 12.5% 13.3% 14.0% 14.5% 15.0% 15.5% 20.3%

c-Si/a-Si 9.8% 10.2% 10.6% 11.0% 11.4% 11.7% 12.5%

a-Si (3-j) 9.3% 9.7% 10.1% 10.4% 10.8% 11.1% 12.5%

a-Si (1-j) 6.5% 7.5% 8.0% 8.0% 8.2% 8.5% 10.0%

Note: Super monocrystalline silicon technologies use moncrystalline silicon coupled with proprietary cell design/ Examples include back contact-only modules and

HIT (heterojunction with intrinsic thin film layer) cells. Back-contact modules position the electrical contacts on the back of the cell, leaving the entire front surface free

to absorb power. Sanyos HIT cell, meanwhile, is a hybrid of monocrystalline silicon surrounded by ultra-thin amorphous silicon layers.

Source: GTM Research

Table 4. Module Efficiency Forecasts for PV Technologies through 2016

Solar PV Market Update Vol. 1 9 May 2012

EPRI Supplemental Project to Validate PV Performance, Reliability, and CostAs part of a forthcoming supplemental project, EPRI will be examining the performance and reliability of up to 10 different flat-plate PV technologies at the Solar Technology Acceleration Center (SolarTAC)the largest solar test bed facility in the United Statesin Aurora, Colorado. Open to additional funders, the three-year study (SPN #1023540) is intended kick-off in the May/June timeframe and include side-by-side field testing of both traditional and novel PV module technologies, including a mix of monocrystalline, c-Si, amorphous silicon, CIGS, and CdTe varieties.

The major objectives of the demonstra-tion are to analyze and validate system output (including degradation and longevity issues) to, in turn, improve PV

technology bankability. This in mind, all tested systems, each to be sized at 10 kW to ensure statistical significance, will be confined to those deemed to have a reasonable chance at long-term commercial viability. Moreover, given their pronounced market expansion, a number of Chinese-based crystalline silicon products will be included as part of the projects test group (see Table 5).

In addition to system performance report-ingwhich will encompass analysis of the various modes of PV operation, including start-up, cloud transients, and normal operationthe project will document the installation, commissioning, O&M, and decommissioning processes as well as their associated costs. (Balance-of-system issues, such as module failure, wiring, and inverter

malfunction will also be assessed). Potential means of improving the cost effectiveness of the PV systems will furthermore be identified, such as O&M and design modification approaches that can maximize energy output and reduce capital and O&M expenditures. All told, the demonstration is intended to provide utilities and other end users with data-driven results to better warrant long-term, large-scale future investment in both mature and early commercial PV product choices.

For more information: Cara Libby, Project Manager, 650-855-2382, clibby@epri.com.

Cadmium Telluride (CdTe) Amorphous Silicon (a-Si)

First Solar The leading thin-film provider Sharp The leading a-Si player

Abound Solar Runner-up CdTe supplier Monocrystalline

Primestar Solar Financial security: backed by GE SunPowerThe U.S. domestic market leaders

Copper Indium Gallium Diselenide (CIS / CIGS) Suniva

Solar FrontierThe front-runner for CIGS, based on deployment

Chinese Monocrystalline & Polycrystalline

Avancis

Top CIGS manufacturers; Miasole and Nanosolar recently received significant new funding

JA Solar

Chinese leaders in low-cost polycrystalline; Suntech recently announced record efficiency results for its Pluto cell

Global Solar Suntech

MiaSole Trina Solar

Nanosolar Yingli

Solibro Other (c-Si)

SoltectureSanyo Offers a bi-facial c-Si-based panel product

Stion

Table 5. EPRI PV Supplemental Module Testing Targets

Solar PV Market Update Vol. 1 10 May 2012

Technology SpotlightIn each edition of the PV Market Update, EPRI spotlights a selected PV technology endowed with novel engineering design features and con-cepts. These brief profiles are intended to pro-vide members with introductory details on some of EPRIs watch list of solar technologies that the Institute believes offer breakthrough poten-tial. For more in-depth information on these product summaries, contact Adam Shor, EPRIs Solar Innovation Scout, ashor@epri.com.

Technology Spotlight: tenKsolarBloomington, MN-based tenKsolar has devel-oped a PV system that integrates solar mod-ules and reflectors into a mounting arrange-ment configured in a repeated wave pattern. The systems unique electrical interconnection topology, along with its associated redundan-cies aimed at eliminating single points of fail-ure, is designed to enable greater light absorp-tion and, in turn, generate higher energy density output compared with conventional flat plate PV technologies. Intended for both flat roof-mount and ground-mount applica-tions, the tenKsolar product line offers poten-tial for lower levelized cost of electricity (LCOE) via higher yieldsachieved through unverified efficiencies of up to 27-28%and upfront savings in reduced labor and parts through balance of system (BOS) novelty.

The major innovation of tenKsolars Redun-dant Array of Integrated Solar (RAIS) Wave

system involves uniquely orienting mono- and poly-silicon-wafer modules, embedded with conventional single junction solar cells, to receive additional light from built-in reflec-tors.10 Based on 3M Cool Mirror Film Tech-nology, the reflectors are mounted at a 45 angle on the backs of corresponding modules (see Figure 7). Through the additional inci-dent light, the company reports that modules rated at 180W can achieve greater rated out-puts exceeding 260W.

The RAIS Wave system electrical topology consists of redundant integrated devices in each module that allow for continued opera-tion in the event of internal failure. In addi-tion, the system is redundantly connected on the DC side to multiple single phase DC-AC converter boxes which are wired into 480VAC three phase interconnections. As a result, the converter boxes can, for example, be actively managed to vary the amount of energy delivered to each phase on the grid. Separately, the company claims that system layout can minimize partial shading effects. Further, the wave-like rack-ing structure avoids roof penetration, requiring minimal ballast, and helping to reduce the systems overall weight per square foot (typically

Solar PV Market Update Vol. 1 11 May 2012

Technology Spotlight

continued from page 10

Technology Acceleration Center (SolarTAC) or a utility site to help gain utility and investor confidence in the PV systems commercial uptake. (A major investor-owned utility located in the southeast has, for example, recently purchased a tenKsolar system.)

Particular aspects of tenKsolars technology that EPRI finds interesting and that would benefit from evaluation include:

Non-standard approach to module design and electrical system topology that enables cell-level independence. tenKsolar has eliminated internal series dependencies in its modules and does not utilize bypass diodes in its system, addressing many of the root causes responsible for power

degradation and failure. According to NREL, over 80% of failures in PV modules emanate from failures in cell interconnections, internal corrosion, cell cracking, module-to-module connectors, and bypass diode failure.

Integrated inverter scheme. The tenKsolar system contains a redundant, in parallel low voltage inverter configuration that is intended to lessen the impact of potential inverter failure on system power output. Meanwhile, the ability of the modules to handle all MPPT and voltage regulations functions onboard, simplifies the role of the inverter. As a result, the company reports that inverter maintenance and repair can be scheduled for five-year or greater increments.

Racking integrity. The integrated nature of the tenKsolar systemthe racking is effectively comprised of modules and reflectorspotentially simplifies installa-tion by eliminating steps and labor cost.

Safety features. When the tenKsolar system is disconnected, energy production stops inside the module and the entire array is made safe. Meantime, all integrated PV modules individually operate at below 10VDC, while arrays function at below 60VDC.

1025103 May 2012

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EPRI Resources

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Integration of Distributed Renewables(Program 174)

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Solar Generation (Program 84)

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U.S. PV Market Landscape: A 2011 Retrospective and OutlookSolar Cost & Pricing Snapshot: Trends in PV, CPV, and CSPAdvances in PV Cell & Panel Efficiencies: Positive Long-term Implications Amid Pressure to Meet Short-term ExpectationsTechnology Spotlight: tenKsolar