There is an increasing shift toward sustainability, and because solar PV assists in reducing carbon-dioxide emissions, the clean energy technology has emerged as a key solution.
Governments across the globe are providing various financial incentives to boost the adoption of PV, and solar is gaining ever more awareness among consumers and companies alike. In addition, PV prices have been declining due to increased competition in the market, especially in the Asia-Pacific region. For instance, material prices have dropped by approximately 50% since 2010.
These and several other factors together are driving the global solar market, and they are slated to provide robust growth opportunities for PV in the future.
Nonetheless, module manufacturers still face a number of challenges, such as maintaining the material quality, enhancing the ease of installations, and reducing the cost of balance of system (BOS) components. In particular, material quality plays a major role in determining the module’s durability. It is a major challenge due to increased commoditization of materials as a result of growing competition in the market. Therefore, module manufacturers strive to strike the perfect balance between price and quality. Furthermore, module manufacturers are also consistently trying to ease the installation process. For instance, an interesting trend that has been gaining significant momentum is the “pre-assembled PV system.” These modules come with all of the BOS components assembled, which makes the installation on the site convenient. Reducing the cost of BOS components is an important challenge, as they account for approximately 40% to 50% of the cost of the module. Therefore, technologies with lower-cost BOS components are likely to gain popularity, provided they offer efficiency in the range of 17% to 20%.
PV cell technologies have been continuously evolving in terms of new innovative solutions and product enhancements. Considering recent research developments, thin-film technologies are expected to slowly substitute the traditionally used wafer-based modules in the long term. This can be attributed to a number of benefits that thin-film modules offer over crystalline silicone (C-Si) modules, such as light-weighting, lower cost, ease of manufacturing, and ease of installation.
The adoption of cadmium telluride (CdTe) and copper indium selenide (CIS)-based modules is likely to gain momentum due to the recent developments in improving their efficiency at a commercial and an empirical scale. For example, in 2015, First Solar developed CdTe modules that offered 18.6% efficiency and then kept aiming for bigger gains. In fact, the company pioneered a module offering 22.1% efficiency in early 2016. Such developments will accelerate in the future and help thin-film modules overcome their present efficiency challenges.
However, some major challenges for the adoption of CdTe technology – such as limited tellurium supply and toxicity of cadmium – still remain unresolved. Cadmium is abundant when compared to the supply of tellurium, as it is an extremely rare element. Furthermore, cadmium is one of the six most toxic materials known, making the disposal of CdTe panels a serious issue. Manufacturers might also need to struggle with increasingly stringent standards for the use of toxic material and product handling procedures in the near future.
Some of the emerging third-generation thin-film technologies are perovskites, organic PV and quantum dots. Notably, perovskites have gained high popularity and garnered immense interest not only in the research community, but also among market participants. This can be attributed to their potential to offer superior efficiency when compared with other emerging technologies. For example, the efficiency of perovskites has improved from less than 2% in 2006 to close to 20% in 2015. Considering that C-Si technology took almost 25 years to attain an efficiency of approximately 15%, this can be deemed as rapid development in the photovoltaics market. Perovskites also offer significant benefits in terms of material and processing cost, as well as high flexibility and semi-transparency. However, the hurdles for perovskites are low cell stability, especially in moist environments, and the deterioration of efficiency with continued exposure to sunlight. Therefore, commercialization of this technology seems unlikely in the short term.
Glass has always dominated the front-sheet market in North America. In fact, pattern-coated glass has gained high popularity in the region, as it helps to reduce transmission and reflection losses. There have been a number of innovations in the anti-reflection (AR) coatings used in glass in order to increase the power output of a module. For example, closed-pore-structure-based AR coatings are expected to gain popularity in the next five years, as they offer enhanced performance in terms of higher optical gain and reliability when compared to the conventional open-pore-structure-based AR coatings.
Notable materials in the back-sheet market are fluoropolymers and polyester sheets. While fluoropolymer sheets dominate in the Asia-Pacific and North American markets, polyester back-sheets are most widely used in Europe. Fluoropolymer sheets are expected to be slowly substituted by polyester sheets, especially in the North American market, as they offer the required performance when tested against damp heat and accelerated aging testing parameters at a lower cost. Furthermore, polyester sheets are relatively inexpensive compared with fluoropolymers, and it is likely that the prices will remain low in the near future.
Ethylene vinyl acetate (EVA)-based encapsulants have been dominating the market, as they are highly cost-competitive when compared with polyvinyl butyral (PVB), silicone and ionomer counterparts. However, silicone and ionomer encapsulants also perform well against potential induced degradation, which is a commonly observed issue with PV modules. In addition, silicone encapsulants have also proven to enhance the efficiency of the module, as they transmit short wavelength light rays with higher intensity. The biggest barrier for adoption of these new chemistries, especially in the Asia-Pacific region, is their higher price.
Although the material trends across these three areas might not be significant in the short term, they are likely to have a critical impact on the PV market in the long run.
To summarize, considering the evolution of the PV industry in the last 10 years, it is evident that more innovations, both in the manufacturing and in cell technology, are expected to evolve with time. Materials that offer higher value and performance – albeit at a higher price – are likely to gain popularity. Module manufacturers will be expected to mitigate challenges, such as low efficiency and high-cost BOS components, by increasing their focus on research and development.
Siddharth Anand Sainath is a research associate at Frost & Sullivan’s visionary science practice.