The market of thin-film solar panels made from copper indium gallium diselenide (CIGS) will nearly double in size to $2.35 billion in 2015, according to a report released today by Lux Research. That good news won't be experienced by all thin-film CIGS manufacturers. The way Lux sees the market shaking out, only a few companies will survive the significant capital challenges ahead.
Despite the public failure -- and continued fallout -- from the bankruptcy of thin-film panel maker Solyndra, 2011 was considered a breakout year for manufacturers as production costs fell, module efficiency improved and commercial rooftops installations rose.
The CIGS solar industry still lags far behind polysilicon-based solar, in terms of installed capacity. And that gap grew in the past year, thanks to the precipitous drop in the price of polysilicon. Still, Lux projects the market for CIGS tech will nearly double to 2.3 gigawatts over the next several years. Even with the growth, tt won't be an easy time for the CIGS industry. Lux projects that venture capital money will dry up for CIGS manufacturers, which will force companies to seek out strategic partnerships.
Winners and losers
Within the CIGS industry, only a few companies are likely to survive. Lux tapped Solar Frontier as the clear winner in the industry in terms of overall execution and its progress in emerging markets such as India, where it is selling more than 30 megawatts of panels. Japan's Solar Frontier has made inroads in the U.S. as well. The company reached a deal earlier this month to supply up to 150 megawatts of its solar panels to a California power plant, making it the world's largest CIGS installation.
Solibro, Global Solar and Avancis also are likely to emerge as bankable players, assuming they are able to strengthen their financial position and increase manufacturing capacity.
Stion, MiaSolé and NuvoSun were all picked as companies that have the potential to emerge as early champions of sputtering technology, a process used to deposit the thin-film layer onto the substrate. Emphasis on "potential." A lot has to happen in the meantime and will be highly dependent on their ability ramp up capacity and make strategic partnerships. Miasole is the company at greatest risk, largely because it doesn't have a big-time partner like Dow Chemical Co., which has invested millions into NuvoSun.
Companies that need to get their act together now or risk failure include Nanosolar, Ascent Solar, Heliovolt and Soltecture, the Lux report said. Solopower and Odersun will also face an uphill battle to survive.
Of course, the companies that don't fail, but don't quite succeed could be snapped up by bigger players. CIGS companies most likely to be acquired in the next several years include ISET, Flisom and AQT, according to Lux.
The future of the entire CIGS industry, along with specific players, rests heavily on the interest of major corporations, not venture capitalists. Almost all CIGS makers will need to raise more money to expand capacity -- a major crux to survival -- and Lux views the market reach, financial stability and cash flow of corporations as the better partner.