Why I Believe in Thin Film

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Analyzing Solar Stocks With False Assumptions Dana Blankenhorn

When most people think of solar energy, they see flat panels on a roof.

They don’t think about thin film. They don’t see it.

This is one of the many advantages of CIGS  and other thin film solar technologies. So what if its efficiency is half that of a panel? It conforms to the shape of the place where it lays.

Thin film can also be productized in ways no panel can. It can be turned into something retailers can sell or bloggers will drool over. Try doing that with a panel.

With the exception of the 800-pound Gorilla First Solar Inc (FSLR), it’s true that we’re still measuring the annual supply from these manufacturers in megawatts, figures utility companies can’t (and often don’t want to) hear, except as window-dressing or a source of subsidies. But changing that equation is as simple as getting the right product into mass production. (Skeptics should listen again to the words of former DEC CEO Ken Olsen. “There is no reason for any individual to have a computer in his home.”)

Personally I think I’ve seen the future and it’s thin.

Copper indium gallium (di)selenide is also not the only possible formula for a thin film. Sharp (SHCAY.PK) is looking at amorphous silicon, despite Applied Materials’ (AMAT) failure with it. Maybe they will succeed, and maybe they’ll fail too. The search for new materials will go on. (Like the man told Dustin Hoffman in The Graduate, “One word. Plastics.”)

There is a ton of competition in this space. Analysts at Greentech Media recently wrote a list of just CIGS thin film companies for a story on one of them. Want to hear it? Solar FrontierQ-Cells (QCLSF.PK), Solyndra, SoloPower, MiaSolé, Wuerth Solar, Stion, GSP, Nanosolar. They can’t all be wrong, can they?

And is that an exhaustive list? Far from it. Venture capitalists are funding more all the time, often on the promise of greater efficiency. While analysts at Greentech Media are very positive about companies like AQT Solar that can get into production fast and cheap, or SoloPower, with its claims of UL Labs approval, it’s clear to me that this is the first mile of a corporate marathon.

Put it this way. How many PC makers from the late 1970s can you name? (Other than Apple.) In terms of this market, I don’t even think we’re at 1977 yet.

There are just so many directions in which improvement can happen with thin films. Efficiency, production cost, durability, materials cost, etc. It’s true that the total power being supplied by CIGS right now looks pathetic next to standard panels, but the advantages are just too obvious.

That’s why companies like Dow Chemical  and (now) Intel are putting cash into the space. Dow likes the idea of solar systems that go on with the roof, that in fact are the roof. Intel likes Sulfurcell, a German company that claims (as others do) that thin films can be as efficient as panels.

The way to look at this is not through the eyes of current production, or short-term profits. It’s about the technologies behind the curtain, the new materials and techniques that can get that to market. A good venture capitalist will invest in 10 plays knowing only three will ever bring him any return, but in hopes that 1 of those three will be huge. That’s the right attitude to have.

What does it mean when every roof, every wall, every tent and bleach blanket can be delivering solar power to its owner? Remember, electronics and many electrical devices are requiring less-and-less power every year.

More to the point, what does it mean to an industry that depends on long-term contracts for construction of panel systems if the wall can deliver just as much power for the cost of wallpapering? Or painting? That’s a silly question today, but one that the people in this business should probably start thinking about.

Dana Blankenhorn first covered the energy industries in 1978 with the Houston Business Journal. He returned last month after a short 29 year hiatus because it’s the best business story of our time. In between he covered PCs, the Internet, e-commerce, open source, the Internet of Things and Moore’s Law. It’s the application of the last to harvesting the energy all around us he’s most excited about. He lives in Atlanta.

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