In Part 1 of this article, we looked at how lab and commercial efficiencies are growing in crystalline, CIGS and amorphous solar cells. Now we’ll take a look at how increasing efficiencies have boosted cadmium telluride, the thin film made by No. 1 solar manufacturer First Solar. We also examine how cadmium telluride could also help grow the market for multijunction concentrator cells — the world’s most efficient cells — by making concentrating-photovoltaic projects more cost effective. Efficiency improvements have been accelerating in the last few years as more money, scientists and companies have entered the solar space, according to Martin Green, a professor at the University of New South Wales. Where will these efficiencies ultimately plateau?

Cadmium-telluride

First Solar, the company that popularized cadmium telluride, is the world’s largest solar manufacturer, with 1.1 gigawatts of production last year. It owes much of its leadership to having the lowest announced per-watt costs in the industry. The company, which broke the $1-per-watt milestone back in February of last year, in the second quarter announced it’s producing panels at a cost of US $0.76 per watt.

And a big part of the reason for its low costs has been its growing efficiencies, said Jenny Chase, lead solar analyst for Bloomberg New Energy Finance. “One of the reasons First Solar is so successful is because they keep improving the efficiency of their modules, which means their effective capacity increases without them spending new money on new lines,” she said. “They’re doing the same thing, but because they’re doing it slightly more smartly, they’re getting more watts and paying slightly more, but can sell for [more money] because the modules are sold per watt.”

First Solar sells the most efficient cadmium-telluride panels in the world, with Photon’s February overview tracking them at 10.4 percent efficiency. The company reported that its panels grew to 11.2 percent efficiency in the second quarter of this year from 10.9 percent efficiency in the same quarter last year.

Meanwhile, the top lab record for this technology is a 16.7 percent cell created by the National Renewable Energy Laboratory, which tested the cell back in 2001, according to Progress in Photovoltaics. And the theoretical efficiency hovers around 30 percent, according to an NREL report.

In an announcement in September, Sunovia Energy Technologies and EPIR Technologies claimed they’ve made a technology breakthrough that could raise that potential efficiency. They said the cadmium-telluride technology set a new world record for open-circuit voltage, which correlates to efficiency, and estimate they will be able to make two-junction cells with a production efficiency of 35 percent.

Multijunction Concentrator

Multilayered cells with concentrators are the world’s most efficient cells, bar none. And in a test in September, Spire broke the record for this type of cell. Its multijunction concentrator cell, boasting 41.3% efficiency, included layers of indium gallium phosphide, gallium arsenide and indium gallium arsenide, as well as a concentrator that magnifies the sunlight 406 times (or, in industry language, 406 suns). The company said in October that the cell resulted from an NREL Photovoltaic Incubator subcontract awarded in early 2009.

Spectrolab had set the previous record with a 364-sun concentrator cell made of layers of gallium indium phosphide, gallium indium arsenide and germanium in August of last year. Sharp also announced in September that it broke the record, but not by as much as Spire, which boasts a 42.1 percent efficiency cell developed in partnership with Tokyo University.

“Congratulations to Spire. It’s certainly a good result and it reflects the progress being made in the [concentrating photovoltaic] industry on tech improvements,” said Spectrolab President David Lillington, who added that the record has been broken about every six to nine months. “Fortunately, we’ve been able to be the world record holder for a number of years and it’s probably unrealistic to expect to maintain the record 100 percent of the time, but we have a roadmap that will hopefully put us back in the lead.”

These cells are targeted at concentrating-photovoltaic projects, which use mirrors or lenses to concentrate sunlight into the cells. The projects require far fewer – and smaller – cells than those used in traditional solar panels, enabling companies to use more expensive, but more efficient, materials. CPV cells use 400 times less semiconductor material than conventional PV cells, Lillington said.

Typically, Spectrolab has been able to turn lab cells into commercial cells in about two years, Lillington said. “These are more than laboratory curiosities,” he said. The company is already producing cells with 38.5 percent average efficiency today, and plans to launch a new cell with 40 percent average efficiency in the first quarter of 2011 and a 41.5 percent efficiency cell in late 2012 or early 2013, he added.

These cells could theoretically reach 55 to 60 percent efficiency, but realistically, Lillington said he thinks they will top out in the 45 percent range somewhere between 2015 and 2020. The company plans to grow its production up from 40 megawatts of CPV cells this year to roughly 120 megawatts next year, he said.

When Does the Drive to Efficiency End?

The push toward higher efficiency is likely to peak at some point when efficiency gains are no longer commercially viable, said Chris O’Brien, head of market development at Oerlikon Solar. “That’s always been the case with PV where you want to make sure you’re not pursuing the perfect efficiency to the point where [it’s no longer cost-effective,]” he said. “Many times increasing the efficiency will increase the cost of the cell of module, and you want to make sure that the added value outweighs the cost of getting that higher efficiency.”

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Of course, efficiencies are hardly the only important metric to the industry. Cost – both of the panels and of installation and other “balance of system” components, such as wiring and inverters — is obviously another big factor, which is why companies often speak in terms of their cost per watt.

While higher efficiencies have the potential to reduce the cost per watt for manufacturers and the total price per watt for customers, in many cases, manufacturers also charge more for higher-efficiency panels. Because high-efficiency panels often sell at a premium, some lower-efficiency panels can end up costing less per watt for some projects, companies say.

Another key metric is the amount of electricity that the panels deliver, which isn’t necessarily reflected in their efficiencies. That’s because efficiencies measure power, or the highest amount of watts that can be produced in peak conditions, rather than energy, or the number of kilowatt-hours of electricity that the system can produce.

Amorphous-silicon technologies can usually produce more electricity in diffuse light or in high temperatures, for example, than crystalline-silicon technologies with the same peak capacity, O’Brien said. “Customers shouldn’t just look at the efficiency label on the module, but also should pay attention to the expected energy output on the module,” he said. At least in the first few years of testing, amorphous-silicon panels consistently produce 5 to 10 percent more kilowatt-hours than crystalline panels with the same rated capacity, University of New South Wales Professor Green said.

Companies have shifted to talking about the levelized cost of energy or cost per kilowatt-hour in addition to the cost per watt, and many companies also are discussing the payback time or return on investment that customers can expect, said Paul Wormser, senior director of product engineering and system solutions at Sharp Electronics’ solar division.

The different metrics are important because they help customers pick the right technologies for their specific projects and locations, he added. For some projects, cost per watt will be more important; for others, cost per kilowatt-hour will dominate. In some cases, it makes sense to buy a less efficient system because it comes at a better price, Wormser said.

In some locations, it may be simpler to connect a project to the grid if the capacity is under, say, 20 megawatts, than if it’s above 20 megawatts, he said. Customers in that case may want to keep their capacity below 20 megawatts, but will want to get as many megawatt-hours as possible within that capacity, he explained.

Because of all the variations that come with different locations, policies, capital expenses and types of projects, different technologies will prove to be ideal in different conditions, he said. “That’s why we have so many technologies from so many companies on the market today.”

Overall, Wormer said he’s seeing an industry shift from a focus on devices, such as cells and panels, to the economics of the solar-power system as a whole. “We are seeing people really recognize that the value proposition of solar is not in cell efficiency; it’s in the delivered levelized cost of energy [at the system level],” he said.

Jennifer Kho is a freelance reporter and editor based in Oakland, Calif. Aside from RenewableEnergyWorld.com, her stories have appeared in The New York Times’ Green blog, The Wall Street Journal, Los Angeles Times, AOL’s DailyFinance, MIT’s Technology Review, The Christian Science Monitor, Reuters.com, Earth2Tech and other publications. She has more than a decade of journalism experience and has been covering green technology since 2004.