1. Birth of Thin Film CdTe and CIS
Solar PV in the US Market
Ken Zweibel
Director
Institute for Analysis of Solar Energy
George Washington University

3. CdTe and CIS
• Cadmium telluride (CdTe) and alloys of copper
indium diselenide with gallium and sulfur (CIS)
• Key 2nd generation, thin film photovoltaic
module technologies aimed at reducing
system cost
• Challenging semiconductor‐based PV options
with almost no prior science or technology
base

4. Now and Then
• 1980
– Decent small area solar cells
– Huge scale‐up challenges (module area and
throughput)
– Little or no market pull
• Today
– CdTe: Made by the single largest thin film
manufacturing company (First Solar) and providing the
lowest‐cost solar systems
– CIS: The largest focus of solar venture capital
investment

5. Context
• From 1980 to 2003, the solar market was
almost negligible
• Solar was ten times more expensive than
conventional electricity (50 c/kWh versus 5)
• Climate change was an annoying background
issue
• Huge technical challenges existed without the
money to overcome them

6. Cash Flow
• Lack of commercial revenue prevented
– Investment in R&D to move technologies closer to
product
– Improve the product from its rudimentary levels
• Funds came from
– Government
– Individual wealthy visionary investors
– Oil companies and a few others (“green wash?”)
– Not from venture capital (lack of market)

7. The Interregnum
• During 1980 to 2003
– Small area cell conversion efficiencies rose to
respectable levels
– Processes were developed to scale‐up areas to
product (“module”) sizes (10,000‐fold size
increase)
– The first decent modules were made
– Pilot lines were built and usually failed (another
10,000 fold product area increase)

9. Companies That Built Pilot Lines
• CdTe • CIS alloys
Coors – Golden Photon – ARCO Solar, Siemens
–
Solar, Shell Solar, Showa
Matsushita
–
Shell
BP Solar
–
– Boeing
Solar Cells Inc.
–
– EPV
Antec (Germany)
–
– Wurth (Germany)
– ITN Global Solar

10. Production as of 2003
• CdTe – 5‐15 MW/yr
– Antec
– First Solar (was Solar Cells Inc.)
• CIS
– Pilot lines at Wurth and Global Solar (sub 5
MW/yr)
• That is – literally nothing

11. A Tale of Two Technologies 2003
CdTe 2003 CIS Alloys 2003
• One key corporate leader • No mature, successful
(First Solar) with substantial approach to full‐scale
investment and almost manufacturing
mature technology • Spectrum of participants
– Walton Family (Wal‐Mart and investors
heirs)
• Little or no venture capital
– Management knowledgeable
• Best small‐area cell
and confident of its product’s
efficiency of any thin film
value and potential
(“story rich”)

12. What Happened in 2003?
• Pre‐2003, Japanese Subsidies (small but a
start)
• Post‐2003, Substantial German Subsidies
– Huge new market
– Huge revenue growth
– Cash flow circulated into technology development
and economies of scale
– Companies and VCs got interested got wind at
backs to take risk of scale‐up

13. CdTe Today
• Half a gigawatt of annual production
• Nearly a gigawatt of production next year
• One major company (First Solar)
– Five others
• Antec – still producing low‐efficiency modules in small volumes
• Two start‐ups corporate owners (Calyxo by Q‐Cells and PrimeStar
Solar by GE)
• Two with VC investment (AVA, Arendi)
• First Solar
– Lowest cost producer of modules and systems in all of PV
– Among the largest PV companies in the world by volume

15. First Solar Capacity Expansion
1,104MW
720MW
308MW
∼100MW
25MW
2005 2006 2007 2008 2009
2005 and 2006 based on Q4 06 run rate 2008 – 2009 based on Q2 08 run
2007 based on Q4 07 run rate rate

16. First Solar Module Cost Per Watt Trend
$1.01/W Core Cost in 2008 Q3

17. CdTe, PV Cost Leader
• A 40 MW system in Waldpolenz Solar Park, Germany: at the
time of its announcement, it was both the largest planned
and lowest cost PV system in the world: 3.25 euros or $4.2
per watt. [36]
• A 7.5 MW system in Blythe, CA, where the California Public
Utilities Commission has accepted a 12 ¢/kWh power
purchase agreement with First Solar (after the application
of all incentives). [37] Defined in California as the quot;Market
Referent Price,quot; this is the price the PUC will pay for any
daytime peaking power source, e.g., natural gas.
• A contract for two megawatts of rooftop installations with
Southern California Edison, where the SCE program is
designed to install 250 MW at a total cost of $875M
(averaging $3.5 per watt), after incentives. [38]

18. CIS Alloys Today
Trying to combine best aspects of sunlight‐to‐electricity conversion
•
efficiency with low cost
– 20% small‐area solar cell (versus 16.5% for CdTe)
– 15% minimodule (versus 12% for CdTe)
– But cost and manufacturing are huge challenges
Small production (under 25 MW/yr) from
•
Wurth (funded by wealthy individual)
–
Showa Shell (Shell Japan)
–
Honda
–
Global Solar (Utility funding, then PV company, Solon, buyout)
–
Avancis (Shell and St. Gobain)
–
Solyndra
–
Huge number of competing start‐up companies with different approaches
•
(50?) funded by VCs
– Most building pilot or production lines
• Nanosolar, Miasole, Heliovolt, etc.

19. CIS Has Strained the VC Approach
• Very high level of investment to get through
cell‐to‐module scale‐up
• Another large investment for first factory
• Potential for several multi‐year delays
• Very high pre‐production valuations if value of
initial investments are to be sustained
• Probably a combination of the attractions of
solar and dot‐com nostalgia
– Mostly a silicon valley phenomenon

20. Lux Energy Summit 2008, Matthew Nordan

22. Gronet said Solyndra has raised $600 million in
equity from investors including the Virgin
Seven funds known to have invested in Green Fund, Madrone Capital Partners,
Miasole’s latest round — Miasole, one of the RockPort Capital Partners, Argonaut Capital
biggest thin‐film solar startups, has been Partners, Redpoint Ventures, US Venture
raising a $200 million round. So far, the Partners and CMEA Ventures. It was reported
company has obtained commitments from last year that Solyndra raised $79 million.
seven funds. Miasole is believed to have raised
$50 million in a series D round last autumn.
Nanosolar Ups Funding to $0.5B; Partners
Strategically for Solar Utility Power
August 27, 2008
By Martin Roscheisen, CEO
As part of a strategic $300 million equity
financing, Nanosolar has added new capital AVA (CdTe): This $104
and brought its total amount of funding to million funding was led
date to just below half a billion U.S. dollars. by DCM and included
new investors
Technology Partners,
HelioVolt Corp., an Austin company pioneering
GLG Partners and
the use of powerful and durable quot;thin‐filmquot;
Bohemian Companies,
solar materials, said Wednesday it has raised
LLC as well as prior
$77 million in a second round of investment.
investors, including
Invus, LP.

24. Changing VC Model
• VCs have problems with longer‐term, higher
risk, more capital‐intense technologies
– And complex technologies for which they lack
specialist knowledge
• But shifting societal needs mean that these
are the ones with the highest potential payoff
• VCs adapt to the new opportunity

25. Acknowledgements
• Matthew Nordan, Lux Research, for gathering
data on VC investments in thin films in US and
conceptualizing the structure of VC investing
as “broken” for these investments