Dye Sensitized Cell Markets – 2012

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In the past two years, the dye sensitized cell (DSC) market has come of age and has moved out of its R&D phase. The performance of DSCs is now comparable with amorphous silicon PV, but with much more potential than a-Si for performance improvements. DSC’s also offers an ability to be deployed on flexible substrates and perform under non-peak insolation.

This report provides an in-depth market analysis of recent developments in DSCs, examining the meaning of the latest products, strategies and technical developments. We identify how performance improvements are likely to help grow addressable markets for DSC and where these new markets are to be found. Specifically, we examine the potential for DSC in the BIPV sector and how DSC is likely to do in a world in which solar energy is not the hot topic that it was a few years ago.

The report also appraises the commercial significance of the developments that have taken place in the DSC over the past year; for example, attempts to reduce the cost of dyes and electrodes. And it also includes NanoMarkets’ assessments of the strategies of leading firms active in the DSC space. And, as always with NanoMarkets reports, this report also contains granular forecasts of DSC panel and materials shipments in volume and value terms.

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Dye Sensitized Cell Markets – 2012

  1. 1. www.nanomarkets.net Dye Sensitized Cell Markets 2012 Nano-531 Published April 2012 © NanoMarkets, LCNanoMarkets, LCPO Box 3840Glen Allen, VA 23058Tel: 804-270-1718Web: www.nanomarkets.net NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
  2. 2. www.nanomarkets.netEntire contents copyright NanoMarkets, LC. The information contained in this report is basedon the best information available to us, but accuracy and completeness cannot be guaranteed.NanoMarkets, LC and its author(s) shall not stand liable for possible errors of fact or judgment.The information in this report is for the exclusive use of representative purchasing companiesand may be used only by personnel at the purchasing site per sales agreement terms.Reproduction in whole or in any part is prohibited, except with the express written permissionof NanoMarkets, LC. NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
  3. 3. www.nanomarkets.netExecutive SummaryE.1 How Things Have Changed in the DSC World Since Our Last ReportIn a couple of key ways, last year was a breakthrough year for dye-sensitized (solar) cell (DSC) Page | 3photovoltaics (PV). Technical achievements have brought DSC PV into the realm of severalinorganic PV technologies, and the DSC industry has moved out of its pure R&D stage into earlycommercialization. It is now a real, albeit small and emerging, business.Until recently, DSC was lumped together with organic PV (OPV) technology, and both wereconsidered suitable only for very small-scale, expensive, and low-efficiency applications. But inthe last year, development and commercialization of DSC has clearly outpaced that of OPV. InNanoMarkets’ opinion, the success of DSC may be attributed to the fact that it is simply a morerobust technology. It is less dependent upon pristine, flat, thin material layers, and it is lessinherently sensitive to moisture-induced degradation than is OPV.Yet, despite all of the promise, the industry is still in its infancy. Revenues from sales of DSCmodules remain extremely small, and most sales correspond to demonstration and proof-of-concept projects, or to very small, niche applications like solar chargers for backpacks. Part ofthe problem is, of course, typical of all fledgling industries; it takes time and effort to scale-upand successfully commercialize a new technology. And part of the problem is related to therecent difficulties in the overall PV industry, which is struggling right at the time when DSCcould use a greater degree of excitement surrounding solar energy generation.However, NanoMarkets believes that, despite the slow start – ongoing now for about a decade– DSC is finally poised to take off in the next several years. In fact, signs suggest that the 2014-2015 timeframe will be a critical turning point. NanoMarkets forecasts that the market for DSCmodules, at the application level, will grow from about $40 million in 2012 to over $500 millionby 2015. Then, after building-integrated PV (BIPV) applications for DSC take off, we anticipatethat the market value could exceed $4.4 billion by 2019. E.1.1 Breakthroughs in Efficiency – When 18 Percent is Just as Good as 26 PercentOn the efficiency front, nearly all DSC firms have made improvements, but two recentannouncements stand out as particularly important to the future of the DSC industry, namelyfrom industry-leading UK-based firm G24 Innovations (G24i) and from Japanese firm Fujikura. NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
  4. 4. www.nanomarkets.netFirst, G24i announced a record-setting 26 percent average conversion efficiency in anindoor/energy-harvesting cell fabricated using a new dye and electrolyte material set fromdevelopment partner École Polytechnique Fédérale de Lausanne (EPFL).The new cell was also enabled by incorporating G24i’s in-house developed new transparent Page | 4electrode technology, which is purported to have very low surface resistance (less than 5ohms/square) in a thin film made using a “commodity-scale” deposition process of a“commodity metal.” The precise cell-fabrication technique is undisclosed, but we believe it isalso possible that a tandem-cell arrangement could have been used.Using these technologies, G24i has also enabled the fabrication of 1-V cells, which help the firmto greatly expand the design possibilities for its products, and make electrical integration andvoltage conversion simpler than in previous-generation products.However, our enthusiasm is tempered a bit by the fact that much is still unknown about thistechnical achievement:  Of course, the biggest question is whether G24i can successfully implement the new technologies on their production lines in a reasonable amount of time, and at a reasonable cost.  There are also lingering questions about the new materials. Are they commercially available at reasonable cost, or do they require the use of rare, expensive and/or toxic materials like cadmium-containing quantum dots or gold nanoparticles? Are they compatible with existing manufacturing, or will they require large changes in process?  Finally, is the new technology scalable?According to G24i, the new technology is compatible with existing processes, scalable, and cost-effective. We have no reason to disbelieve this claim, and we will be looking to G24i to makeadditional announcements on this front over the next year.Separately, Japanese firm Fujikura announced the development, and pilot production, of an 18percent average efficiency cell, also designed for low-light environments, such as would befound in home/business temperature and humidity sensor applications and the like. Thisdevelopment is also a significant achievement, and the firm has made a prototype module todemonstrate the technology. However, Fujikura has not yet taken any big steps toward movingthis technology into a commercial product line, and the project’s management remains at theR&D level. NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
  5. 5. www.nanomarkets.netBut Fujikura is a large enough firm, with sufficient financial resources, to fairly rapidly ramp upproduction of the technology if it determines that DSC could represent a significant revenuestream. In this respect, at least, Fujikura has an advantage of DSC-focused G24i.Although G24i is a clear leader in technology development, with its close relationship to the Page | 5EPFL and status as the only DSC module maker shipping significant product, its access to capitalfor a big commercialization push may not be as easy as for an established (and profitable) firmlike Fujikura.We concede, however, that since G24i is a privately held business, we cannot be certain aboutits financial and cash flow situation. It may very well be positioned to implement its businessplan with ease. It has not announced any major funding activities since 2008, when it raisedabout $50 million. With that investment, along with ongoing revenues from sales of itsproducts, it may still have plenty of cash-on-hand to implement its latest technicaldevelopment.And the bottom line is that, even if G24i is able to only achieve half of the lab-scale efficiencyon its production line, that would still be a big step forward in the marketplace, whereasFujikura would have to achieve at least three-quarters or so of its lab/pilot-scale efficiency toconstitute a major breakthrough. E.1.2 The Effect of a PV Industry in CrisisAs we indicated above, the DSC industry is also coming of age as the overall solar energyindustry is in crisis. While DSC’s status as a “third generation” PV technology provides it someimmunity from the goings-on of the wider, conventional and utility-scale PV market, DSC willnot escape completely unscathed. Growth in the DSC industry must thus be seen in the contextof the wider market, and so we have moderated growth rates for DSC compared to projectionsin previous years.In particular, problems in the PV market are clearly affecting the DSC industry’s ability to raiseinvestment capital.  PV is no longer the darling it once was, which means that DSC firms looking for money must work even harder to convince reluctant investors.  The massive conventional panel price reductions caused by Chinese overproduction, with complicit encouragement from the Chinese government, have led to quite a few PV firms going out of business – or making deep personnel cuts and plant closings – in both Europe and the US. NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
  6. 6. www.nanomarkets.net  And, reductions in government support of the PV industry, in the form of subsidies, feed-in-tariffs (FITs), and other tax incentives, can only make matters worse.In this environment, it is hard to convince new investors to pour money into PV, regardless ofthe technology. Page | 6Government funding should also become more difficult to obtain. First, many cash-strappedgovernments may simply choose to fund fewer technology projects. Second, even those DSCfirms that live in countries where governments continue to fund alternative energy projectsmay find that their status as a “preferred” alternative energy technology is no longer secure;the competition from less-maligned technologies may have an edge in any competitively-funded initiatives.For these reasons, we expect that it will be especially hard for very early-stage DSC startups toraise capital. Those businesses that have already been around for a few years and havesomething to show for it – like G24i, NLAB, etc. – are in a slightly better position, but will stillhave to work doubly hard to make their case. The case is, of course, there to be made; DSCcomponents are inherently cheaper to manufacture than anything involving silicon wafers, andit is now up to the DSC industry to really prove it, in a real production setting.E.2 When Will DSC Move Beyond its Development Phase?There has been a clear shift over the last couple of years by the DSC industry in its marketingand business development strategy. Most firms have backed away from touting only championcell, peak-power/full-sun conversion efficiencies. Instead, the narrative for DSC now focuses onits other, valuable characteristics, such as low-cost manufacturing potential, efficiency in low-light and off-angle settings, and, sometimes, better heat tolerance.The low-light performance and energy harvesting suitability of DSC have been particularlyimportant to the emergence of DSC, and to getting DSC to the late development/earlycommercialization phase in which it currently resides. Indeed, over the next few years, we thinkthe additional near-term opportunities for revenue generation in DSC will be found mostly inthese off-grid, small-area applications that can capitalize on the energy harvesting capability.Off-grid applications have been targeted in the DSC space because they are viewed as easier topenetrate; they are the low-hanging fruit of the PV world. They have significantly lowertechnical requirements, in terms of efficiency and lifetime, and they face less competition andcost-sensitivity than the larger-scale and conventional applications. NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
  7. 7. www.nanomarkets.netIn addition, the market for these applications is growing, if for no other reason than that themarket for consumer electronics continues to grow, and it has increasingly lower powerrequirements that can be served with solar charging instead of or in addition to battery power.But, the addressable market for small-scale, off-grid applications is, we think, inherently limited.Areas, and power output requirements, are just not that big, and it is difficult to imagine that it Page | 7could support more than a couple of specialty DSC PV firms.Furthermore, this market has been in place for a few years now, and has yet to take off in a bigway, partly because the costs and availability of DSC PV are just recently getting to a pointwhere they can reasonably be incorporated into consumer electronics devices, but also, wethink, because of a lack of really sizeable market pull. (Disposable batteries, despite theirinconvenience, are cheap and easy to use, and plug-ins for recharging of the non-disposablebatteries used in other consumer products are nearly ubiquitous.)In fact, the volumes are still small enough in the off-grid markets that lab- and pilot-scalemanufacturing has been sufficient to produce cells used in these applications, at least thus far.But the industry needs to break out of the development phase in the near term.Fortunately, we think the time may finally have arrived. NanoMarkets projects that off-grid PVapplications will grow from their current value of about $38 million to just over $400 million by2019. In this area, the growth is largely driven by the expansion of the existing “portablepower” applications already identified by the DSC market, as well as by the (still uncertain)emergence of “embedded power” for consumer electronics. E.2.1 Can Scale-Up Timelines for BIPV Be Met?But even with anticipated growth in the off-grid applications, an off-grid market value of $400million, eight years from now, is not sufficient to sustain more than a few specialty DSC firms. Itis certainly not large enough to warrant the investment that has been poured into DSC PVdevelopment over the last decade.Thus, most of the DSC module makers are targeting BIPV applications for mid-termcommercialization. BIPV presents a much larger area for DSC, hence much greater revenuepotential for DSC – large enough to recover the already-sunk investment costs, and largeenough to enable the cost-reducing economies of scale still sought in the DSC community,including for the materials suppliers that really need higher areas to build a decent revenuestream. NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
  8. 8. www.nanomarkets.netMost of the key DSC firms are targeting the latter half of 2013 and 2014 for ramping up ofproduction and getting into the BIPV market. Today’s efforts at key firms – G24i, NLAB, OxfordPV, Solarprint, DyeTec Solar, Dyesol-Tata, etc. – involve process improvements, scale-upactivities, and increasing cell sizes. If they are going to meet their BIPV commercializationtimelines, then the next two years will be critical to their success. Page | 8NanoMarkets projects that they will be successful, and the on-grid market for DSC PV,dominated almost exclusively to BIPV applications, will grow from its current market value ofjust under $4 million to over $4 billion by the end of the forecast period.To get there, the DSC firms will have to convincingly solve at least one outstanding technicalhurdle, namely lifetime of BIPV modules based on DSC. Lifetimes of expensive architecturalproducts like BIPV panels must be much longer than for consumer products. A simple solarcharger might be expected to last a few years, whereas BIPV panels are considered part of along-term investment, and thus are expected to last nearly as long as conventional PV modules. E.2.2 Lifetime and Encapsulation: The Next Big HurdleLifetimes of DSC PV modules are very much related to the quality of the encapsulation, so wethink that integrating high performance encapsulation technologies with sufficient performanceto enable BIPV applications will be the next big task that the DSC community will take on.BIPV applications will require encapsulation strategies that can guarantee 20+ year lifetimes.Fortunately, the BIPV application is expected to be less cost-sensitive than many other PVapplications, especially in the early years, because the cost of the PV module is incorporated intothe cost of the architectural panel.The lower cost-sensitivity means that the DSC community can opt for any number of relativelyexpensive encapsulation technologies to achieve the required performance. For example,when it is not possible to rely on the inherently high barrier properties of glass, such as inflexible DSC PV formats, dyad encapsulation films will see increased adoption. And, fortunatelyfor DSC PV firms, better dyad encapsulation schemes have emerged over the last several years,especially out of the organic light-emitting diode (OLED) market, where the barrierrequirements are orders of magnitude more strict than in DSC PV. E.2.3 The Importance of Solid-State Electrolytes to the Long-Term Success of DSCOne of the key remaining manufacturability and durability drawbacks to DSC PV technology isthe current reliance on liquid electrolytes. Most, although not all, of today’s firms publicly NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
  9. 9. www.nanomarkets.netdeclare that current edge-sealing and encapsulation technologies are sufficient, and thatmaterial handling is manageable.However, most also acknowledge that for the long-term, a move toward the use of less volatileelectrolytes would enable longer product lifetimes and easier – perhaps even printable – Page | 9production methods, at greatly reduced costs. At this time, although DSC firms have expressedinterest in or intention to explore development of solid-state electrolytes, only Oxford PV hasactually made it a key feature of its commercialization plans.E.3 Could DSC Be A Potential Revenue Generator for Large Materials Companies?While the DSC module makers look like they will have a significant addressable market drivenby both existing applications and by early commercialization projects for BIPV, the materialssuppliers are in a decidedly less secure position.  First, materials suppliers are always at a disadvantage. By definition, they reside on one of the lowest rungs of the value chain, and they are almost always under pressure to provide reductions in the bill-of-materials (BOM) for their customers. In electronic materials, in the early years, materials prices remain high in order to recover investments, and to at least partially make up for low sales volumes. But the expectation is that prices will be reduced significantly as sales increase.  More importantly, the widespread commercialization of DSC will depend upon the module makers’ abilities to achieve higher efficiencies and reduce area-per-watt values in order to get their costs down to levels that allow DSC to compete in the wider PV markets. This type of development hits the materials suppliers doubly hard, as improvements in efficiency – demanded by their customers – lead to reductions in cell area and lower volumes of materials required, thereby depressing growth rates for the materials even as the larger DSC market expands.Given this state of affairs, it is not surprising that key DSC materials firms, Dyesol in particular,are facing a difficult couple of years ahead. As noted above, the off-grid market is not largeenough to be considered a source of major revenue from materials in the next two to threeyears, which is before BIPV applications become a bigger part of the market. Specifically,NanoMarkets projects that the DSC-specific materials (i.e., excluding substrates andencapsulations technologies) will not exceed $100 million until at least 2015, and will onlyreach a value of about $435 million by 2019.So, how will the materials suppliers survive? As we review in the main body of this report, wethink that Dyesol in particular is on shaky ground, and we are not certain it will survive long NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
  10. 10. www.nanomarkets.netenough to benefit from the rise of BIPV, at least not without outside help. Outside help couldcome in the form of additional government or shareholder investments, which will be hard tocome by in the currently political and economic climate, and/or by investments from one of itscurrent commercialization partners, like Pilkington/NSG or Tata Steel. [If Dyesol goes under,what happens to these JV partnerships is unclear, but we are fairly certain that they would go Page | 10on in some form or another, but with a new supply chain.]Alternatively, one of the larger materials suppliers may decide to expand into the DSC market ina serious way. Here, we are thinking about the big materials firms that already have existing PVmaterials business lines – BASF, Merck, Umicore, etc. – that could choose to enter the marketas a way to expand and diversify their existing PV product lines.But will they? Is the market really big enough, even if BIPV meets expectations, for them totake notice? We are not sure, but we do think that these firms have the large-firm luxury ofbeing able to “wait and see” how the market develops before making any big moves. As such,we think there are two distinct possibilities:  If the DSC market exceeds expectations, or if it looks like it will take off, one of the large materials firms may decide to expand its DSC strategy. In this case, it might, for example, view Dyesol as a promising takeover target, and if it waits for the right time, it may be able to obtain the startup for a very low cost.  Of course, the opposite could also happen. If DSC turns out to be disappointing from a long-term performance and sales perspective, the large firms could pull their DSC products without much impact on their overall business.E.4 Summary of Eight-Year Forecasts for DSCExhibit E-1 contains NanoMarkets’ eight-year forecasts for DSC materials, broken out by DSC-specific materials, which include dyes, catalysts, titania, electrolytes, etc., and “other”materials, which includes the substrates and encapsulation technologies.Exhibit E-2 contains NanoMarkets eight-year forecasts for the DSC PV market, showing poweroutput and market value (at the application level) by application. NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
  11. 11. www.nanomarkets.net GRAND TOTAL: Summary of DSC Market Value by Application 2012-2019 ($ Millions)5,000.04,500.0 Utility-Scale DSC Page | 114,000.03,500.0 BIPV/BAPV Roofing, Siding, & Related3,000.0 BIPV/BAPV Glass2,500.02,000.0 AIPV1,500.01,000.0 Embedded Device Power 500.0 0.0 2012 2013 2014 2015 2016 2017 2018 2019 Portable Charging© NanoMarkets 2012 Year GRAND TOTAL: Market Value of DSC PV 2012-2019 ($ Millions)5,000.04,500.04,000.03,500.03,000.02,500.02,000.01,500.01,000.0 500.0 0.0 2012 2013 2014 2015 2016 2017 2018 2019© NanoMarkets 2012 Year NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259

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