Dye Sensitized Cell Markets – 2012

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Dye Sensitized Cell Markets 2012
Nano-531

Published April 2012

© NanoMarkets, LC

NanoMarkets, LC
PO Box 3840
Glen Allen, VA 23058
Tel: 804-270-1718
Web: www.nanomarkets.net

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259

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Entire contents copyright NanoMarkets, LC. The information contained in this report is based
on 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 companies
and 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 permission
of NanoMarkets, LC.


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Executive Summary

E.1 How Things Have Changed in the DSC World Since Our Last Report
In a couple of key ways, last year was a breakthrough year for dye-sensitized (solar) cell (DSC) Page | 3
photovoltaics (PV). Technical achievements have brought DSC PV into the realm of several
inorganic PV technologies, and the DSC industry has moved out of its pure R&D stage into early
commercialization. It is now a real, albeit small and emerging, business.

Until recently, DSC was lumped together with organic PV (OPV) technology, and both were
considered suitable only for very small-scale, expensive, and low-efficiency applications. But in
the last year, development and commercialization of DSC has clearly outpaced that of OPV. In
NanoMarkets’ opinion, the success of DSC may be attributed to the fact that it is simply a more
robust technology. It is less dependent upon pristine, flat, thin material layers, and it is less
inherently 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 DSC
modules 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 of
the problem is, of course, typical of all fledgling industries; it takes time and effort to scale-up
and successfully commercialize a new technology. And part of the problem is related to the
recent difficulties in the overall PV industry, which is struggling right at the time when DSC
could 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 DSC
modules, at the application level, will grow from about $40 million in 2012 to over $500 million
by 2015. Then, after building-integrated PV (BIPV) applications for DSC take off, we anticipate
that 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
Percent
On the efficiency front, nearly all DSC firms have made improvements, but two recent
announcements stand out as particularly important to the future of the DSC industry, namely
from industry-leading UK-based firm G24 Innovations (G24i) and from Japanese firm Fujikura.


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First, G24i announced a record-setting 26 percent average conversion efficiency in an
indoor/energy-harvesting cell fabricated using a new dye and electrolyte material set from
development partner École Polytechnique Fédérale de Lausanne (EPFL).

The new cell was also enabled by incorporating G24i’s in-house developed new transparent Page | 4
electrode technology, which is purported to have very low surface resistance (less than 5
ohms/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 is
also 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 firm
to greatly expand the design possibilities for its products, and make electrical integration and
voltage conversion simpler than in previous-generation products.

However, our enthusiasm is tempered a bit by the fact that much is still unknown about this
technical 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 make
additional announcements on this front over the next year.

Separately, Japanese firm Fujikura announced the development, and pilot production, of an 18
percent average efficiency cell, also designed for low-light environments, such as would be
found in home/business temperature and humidity sensor applications and the like. This
development is also a significant achievement, and the firm has made a prototype module to
demonstrate the technology. However, Fujikura has not yet taken any big steps toward moving
this technology into a commercial product line, and the project’s management remains at the
R&D level.


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But Fujikura is a large enough firm, with sufficient financial resources, to fairly rapidly ramp up
production of the technology if it determines that DSC could represent a significant revenue
stream. 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 | 5
EPFL and status as the only DSC module maker shipping significant product, its access to capital
for a big commercialization push may not be as easy as for an established (and profitable) firm
like Fujikura.

We concede, however, that since G24i is a privately held business, we cannot be certain about
its financial and cash flow situation. It may very well be positioned to implement its business
plan with ease. It has not announced any major funding activities since 2008, when it raised
about $50 million. With that investment, along with ongoing revenues from sales of its
products, it may still have plenty of cash-on-hand to implement its latest technical
development.

And the bottom line is that, even if G24i is able to only achieve half of the lab-scale efficiency
on its production line, that would still be a big step forward in the marketplace, whereas
Fujikura would have to achieve at least three-quarters or so of its lab/pilot-scale efficiency to
constitute a major breakthrough.

E.1.2 The Effect of a PV Industry in Crisis
As we indicated above, the DSC industry is also coming of age as the overall solar energy
industry is in crisis. While DSC’s status as a “third generation” PV technology provides it some
immunity from the goings-on of the wider, conventional and utility-scale PV market, DSC will
not escape completely unscathed. Growth in the DSC industry must thus be seen in the context
of the wider market, and so we have moderated growth rates for DSC compared to projections
in previous years.

In particular, problems in the PV market are clearly affecting the DSC industry’s ability to raise
investment 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.


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 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 of
the technology. Page | 6

Government funding should also become more difficult to obtain. First, many cash-strapped
governments may simply choose to fund fewer technology projects. Second, even those DSC
firms that live in countries where governments continue to fund alternative energy projects
may 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 to
raise capital. Those businesses that have already been around for a few years and have
something to show for it – like G24i, NLAB, etc. – are in a slightly better position, but will still
have to work doubly hard to make their case. The case is, of course, there to be made; DSC
components are inherently cheaper to manufacture than anything involving silicon wafers, and
it 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 marketing
and business development strategy. Most firms have backed away from touting only champion
cell, peak-power/full-sun conversion efficiencies. Instead, the narrative for DSC now focuses on
its 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 particularly
important to the emergence of DSC, and to getting DSC to the late development/early
commercialization phase in which it currently resides. Indeed, over the next few years, we think
the additional near-term opportunities for revenue generation in DSC will be found mostly in
these 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 to
penetrate; they are the low-hanging fruit of the PV world. They have significantly lower
technical requirements, in terms of efficiency and lifetime, and they face less competition and
cost-sensitivity than the larger-scale and conventional applications.


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In addition, the market for these applications is growing, if for no other reason than that the
market for consumer electronics continues to grow, and it has increasingly lower power
requirements 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 | 7
could 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 big
way, partly because the costs and availability of DSC PV are just recently getting to a point
where they can reasonably be incorporated into consumer electronics devices, but also, we
think, because of a lack of really sizeable market pull. (Disposable batteries, despite their
inconvenience, are cheap and easy to use, and plug-ins for recharging of the non-disposable
batteries 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-scale
manufacturing 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 PV
applications will grow from their current value of about $38 million to just over $400 million by
2019. In this area, the growth is largely driven by the expansion of the existing “portable
power” 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 $400
million, eight years from now, is not sufficient to sustain more than a few specialty DSC firms. It
is certainly not large enough to warrant the investment that has been poured into DSC PV
development over the last decade.

Thus, most of the DSC module makers are targeting BIPV applications for mid-term
commercialization. BIPV presents a much larger area for DSC, hence much greater revenue
potential for DSC – large enough to recover the already-sunk investment costs, and large
enough 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 revenue
stream.


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Most of the key DSC firms are targeting the latter half of 2013 and 2014 for ramping up of
production and getting into the BIPV market. Today’s efforts at key firms – G24i, NLAB, Oxford
PV, Solarprint, DyeTec Solar, Dyesol-Tata, etc. – involve process improvements, scale-up
activities, and increasing cell sizes. If they are going to meet their BIPV commercialization
timelines, then the next two years will be critical to their success. Page | 8

NanoMarkets 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 of
just 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 technical
hurdle, namely lifetime of BIPV modules based on DSC. Lifetimes of expensive architectural
products like BIPV panels must be much longer than for consumer products. A simple solar
charger might be expected to last a few years, whereas BIPV panels are considered part of a
long-term investment, and thus are expected to last nearly as long as conventional PV modules.

E.2.2 Lifetime and Encapsulation: The Next Big Hurdle
Lifetimes of DSC PV modules are very much related to the quality of the encapsulation, so we
think that integrating high performance encapsulation technologies with sufficient performance
to 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 PV
applications, especially in the early years, because the cost of the PV module is incorporated into
the cost of the architectural panel.

The lower cost-sensitivity means that the DSC community can opt for any number of relatively
expensive 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 in
flexible DSC PV formats, dyad encapsulation films will see increased adoption. And, fortunately
for 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 barrier
requirements 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 DSC
One of the key remaining manufacturability and durability drawbacks to DSC PV technology is
the current reliance on liquid electrolytes. Most, although not all, of today’s firms publicly


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declare that current edge-sealing and encapsulation technologies are sufficient, and that
material handling is manageable.

However, most also acknowledge that for the long-term, a move toward the use of less volatile
electrolytes would enable longer product lifetimes and easier – perhaps even printable – Page | 9
production methods, at greatly reduced costs. At this time, although DSC firms have expressed
interest in or intention to explore development of solid-state electrolytes, only Oxford PV has
actually 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 driven
by both existing applications and by early commercialization projects for BIPV, the materials
suppliers 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 large
enough to be considered a source of major revenue from materials in the next two to three
years, which is before BIPV applications become a bigger part of the market. Specifically,
NanoMarkets projects that the DSC-specific materials (i.e., excluding substrates and
encapsulations technologies) will not exceed $100 million until at least 2015, and will only
reach 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, we
think that Dyesol in particular is on shaky ground, and we are not certain it will survive long


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enough to benefit from the rise of BIPV, at least not without outside help. Outside help could
come in the form of additional government or shareholder investments, which will be hard to
come by in the currently political and economic climate, and/or by investments from one of its
current 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 | 10
on 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 in
a serious way. Here, we are thinking about the big materials firms that already have existing PV
materials business lines – BASF, Merck, Umicore, etc. – that could choose to enter the market
as 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 to
take notice? We are not sure, but we do think that these firms have the large-firm luxury of
being 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 DSC
Exhibit 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 power
output and market value (at the application level) by application.


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GRAND TOTAL: Summary of DSC Market Value by Application
2012-2019 ($ Millions)
5,000.0
4,500.0 Utility-Scale DSC
Page | 11
4,000.0
3,500.0 BIPV/BAPV Roofing, Siding,
& Related
3,000.0
BIPV/BAPV Glass
2,500.0
2,000.0
AIPV
1,500.0
1,000.0
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)
5,000.0
4,500.0
4,000.0
3,500.0
3,000.0
2,500.0
2,000.0
1,500.0
1,000.0
500.0
0.0
2012 2013 2014 2015 2016 2017 2018 2019
© NanoMarkets 2012 Year


Dye Sensitized Cell Markets – 2012

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