After a large number of companies developing thin film PV panels got huge amounts of venture capital funding between 2005 and 2008, a handful are now emerging with viable products.

Thin film PV panels are manufactured in a radically different way to traditional crystalline silicon PV panels.  This means they have the potential to be dramatically cheaper than regular panels because the manufacturing process is faster, uses less energy and requires fewer raw materials.  Despite this promise, thin film PV has a number of drawbacks.  The mains ones are efficiency (thin film PV tends to 11% efficient at best compared with 16% for crystalline silicon) and reliability (early thin film panels showed signs of degradation).

Since the thin film companies got their money a few ago, many have fallen by the wayside.  Setting up a thin film solar factory requires huge amounts of capital so a lot of companies just ran out of money and couldn’t convince investors to top them up with cash.  On the other hand, there are a few who managed to actually complete their manufacturing lines and start producing solar panels.  Unfortunately there is still a long way to go before the solar panels can be sold once that stage has been reached however.  In all markets, solar panels are now seen as a long term investment.  This means that investors need to have absolute confidence that the panels will last through their warranty period (usually 20 or 25 years).  Proving reliability is no easy task.  The panels have to go through months of intense testing, and many banks require at least 2 years of real field data before agreeing to lend money to projects involving those panels.  This means there is a long, long wait before these manufacturers can actually sell panels in any large quantities.

Up until recently there were only one, or possibly two, thin film PV companies that had reached that point, the most notable being First Solar who are one of the two largest solar manufacturers of any kind worldwide.  It seems that after all this time there is now a small selection of companies who may be about to join this list.

For me the front runners for this are the Californian company Miasole, the Japanese manufacturer Solar Frontier, and possibly the German company Q Cells with their Q.Smart thin film panels.  Miasole have just announced a large sales contract with the well respected German distributor Phoenix Solar on the back of two years of testing at their Bavarian headquarters.  Solar Frontier have announced a range of lucrative sales contracts around the world which should mean their panels should start to be seen much more widely in the near future.

There is still a long way to go before we know if people will start choosing silicon over thin film panels.  They still have a lower efficiency, which means they have to be sold significantly cheaper than higher efficiency panels, but it could be that the manufacturing costs are so much lower (once they get to large scale production) that the thin film PV companies are still able to make a good profit when selling at much below current prices.  Whether thin film PV enjoys rapid success or not, from now on there will be significantly more thin film PV companies to choose from.

Last Friday (24^th September) news broke on the Coalition government’s decision to back down on their promise of retroactively granting the feed-in tariff to 6000 ‘pioneers’ who installed PV before the feed-in tariff was announced.  This is undoubtedly unfair since those pioneers were responsible for keeping some semblance of a UK PV industry alive in recent years whilst the industry was booming elsewhere in Europe.  In light of the government’s austerity measures however, I do not consider it an outrage that these few people are denied the FiT.  Early adopters of renewable energy are unlikely to be in the lowest paid income bracket and at a time when many public sector workers face redundancy the government can argue that they have more pressing issues to deal with.

What is concerning however, are unconfirmed reports that the government is thinking of changing of lowering the feed-in tariff before April 2012.  This would be extremely unwise.  Feed-in tariffs are a success because they offer investors (whether banks or families) some foresight as to how much they stand to make. Solar panels are very much a long-term investment, and feed-in tariffs work because you can predict how much you will earn in year 25 of the investment as well as in year 1. Therefore, by changing the planned feed-in tariff degression schedule at short notice, investors lose confidence very quickly. How can a homeowner plan to have a PV installation when the feed-in tariff could be lowered in a month? How can a PV installation company forecast its installation schedule and hire someone if the feed-in tariff is to be changed next month?

Feed-in tariffs are designed to be significantly reduced every year – that’s to reflect decreases in the installed cost of PV systems and ensure that investment returns remain broadly consistent. Everyone knows that the feed-in tariff in the UK is due for its first degression in April 2012, but suddenly changing that schedule will disrupt innumerable business plans and threaten jobs. The feed-in tariff is designed to be decreased, I have absolutely no problem with that, in fact it probably didn’t need to be as high as it is to start with. The problem is only with unscheduled decreases as these cause havoc with the industry.  The UK already has an extraordinarily tiny PV industry in comparison with other major European countries.  By threatening to deviate from the planned degression schedule only 4 months into the scheme threatens to de-rail the beginnings of an industry that could employ tens of thousands of people in the UK.  Already this year the number of installations has dramatically increased as a result of the feed-in tariffs. However, the UK is forecast only to install around 15MW this year. This pales in comparison to Germany’s expected 8GW – its a factor of 500 difference!!

It is possible to build in flexibility into a feed-in tariff policy that controls market growth without causing surprises. In Germany, the annual feed-in tariff degression is now tied to the market size in the previous year. That means if the market is over a certain size then the degression will be more than normal, and if the market is smaller than targeted the decrease for next year will be less.  The UK government have not said anything about their intentions for April 2012. They would be well advised to start thinking about it now, rather than waiting until the last minute as they did before the feed-in tariff was introduced.  Using the German model, feed-in tariff policy could be set until the next general election, this would stand the UK in good stead.

No-one wants a boom-and-bust industry. The UK government should take measures now to reassure the industry that it is following an organised and planned strategy.  Rumours of sudden changes, whether real or imagined, could do more damage than many realise.

Solar panels are by far the most expensive item in a solar panel installation. Understanding the features that differentiate a good solar panel from a bad one is not so straightforward. In several instalments I’d like to give a guide to each of the key criteria to look out for. I will try keep it as simple as possible but it is something that many people ask me about so I think it isn’t a bad idea to discuss these issues in some depth.

First of all I’d like to discuss solar panel efficiency. This defines how effective a solar panel is in converting sunlight into electricity for a given surface area. The advantage of having a higher efficiency solar panel is that you can get more power out of a small available area. For this reason, high efficiency solar panels are normally priced at a premium and targeted at the domestic market where space is most constrained. High efficiency does not necessarily mean better quality or reliability however – these issues are covered later. Nor does higher efficiency mean better value; in many cases lower efficiency panels are used because they are more cost-effective in places where space utilisation is not so critical.

First of all, how do you find out the efficiency of a solar panel? It’s easy to find out this out for yourself. Remember that the power of a solar panel is given by the power you get out under ‘standard test conditions.’ This means the output is measure when the panel is exposed to a very bright light with an intensity of 1000 Watts per square meter (1000W/m2) at a temperature of 25oC. This is normally expressed in Watts (e.g. 185W or 230W etc) and is the power you will get when the sun is very strong. You can then multiply the module length and width (which is shown on the datasheet) to get the module area. By taking the module power in Watts and the standard test conditions of 1000W/m2 you can determine the module efficiency as follows;

Efficiency = power out / power in = module power / (width x length x 1000W/m2)

When evaluating solar panel efficiency its important to be aware that each solar cell has an efficiency higher than that of the whole solar panel (or module) due to empty space. Therefore make sure to find out which value you are looking at.

In general solar panels you will come across in the UK will be made of silicon (I have discussed thin film panels previously) so the discussion here will focus on these. The highest efficiency silicon solar panels on the market today are between 17% and 18% efficient. The efficiency of silicon solar panels is increasing due to R&D, but improvements are incremental and slow because there are a number of fundamental limitations to the efficiency of silicon solar cells which mean that any drastic improvements in the near future are unlikely. Perhaps I will describe those limitations in another article.

The main factor you will come across that affects module efficiency is whether the module is mono or multi-crystalline. In English this means that the solar cells can easy be made from mono or multi-crystalline silicon. Mono crystalline solar cells consist of a slice of a single, very pure silicon crystal and hence are very efficient due to few defects. Multi-crystalline solar cells, which comprise multiple crystals, are around 1-2% less efficient but are generally more cost-effective to produce. Personally I think it generally makes sense to use mono-crystalline cells for domestic installations where space is at a premium and multi-crystalline cells for larger installations.

Another factor that can affect efficiency is anti-reflective coatings. These are becoming more and more common. Nearly all solar cells have texturing directly on top of them that reduces reflection and now many solar panels come with anti-reflective glass. This generally consists of a textured glass that can be seen as a speckled pattern if you look closely. The improvement of anti-reflective coatings is hard to determine, although some manufacturers claim energy yield enhancements of over 5 percent.

When installing a solar panel system your ultimate goal should always be to get the best return on your investment, which means getting the most power for the lowest price without risking reliability and is dependent on many factors besides efficiency. Whilst there are a number of other technologies on the horizon that can be used to improve efficiency by small amounts, nothing will create a drastic change overnight. Prices of solar panels will continue to fall rapidly as production volume increases (in the same way as many other technology products such as computer memory) but these price falls will be matched by reductions in the feed-in tariff. Therefore don’t worry that installing today’s technology risks being superseded by a miracle solar panel tomorrow. Working in the industry gives you pretty good insight as to what is coming down the line.

Market research and consulting firm, iSuppli has released a report showing the UK as the world’s fastest growing solar market in research looking at solar uptake since last year.

Good news indeed for UK solar and exactly the kind of market reaction which was expected following the announcement of the introduction of feed-in tariffs by the Department of Energy and Climate Change. While the cynics among you might point out that the UK was starting from the lowly figure of 6MW of output in 2009, it in no way detracts from growth figures of 1500 per cent, up to 96MW this year.

Feed-in tariffs, introduced in April 2010 work by offering fixed, guaranteed rates for small scale producers of renewable energy both for the energy they use and the surplus energy fed-back into the grid. The power companies are obliged by the legislation to buy the units of electricity at the top rates, the costs of which are passed onto the consumers.

In areas such as Germany, California and Spain, tariff systems have been an extremely effective way of generating investment interest in new renewable industries, traditionally perceived as unviable. Indeed, the annual Ernst & Young Investment Attractiveness Indices consistently ranks those countries with strong tariff legislation as the most attractive for renewable investors looking for good returns on their capital.

The UK growth is such that it has outstripped that of Spain, a mature solar market whose growth only tipped 730 per cent.

Dr Henning Wicht, Director of iSuppli commented that,

“Things definitely are looking brighter for the solar market in the United Kingdom in 2010, as the country has adopted attractive Feed-in-Tariffs to promote PV adoption. Furthermore, with leading solar country Germany cutting its FITs, the focus of the PV world is shifting to places with more favourable incentives, making the United Kingdom a solar hotspot this year.”

With tariff legislation now in place and growing consciousness of the viability of renewable energy, it is expected that the UK solar market will continue to grow albeit at the more steady rate of 50 per cent. The iSuppli study estimates that the UK market will reach 214MW by 2012 and 501MW by 2014 helping the UK to go along way to meeting its carbon reduction targets and building the foundations of a strong renewable energy industry capable of competing with the like of Spain and Germany.