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Potential Limits to Solar Cell Manufacture

Solar power is all the rage2 in the energy markets because of the thin film revolution, which promises low-cost mass production of photovoltaic (PV) cells (Technology Review, July 27, 2007). Leading the way is First Solar, which uses cadmium-telluride thin-film PVs in its solar panels. Scientific American's solar "grand plan" cites cadmium telluride as the cheapest option today.

To provide electricity at six cents per kWh by 2020, cadmium telluride modules would have to convert electricity with 14 percent efficiency, and systems would have to be installed at $1.20 per watt of capacity. Current modules have 10 percent efficiency and an installed system cost of about $4 per watt. Progress is clearly needed, but the technology is advancing quickly; commercial efficiencies have risen from 9 to 10 percent in the past 12 months...

First Solar has its detractors, who "assert that the company could be hurt by limited supplies of raw materials in the future and increased competition." It turns out that tellurium is one of the nine rarest elements on Earth. Here's the smoking gun from altenergystocks.com—

In 2006, First Solar's 60 megawatts of production consumed 4% of the world's annual supply of [tellurium]. In 2008, analysts expect revenues of approximately 4x the 2006 number, meaning they will need approximately 16% of new annual Tellurium supplies.

60 megawatts is nothing, a drop in the bucket. So much for cadmium-telluride thin film. But what of the many other alternatives?

For four years now, purified silicon has been in short supply. See the Wall Street Journal's The Silicon Shake-Up (subscriber only, September 21, 2007). Polysilicon prices soared from $25/kilogram in 2004 to around $200/kilogram in 2006, and PV production growth has come to a virtual halt. Sharp, the largest solar cell manufacturer in the world, "produced panels that could generate 434 megawatts of electricity [in 2006], or the equivalent of a single gas-fired power plant, about the same amount it made in 2005." The shortage has spurred the thin film craze because investors are leery of the polysilicon supply & demand imbalance, even though thin film PVs are only 7-10% efficient in converting sunlight, as opposed to about 15% for commercial silicon PVs.

In the case of depletion, as with cadmium telluride, the optimist might also respond that there are other alternatives, such as the copper-indium-(gallium)-diselenide (CIS or CIGS) thin film technology being pursued by Siemens, Nanosolar or Global Solar Energy. The risk is that the current bullish commodities market may become a permanent feature of the economic landscape. Take the indium used in thin films. Resource Investor reports that—

The Earth is estimated to contain about 0.1 ppm [parts per million] of indium which means it is about as abundant as silver. However, bullish supply-demand fundamentals have propelled the price from US$70/kg in 2001 to over US$1,000/kg today.

Indium is produced mainly from residues generated during zinc ore processing but is also found in iron, lead, and copper ores. In recent years, supply has decreased after a number of Chinese mining concerns stopped extracting indium from their zinc tailings.

At present, about 75% of the indium in the world is used in the manufacture of Liquid Crystal Displays (LCD’s), in computer screens and the new generation of flat screen TVs. The LCD industry is expected to achieve growth rates exceeding 30% over the next three years.

Looks like the solar cell industry will not be efficient for the campaign to...........

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