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Can Solyndra's Breakthrough Solar Technology Outlive the Company's Demise?

The politically charged investigation into Solyndra's collapse has overshadowed the fact that the fate of a groundbreaking technology hangs in the balance.

Sep 20, 2011
Installation of Solyndra’s cylindrical solar module design

The politically charged investigation into the collapse of Solyndra, the California solar start-up that received millions of dollars in federal loan guarantees, has overshadowed the innovation underway at the firm's recently shuttered facility. Now, as Solyndra executives search for a buyer, the fate of their cutting-edge technology remains uncertain. 

Back in 2005, when solar energy was on the brink of today's boom, Solyndra set out to produce a lower-cost alternative to panels made with crystalline silicon, a century-old photovoltaic (PV) technology that uses polysilicon to produce solar cells and wafers. At the time, polysilicon was scarce and expensive, which meant that solar panel prices were high. So Solyndra invested in a nascent thin-film solar technology called CIGS for the copper, indium, gallium and selenium elements it contains.

Thin-film technologies, which were initially used as small strips on handheld calculators, had been around for a couple of decades, although CIGS was one of the latest players to emerge. Thin-film solar panels are generally less efficient than crystalline silicon panels at converting sunlight to electricity, but they are lighter and easier to install.

What set Solyndra apart from its thin-film peers was the shape of its modules. Instead of using a flat-plated panel, it coated tubes of glass with its CIGS technology and mounted the cylinders to metal frames. When installed on commercial rooftops that were painted white, the tubes could absorb direct and reflected sunlight from 360 degrees. Flat panels receive sunlight only when it shines overhead. 

Solyndra's cylindrical modules could also be installed faster than flat panels and were highly resistant to wind. Dirt and snow can build up on traditional modules and keep out the sun. But the elements fall through the gaps in Solyndra's rows of cylinders.

Nicolas Gourvitch, a director at Green Giraffe Energy Bankers in Paris, a financial advisory firm, described Solyndra's technology as "groundbreaking" and "innovative."

Shayle Kann, managing director of solar research at GTM Research, said "the hope was that it would drive lower costs" in the overall expense of installing and maintaining a solar system. GTM is a green technology research firm with offices in the United States and Germany.

But Solyndra struggled to realize that vision.

When it closed, it was still improving its thin-film technology, which couldn't yet convert as much sunlight to electricity as its crystalline silicon competitors. And the racks of cylinders that are so well suited for large, flat industrial rooftops weren't ideal for homes with angled roofs or for ground installations, which can't be painted white.

The speed with which Solyndra could install its modules would have had a significant impact on the economics of industrial projects, Gourvitch said, but such projects aren't yet widespread to create the demand for panels that the company needed.

In the United States, for instance, commercial building owners have little incentive to invest big bucks in solar systems. The solar lease—a financing tool that allows consumers to obtain solar systems by paying only for the electricity they produce, not the installation—is offered primarily to homeowners or small shops. Utilities, which are often required to get a portion of their electricity from clean power, often opt for hundred-megawatt solar farms to reach economies of scale.

Solyndra "tried to compete in today's market with the product of tomorrow," Gourvitch said. "They were too ambitious and confident in their capability to attract financing [quickly], their production cost were still too high, and their market still a niche."

On Aug. 31, Solyndra suspended production at its Fremont facility and laid off some 1,100 employees. It had installed more than 1,000 modules, or 100 megawatts of solar capacity, in Europe and the United States, according to the company’s website, a drop in the bucket compared to the installed capacity of leading solar manufacturers.

Solyndra attributed its financial failure to a global glut of solar panels and a dramatic drop in prices, largely the result of scaled-back incentives programs in Europe and generous manufacturing subsidies in low-wage nations like China.

According to an Associated Press review of Solyndra's regulatory filings, the firm had already lost hundreds of millions of dollars when the U.S. Department of Energy awarded it a $535 million loan guarantee in 2009. (It eventually received $528 million.) The company was simply spending far more on its technology than it was earning.

Solyndra is now contacting 100 potential buyers in an effort to reopen its eight-month-old factory. Last week it set an Oct. 25 deadline for potential bidders to either take on the entire company or its individual assets, including specialized equipment for module manufacturing and possibly its unique thin-film technology.

But the solar industry has changed so much since Solyndra opened in 2005 that prospective buyers may be wary of taking on such a risky bet.

Global polysilicon supplies—one-quarter of which are made in the United States—have caught up with rising demand, reducing prices from a high of $500 per kilogram in 2008 to about $50 today. That price reduction, combined with a Chinese manufacturing boom, lowered the overall cost of panels by 40 percent this year, making it even more difficult for developing technologies to compete.

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