Where the sun shines

By Davide Ghilotti
Published: Saturday, 21 May 2016

The solar photovoltaic (PV) industry is at last experiencing its heyday after decades spent at the periphery of the energy market.

With solar growing at arguably its fastest pace in history, the sector needs an ever-rising supply chain, creating a plethora of business opportunities for everyone involved, including industrial minerals suppliers.

It has hardly been a better time to be active in solar. With the discourse on climate change coming to the fore, the requirement to reduce global carbon emissions and dependence on fossil fuels, solar technology has gained the role of must-have solution in energy requirements.

The technology has been around for a long time: the first prototype solar cells date back to the 1950s. Through the photovoltaic (PV) effect, light is converted into electricity as it goes through the PV cells. The current is then harnessed through conductors and taken where it needs to go. What makes this method environmentally friendly is that it does not require fuel to burn and has no moving parts such as turbines, thus having zero emissions.

The range of opportunities that the so-called 'green revolution’ may generate are already here for all to see. In the first week of May, at around 11am on Sunday, 90% of Germany’s entire electricity demand was covered by renewable power – solar, wind, hydroelectric and biomass. For a few moments, 55 out of the total 58 gigawatts (gw) needed to power the country came from renewables. Under standard conditions, not more than one-third of demand is covered through these sources.

This could be considered purely symbolic, but the capacity will keep increasing. Germany aims to phase out all its nuclear power plants by 2023: this large vacuum in supply will have to be filled somehow.

There is no doubt that solar and other renewables have to drastically up their game for the world economies to move away from fossil fuels. Solar now supplies only about 4% of European electricity demand. The pace of growth, however, should not be underestimated: last year, $161bn were invested in solar worldwide, more than gas and coal combined.


Oregon Department of Transportation/Flickr


The capacity of new global gridconnected PV systems increased 25% in 2015 year-on-year, according to the latest SolarPower Europe annual report. Solar in EU countries grew by around 15%. 

Today, there are 229 gw of solar capacity connected to the global energy grid, evidence of a growth rate that SolarPower Europe deemed "impressive".

Europe has a combined capacity of some 92 gw of solar power. Germany is the dominant producer in the bloc by far, generating almost 40 gw on its own. Italy is the second-largest producer, although at half the size of Germany, with 19 gw nationwide. The UK, France and Spain follow in this order with, respectively, 9 gw, 7 gw and 5 gw.

While the sun shines on solar, other energy sources are going through hard times.

Coal is arguably the utility sector experiencing the toughest phase at the moment. In the US, 50 coal companies have filed for bankruptcy since 2012. Burning coal is one of the most polluting ways to generate energy. Low oil prices are squeezing coal suppliers, overcapacity is denting returns and, on a broader level, energy is moving away from obsolete coal-burning to the opposite end of the spectrum – of which solar is a core part.

Minerals in PV

The development of the sector is necessarily interlinked to the input of minerals and metals manufacturers, who supply the key materials that make up PV panels and make them work.

These include bauxite for the aluminium for the panel structure but, more importantly, silicon, the basic component of the cell.

The panel is in itself a fairly straightforward structure: a series of cells connected through electrical wiring to external circuits (batteries, inverters and the like), which are fitted onto an aluminium frame.

Today, the most common solar cells are made of crystalline silicon. Two broad product lines make up the bulk of supply: monocrystalline and polycrystalline silicon.

Silicon thin-film cells are a third, less common technology that manufacturers use. Through thin-film, the amount of active material needed in a cell is lower than average, making them cheaper and lighter. This however carries a lower efficiency compared with crystalline silicon. 

Amorphous silicon is the main thin-film technology used today. Only a handful of producers are active in this segment, partly due to the limited lifetime of thin-film products. The category is expanding but has the lowest presence on the market.

Shifting equilibrium: Europe and Asia

The growth of the renewable energy industry across the board has created new opportunities for anyone involved.

At the same time, this has come at a price which, for silicon cell and solar panel manufacturers in Europe, was in the shape of aggressive competition.

The composition of the PV manufacturers market has changed significantly over the last few years, chiefly driven by Asia – with China in the lead – coming to the fore as a leading producer, consumer and exporter of solar cells. 

The competition from Asia weighed heavily on Europe, which in a matter of years has been pushed to the fringe of the market.

"There was a crisis in the European market, which was due to the decrease of prices from Asia, [specifically] China and Taiwan," Javier Herrero, technical engineer at Eurener, one of Europe’s largest solar panel producers, told IM

"The majority of European [solar cell] producers have closed in the last three years. European cell supply has fallen drastically: they are now hard to find and pretty expensive."

China and Taiwan today supply the majority of silicon solar cells to Europe; as European companies have closed, Chinese ones have opened and expanded.

The drastic change in the composition of the market affected also industrial minerals operators supplying the PV sector, who saw the number of their European customers sharply reduced.

Multinational company Washington Mills is one of the leading suppliers of silicon carbide (SiC) products globally. Headquartered in the US, its Norwegian operation, Washington Mills AS, is the largest producer serving the European market, supplying SiC microgrits and powders. Solar has been an end user of the company’s products for almost 20 years, and today accounts for a sizeable amount of the overall business. 

"Five-six years ago there was a huge market in Europe. Then the European solar industry almost collapsed," Ole J Svorkdal, managing director at Washington Mills AS, told IM. "In 2011-2012, that almost made us close our production of microgrits."

As demand in Europe took a hit, so did prices. Competition with China, although indirect in the case of Washington Mills, has affected benchmarks for SiC products going into solar. Downward price pressure has continued, although some stabilisation has been seen since the closing months of last year.

"In 2011, the Chinese had a huge underutilised capacity, [but] today there is better balance between actual capacity – also in China – and actual demand. The market has continued to grow, and global demand is still increasing," said Svorkdal. 

Better products, lower cost

Despite the effect it had on Europe’s solar cell producing segment, the shift was instrumental to re-position the industry up a notch. With Asia entering the picture big time, this brought about an increase in total cell supply together with a decrease in costs and quality improvements.

"Over the last five years, there has been a significant decrease in terms of costs," said Eurener’s Herrero. "There is no problem in sourcing cells today. On the contrary, they are very much available and of better quality."

A main driver that has allowed the industry to up its game has been the evolution in cost-effectiveness of the products: better quality at a lower cost.

Efficiency has been a crucial part of this. The sector went through a quantum leap in efficiency in a relatively short time. If in 2010 typical cell modules would deliver 220w, today the same modules generate 260w, or 18% more.

"Modules today have a much better quality than five years ago, cost half of what they used to and are 15-20% more efficient," said Herrero.

The rise in global demand led to more investment coming in, which in turn allowed the supply chain to expand at the rate it has.

Far from standing still, the sector is constantly improving and moving the goal posts further ahead, in the wake of technology upgrades. 

The scale of efficiency is still increasing from its current standards. Panels that generate up to 300w are already available, and they are the same size as the others.

"We are going to see more developments, reaching more performance for the user," said Herrero.

Important developments are taking place in the field of energy storage as well. This is evolving as battery capacity and durability extends, new operators come to market and as storage solutions are offered together with PV systems by suppliers. 

There is then the world of existing research in new materials. Developing applications to apply perovskite solar cells in PV panels is one of many worth mentioning. The efficiency of perovskite cells has gone from 3.8% to 21%, almost reaching the highest level available today – that of the established copper indium gallium dieselenide (CIGS) cells (21.7%). According to Lux Research, perovskite cells should be on the market by 2019.

The ongoing product development needs SiC suppliers to meet ever-changing requirements, Svorkdal told IM, adding that Washington Mills is modifying its product specs, such as the shape or size of the powders, "all the time". 

The same can be said for solar panels manufacturers. In their case, it is certificates and norms that keep changing, as countries adjust the regulations for PV installations. These set the standards for installation of the structures, health and safety, recycling capability of the panels and other aspects.

Adhering to regulations requires a substantial amount of work on the part of producers, since codes of practice are often different from country to country. 

The future is bright

Operators reckon that the extended PV systems portfolio, lower overall costs of production and sale, and governments gradually jumping on the solar bandwagon will allow for further expansion of the customer base using PV energy.

One of the main trends forecast is the spread of small-scale installations in private buildings, be it homes or businesses, for own energy consumption as a way to reduce energy costs. 

According to Eurener, PV will be seen mainly as a cost-saving resource rather than a generator of returns or a commercial operation, such as the large solar farms that have been set up in cities’ outskirts. The focus will gradually move away from large-scale installations towards a smaller-scale, private model aimed at self-consumption.

This would make for a proliferation of the technology and, operators hope, will lead to a new norm, with solar applied in everyday energy needs.

"Global demand increased a lot, and will increase further," Herrero said. "Having a PV installation will be like having a fridge."