Concentrated PV

Any other industry going through the market constraints affecting CPV would be ripe for consolidation. But the prospect of takeovers is dim due to disparities in technology. What shape is CPV taking today for its future success?

Last year was an interesting one for thin-film PV. As orders slumped across the board, the Chinese energy giant Hanergy snapped up two leading manufacturers that had fallen upon hard times.

Its first thin-film business purchase came in June 2012 when it bought the copper indium gallium diselenide PV module-maker Solibro off Q-Cells, a former German solar giant that had filed for insolvency in April.

Just as it was wrapping up the Solibro purchase in September, Hanergy opened its cheque book again to acquire former Silicon Valley thin-film darling MiaSolé, which had boasted a record aperture area efficiency on commercial-size flexible modules.

Such consolidation is to be expected in the current climate for solar, where the low cost of Chinese crystalline-silicon (c-Si) modules has created severe problems for other PV technologies. So why are we not seeing similar takeover activity in CPV?

There is no doubt that CPV is every bit as disadvantaged right now as thin film. Ed Cahill, an associate at Lux Research, says: “Current technologies need to prove they can get their module efficiencies higher. Modules need to be about 40% efficient to be fully competitive with c-Si.”

Currently, he says, module efficiency levels are hovering around 33%. The multi-junction cell maker Solar Junction could enable CPV to raise that level substantially, though, Cahill believes. The company’s lattice-matched cells already boast an efficiency of 44% at 947 suns.

Higher efficiency

“It can add a fourth junction fairly easily and it will still be lattice-matched,” Cahill says. “That gives Solar Junction a way to get higher efficiency; they are targeting 50% in the next five years. Then it is just a matter of tweaking the module.”

However, he adds, CPV players that do not use Solar Junction’s cells “will need to completely change their technology.”

And even those companies that do use Solar Junction products could find it hard to last out half a decade in wait for efficiency rises. SolFocus, formerly a major Solar Junction customer, made deep cuts in its workforce last November.

Back in March of this year SolFocus was closing in on its selection for a buyer for the business with a decision likely to take place by May, it was confirmed to PV Insider.

Following the company’s restructuring last November it was announced that the company was looking for a buyer. The company has confirmed to PV Insider that there are multiple companies in which the company is in diligence with at this time. At present, there is limited operational activity with the business building limited amounts of product to complete contracts and orders. The company is however meeting its commitments to customers on orders.

“We are actively engaged with potential acquirers, all of which are interested in the company in its totality including deployments, pipeline of projects, current technology and future road map,” Nancy Hartsoch, Sr. Vice President, Marketing and Sales, told PV Insider.

“The process of diligence, negotiations and closure are impacted by many factors including company size, process, geography, etc.,” said Hartsoch.

When asked if the company was currently toying with the idea of changing the business strategy, Hartsoch said that they were not looking at a different strategy per se, however, “depending on which acquisition occurs the direction of the business will certainly be aligned with the strengths and needs of the acquiring entity.”

It is likely, given the business wants a long-term investment partner, that the potential buyer will be a strategic one, however, no information about the interested parties will be made public until a deal is finalised.

In contrast to the situation in thin film, however, there are few takers for CPV companies like SolFocus. Players that have run into trouble, including GreenVolts and Skyline Solar, have had to simply shut up shop rather than being able to sell out to a third party.

In a recent , Amonix founder and chief technical officer Vahan Garboushian bemoaned the lack of corporate backers in the CPV market. Having a deep-pocketed parent would certainly make sense for CPV companies right now.

Practically all those that have folded were backed with venture capital. Meanwhile Soitec, which is a diversified manufacturing giant, has so far been able to weather the PV storm relatively well, recently even signing an agreement with Alstom to tap opportunities in the French solar market.

Different technologies

There would seem to be little point in Soitec acquiring its competitors, however, or indeed scant reason for any other solar player to buy up struggling CPV players. The reason is that different CPV companies have by and large gone to market with very different technologies.

Hence, while it might make sense for one c-Si manufacturer to buy another, in order to scale up capacity and orders, in CPV it is much more difficult for one company to bolt on another.

At most, a module maker might aspire to purchase a cell manufacturer or other supplier in order to improve integration along the supply chain.

Sam Wilkinson, a senior market analyst for PV research at IHS’s IMS Research, believes the current shakeout is somewhat inevitable. “In any market that has a large number of start-ups, you never see all of them succeed,” he notes. “We’ve already seen consolidation.

“We have seen the likes of GreenVolts pull out; there have been a number of exits. Amonix has lost a lot of manufacturing capacity. It was never going to be the case that all of these companies succeed.”

Major players

Wilkinson likens the situation in CPV to that of the micro-inverter market, which went through an important cull of start-ups and is now dominated by a few major players, such as Power-One and SMA.

Long-term, he predicts CPV will be left with three or four leading suppliers, and not all of them may be names that dominate the market today.

Traditional module suppliers, for example, may opt to create their own CPV lines once the technology has achieved the efficiency improvements it needs in order to be competitive.

In the meantime, the process by which the number of companies is whittled down will not be so much consolidation as elimination. “Companies will go,” says Wilkinson. “They are not going to merge.”

Cahill agrees. “There might be some rationalisation but CPV players are not going to acquire other CPV players,” he says.