Thin Film PV

After operating in stealth mode since being founded in 2009, Reel Solar Inc. (RSI) made a gold-carpet entry into the solar marketplace in July when the company shunned its secrecy by announcing a new world record for cadmium telluride (CdTe) photovoltaic module size.

Reel Solar’s breakthrough 1.5 square-meter module, together with a localised manufacturing strategy, is expected to allow the company to achieve a manufacturing cost of less than 40 cents per peak watt in 2014 and enable grid parity for utility scale solar projects.

RSI’s strategy is to offer licensing agreements for different regions around the globe, with the potential to build its own facility to service the U.S. market. The company’s first licensing agreement with a solar manufacturer in Asia is expected to be formally announced by October.

Road to profitability

RSI has raised $20m in venture funding and is in the process of raising an additional Round C of $20m, which should close by the end of this year.

Although the solar industry is experiencing rapid growth, typically the only manufacturers who have made consistent profits are those with access to proprietary technology. Clearly, RSI now considers itself to be included within this category.

“Incremental improvements to undifferentiated technology like crystalline silicon are not enough to prosper in this commoditized market,” says RSI Chairman and CEO Ed Grady. “Manufacturers end up giving away their margin to survive. First Solar has shown how to make profits through technology and cost differentiation. RSI is delivering a step change improvement in the cost structure, while retaining all the characteristics that have made CdTe so successful.”

The bigger, the better?

Conventional cadmium telluride (CdTe) modules measure 0.72 square meters, a limitation that stems from the use of high temperature CdTe deposition processes. RSI has developed a proprietary tool and low temperature process, known as Rapid Efficient Electroplating on Large-areas (REEL), that speeds up the plating step and eliminates constraints on panel area.

Grady says that the availability of low-cost, large-area CdTe panels, coupled with a business model that leverages regional manufacturing partners, promises the widespread acceleration of grid parity for utility scale solar.

Since emerging from stealth mode, the company has received inquiries from manufacturers in India, Europe and South Africa who desire to license the technology. “It appears that the market is embracing our strategy of licensing to geographic regions,” says Grady.

Licensing by geography

RTI’s business model is essentially a licensing strategy covering different regions of the world. RTI plans to sell a royalty-bearing license on a geographic basis to manufacturers using their technology. RTI also sells a proprietary tool containing embedded IP, which allows them to control who has access to the IP and the tool itself.

This plan allows RTI to reap revenue from the licenses and tool sales. The company plans to expand its licensing program to between four and eight manufacturers by 2016. At that point, the company hopes to have generate enough cash to build its own production scale facility in the U.S. to service the North America market as a supplier of modules.

“You can characterise our business as capital-light and very cost effective from a  manufacturing perspective,” Grady says.

“RSI is one of the thin-film PV companies to watch as it announces its certified module efficiency results,” says Fatima Toor, Ph.D., Lead Analyst for Solar Components at Lux Research Inc. “RSI will need strong partners, but with the right strategy could benefit from the expected solar industry equilibrium in 2015.”

Executing a vision

To accomplish that, Toor says that Reel Solar will need to prove field data and competitive large area efficiencies to get traction for licensing or technology partnerships from thin-film module companies.

“The math is simple for large-area modules,” says RSI Co-founder and President Kurt Weiner. “At each step in the manufacturing process we are moving more Watts for a given capex, materials and labour cost. At the end, our panels produce significantly more power so they’re cheaper to install. When we founded the company we recognszed that in thin-film, you needed larger panel sizes with higher power outputs, in addition to efficiency, to truly differentiate against silicon. We’ve achieved both.”

Pedram Mokrian, an RSI investor and part of the management team with venture firm Mayfield Fund, says that he is excited about RTI’s technology, its business plan, and the fact that the solar industry is hitting critical mass.

“We believe that the solar industry is just beginning to hit stride,” he says. “RSI's large-area manufacturing technology based on the proven CdTe material system represents a step change in PV manufacturing costs. Most importantly, our investment focused on the strength of the RSI team, and their ability to execute against this vision.

“RSI has been developing low cost electroplating processes since 2009. RSI is now offering a "virtual turnkey" manufacturing capability to a single licensee in each major region of the world,” Mokrian concludes.