The U.S. solar market took a big hit during the pandemic, as supply chain issues slowed production and new rules—including tariffs and bans against some imported panels and components—choked availability further.

Now, though, the industry is booming, with sales in 2023’s first quarter setting new records. Tariffs on Asian products tied to Chinese producers are now on hold. However, U.S. manufacturers are rapidly expanding domestic production and are even going on a bit of a buying spree, picking up foreign producers with new technology expertise. They’re being buoyed by tax credits with a made in America emphasis, which is giving a particular boost to the thin-film photovoltaics (PV) products many utilities are coming to favor.

Solar resources accounted for 54% of all new electricity-­generating capacity additions in Q1 2023, with the 6.1-gigawatt (GW) total constituting a 47% increase over 2022’s Q1 figure, according to the Solar Energy Industries Association’s June 2023 U.S. Solar Market Insight, prepared by energy consultant Wood Mackenzie. Utility-­scale projects led, with 3.8 GW installed, representing 66% growth, compared to Q1 2022. Wood Mackenzie’s analysts anticipate solar capacity will nearly triple over the next five years.

Two types of solar panels

Reports like these typically group solar technologies together, but there are actually at least two major approaches. Crystalline silicon (c-Si) panels are the most frequently used. Historically, these have been more efficient and less expensive than other options, and they control almost the entire residential market and still dominate in utility­-scale projects. However, thin-film PV is now nearing parity on cost and efficiency—and offers a smoother path for utilities hoping to qualify for domestic production tax credits. The primary American supplier and the nation’s largest solar manufacturer, First Solar, manufactures its products entirely within the United States.

Thin-film production is less complicated and essentially involves printing semiconductor material onto a plastic, glass or metal substrate. 

The difference between these two approaches lies in how they’re manufactured. Traditional c-Si panel production begins with silicon wafers that are treated to enable electrical current generation. These individual cells are interconnected and encapsulated to create modules—known as panels—linked together in an array. Thin-film production is less complicated and essentially involves printing semiconductor material onto a plastic, glass or metal substrate. To complete panel fabrication, the printed substrate is topped by glass, mounted in metal framing and installed similarly to c-Si panels.

Thin-film technology can take many forms and incorporate a variety of chemical compositions. Some of the earliest PV products were thin-film offerings manufactured using amorphous silicon—the technology behind solar-powered calculators, watches and other low-power devices. Currently, cadmium telluride (CdTe, or CadTel) is the most common thin-film semiconductor, but copper indium gallium selenide is another technology being explored.

Historically, thin-film products have had a hard time matching c-Si offerings in electrical output, but the latest generation of products is catching up. 

Jinko Solar, a Chinese c-Si maker with an assembly plant in Jacksonville, Fla., advertises power conversion efficiencies (PCEs) up to 22.65%, meaning its c-Si panels can convert up to 22.65% of the sun’s energy to electricity. Thin-film competitor First Solar, Tempe, Ariz., now offers PCEs up to 19.3% for its CdTe panels, according to its website. Those small efficiency differences still make c-Si panels the go-to option for most residential and commercial rooftop arrays, where space is limited, but thin-film is finding a niche in utility-scale installations where space generally isn’t an issue. Lighter-weight thin-film can be easier and faster to install than c-Si options, which can have a big effect on overall cost when thousands of panels are involved.

First Solar is also fully vertically integrated, manufacturing all product components itself, which has put the company toward the top of utility buyers’ lists. Since the Inflation Reduction Act added an extra 10% tax credit for American-made panels to the preexisting 30% credit all solar projects can earn, First Solar’s “Made in America” stamp makes it very appealing to utilities. 

“First Solar has made it their strategy to sell to business customers,” said Ingrid Repins, a senior research fellow at the National Renewable Energy Laboratory (NREL), noting the company’s absence in the market for smaller residential and commercial installations. “Because First Solar is not selling into the rooftop market at the time, what you’re going to find there is c-Si. We do have c-Si manufacturers in the U.S., but they’re not, in most cases, vertically integrated.”

Toledo Solar, a startup in Perrysburg, Ohio, has ties to First Solar’s initial developers and is hoping to bring CdTe thin-film panels to the residential market. The company began producing panels in 2021 and announced plans for expansion just a year later. Toledo Solar also is vertically integrated, so its residential buyers are eligible for the full 40% tax credits.

Perovskites hold big promise

First Solar recently moved to further improve its thin-film technology with its purchase of Evolar AB, a Swedish PV startup with expertise in the next big leap in solar technology: perovskites. These are a family of materials with potential for improving performance and lowering solar cell manufacturing costs. They’re highly productive on their own, reaching 25% efficiency in the lab. However, their big promise lies in pairing them with standard c-Si or CdTe materials, which are limited in their abilities to take full advantage of the energy present in the sun’s rays. Adding a layer of perovskites in a tandem design could enable panels to capture energy that otherwise would be lost.

The U.S. Department of Energy announced its intent to provide matching funds of up to $20 million to put domestically manufactured perovskite tandems on the path to commercialization by 2030. 

“You can tune the band gap to absorb photons at different wavelengths,” Repins said, explaining how formulas for creating perovskites can be manipulated. For example, a perovskite layer could be tuned to absorb photons at the blue end of the light spectrum and thus add to the infrared energy a CdTe layer could capture.

Of course, there are challenges in this approach, or such tandem designs would already be leading the market. As Donghyeon Kang, a materials scientist with Argonne National Laboratory, explained, though fabricating perovskites is inexpensive, the materials are very sensitive to environmental conditions. “The material has some very significant weaknesses to water—even after just one minute, it’s completely destroyed,” Kang said.

In July, the U.S. Department of Energy (DOE) announced its intent to provide matching funds of up to $20 million to put domestically manufactured perovskite tandems on the path to commercialization by 2030. In a presentation announcing the funding, DOE representatives noted that tandem designs have demonstrated the potential to hit PCEs greater than 30%, about a 50% improvement over current commercial technologies. Achieving that level of performance in commercial solar panels would represent a revolutionary step up in solar capacity.

Kang’s team has focused on the interface between perovskites and the film-deposited CdTe layer in a tandem application.

“Using our coatings technology, we can make a really thin coating layer,” Kang said. That perovskite layer is only a single atom, or one nanometer, deep. “Using the atomic layer, we are developing a new interface layer.”

The goal for Argonne’s researchers is to develop their technology to the point it can be handed over to commercial producers in the next four to five years, Kang said. They’re currently working with a manufacturer to develop the means to use the same machine to lay down CdTe and perovskite layers in a tandem design.

“The atomic layer deposition technology is widely used in the semiconductor and solar cell industries,” Kang said. 

For example, European solar makers now incorporate a nanometer layer of aluminum oxide in their assemblies to improve efficiency by 2%–3%, he said. Even this small boost is worth the added expense in that market, given Europe’s high energy costs.

Repins sees c-Si and thin-film technologies continuing to evolve with incremental improvements over the next five years or so, with perovskites offering the opportunity for a more significant boost.

“For all the technologies, the efficiencies have been creeping up by a fraction of a percent a year, and I think we’ll see that continue,” Repins said. “If the perovskites become possible as a tandem, I think that will be more of a step up.”

In the meantime, Repins suggests buyers and contractors focus less on specific technologies when making purchases and more on a panel’s tested performance. 

“Those distinctions are less useful than buying a quality product,” Repins said, noting that certification to UL Standard 61215 is one data point to look for. “That means those panels have been through rigorous torture tests.”

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