Five years ago, a promising solar technology was all the rage in Silicon Valley. Several startups were experimenting with a compound known as CIGS — shorthand for copper indium gallium selenide — that advocates said represented a great leap for the industry. Known as “thin-film” because of the thin and flexible panels, the promise of CIGS was that it would be less expensive to manufacture than traditional silicon-based solar panels but still highly efficient at turning the sun into electricity.
Startups like MiaSole, Nanosolar, SoloPower, Solyndra and others attracted massive amounts of funding from some of the valley’s top venture capital firms. But the timing was terrible. Chinese manufacturers began aggressively pricing silicon-based panels and driving costs down just as the CIGS companies were trying to get their manufacturing lines up and running. Then the global recession hit, leaving Silicon Valley littered with CIGS companies that filed for bankruptcy, were sold at fire-sale prices, or struggled on.
But while Silicon Valley’s CIGS dream largely imploded, work on the technology continues at the nation’s top energy labs and universities, and some say CIGS still holds enormous potential. Lux Research estimates that the market for solar installations based on CIGS thin-film panels will reach $2 billion in 2015, as manufacturers improve efficiencies.
“The book isn’t entirely closed on CIGS,” said Shayle Kann, vice president for research at Greentech Media. “CIGS was a new technology with complex manufacturing processes that require scale and maturation to be competitive. A lot of companies were trying to scale but it was the worst possible timing: The price of silicon panels was falling through the floor. Solar Frontier is the only CIGS company that is operating at large scale.”
Solar Frontier isn’t in Silicon Valley; it’s in Japan. Founded in 2007, it is 100 percent owned by Showa Shell, a subsidiary of Royal Dutch Shell, which made a $1 billion investment in Solar Frontier’s factory. Japan is the world’s hottest solar market after the 2011 Fukushima nuclear disaster, and the Japanese government requires utilities to buy renewable power at fixed prices.
“CIGS is very much alive,” said Charles Pimental, chief operating officer for Solar Frontier in the Americas, based in Santa Clara, Calif. “Many companies failed to survive because they underestimated the technological challenge and capital required to bring CIGS to scale.”
Despite the washout, not all CIGS startups have given up hope. San Jose-based Solexant, which is in research-and-development mode and has about 20 employees, remains bullish on the technology and named Markus Beck, a highly regarded CIGS veteran, as chief technology officer in April.
“It’s our belief that all the promise of CIGS still exists,” said Robert Wendt, Solexant’s vice president of process engineering. “It’s a matter of how you capitalize on its promise. CIGS has been a bigger challenge than some anticipated.”