Made-in-Ohio solar panels benefit from federal incentives, supply chain politics
About two decades after cadmium telluride solar panels were commercialized in Ohio, the maturing technology is finding momentum thanks in part to its domestic manufacturing and supply chain.
Crew members perform an inspection at one of First Solar’s Ohio manufacturing plants. Photo courtesy of First Solar.
A once-novel solar power technology with Ohio roots is having a moment in the sun, along with two Toledo-area manufacturers.
Scientists had experimented with cadmium telluride solar panels in the lab since the 1950s, but the technology was commercialized just two decades ago after important groundwork by a pair of Ohio entrepreneurs who founded what would eventually become First Solar.
After years of fighting for a niche next to cheaper and more efficient crystalline silicon solar cells, cadmium telluride has recently closed the gap on cost and energy output. Cadmium telluride panels hold the largest worldwide market share among thin-film solar technologies, which use very thin layers of semiconductor material, versus thicker rigid crystalline silicon.
On top of technological advances, the sector is poised to benefit from ongoing supply chain politics and new federal climate change legislation that incentivizes domestic manufacturing.
Those trends are fueling a solar manufacturing boom in Ohio, where despite hostile state and local policies against solar farms, two cadmium telluride manufacturers have announced major expansions that promise to add hundreds of jobs in the coming years.
First Solar plans to open its third Ohio factory later this year in Lake Township. That 3.3-gigawatt plant will be followed by a 1.3-million-square-foot research and development facility in Perrysburg, slated to open next year. Plans call for a fourth U.S. factory to open in Alabama in 2025, bringing the company’s total U.S. production capacity to roughly 10 GW.
Meanwhile, Toledo Solar, whose panels go mainly to commercial and residential users, is tripling its production capacity from 100 to 300 megawatts this year. Although the company is much smaller than First Solar, which targets the utility-scale market, “that’s a big deal for us,” said CEO Aaron Bates.
“The Toledo area, with its deep ties to the glass industry, was a natural incubator in the early years of our business,” said Kuntal Kumar Verma, chief manufacturing officer for First Solar. More than 20 years later, northwestern Ohio “is home to a pool of thin-film solar manufacturing knowledge that is perhaps unparalleled anywhere in the world.”
The cadmium telluride solar sector’s origin story in Ohio starts with two superheroes of the glass industry.
Harold McMaster grew up as a farm boy in northwestern Ohio, and Norman Nitschke spent his boyhood in East Toledo. The two pioneered the manufacture and use of tempered glass — the stuff used for car windshields so it won’t break into jagged shards. They became co-founders of several companies, including Glasstech.
McMaster and Nitschke then began working on solar energy through Glasstech Solar. That work led to Solar Cells, Inc. Under McMaster’s leadership, the company developed the basic vapor deposition process for its cadmium telluride solar cells in 1997.
The process uses hot gas to crystalize a layer of cadmium telluride whose thickness measures roughly 3% of a human hair. That layer, glass and other materials make up the solar panel’s “sandwich.” Production takes less time than that for crystalline silicon panels, which represent the majority of solar panels used worldwide.
After the sale of a controlling interest in the company to an Arizona-based investment firm, Solar Cells, Inc. became First Solar in 1999 and opened its first manufacturing plant in Perrysburg.
Yet it took years before the cells’ efficiency improved enough to become competitive. In 2016, First Solar achieved an energy conversion efficiency of 22% in the lab. A 2019 study by company scientists and research at the National Renewable Energy Laboratory refined on that work, reducing the risk of instabilities that could lessen efficiency.
Toledo Solar chose the Toledo area when it started up in 2019, so it could capitalize on the knowledge base built up by First Solar and nearby universities. Starting elsewhere would have been “such a lift, and it would be so expensive,” Bates said.
Now cadmium telluride solar is a proven technology, and it’s competitive with crystalline silicon, said scientist Lorelle Mansfield at the National Renewable Energy Laboratory. “It’s in the field. It’s utility-scale. It’s out there, and it’s working well,” she said.
The cadmium telluride sector currently supplies roughly 40% of the U.S. utility-scale market and about 5% of the worldwide market, according to the U.S. Manufacturing of Advanced Cadmium Telluride Photovoltaics Consortium, or US-MAC. Members include various companies, universities and the National Renewable Energy Laboratory.
A Global Market Estimates report released in January projected that the global cadmium telluride market would grow at a compound annual rate of 12.5% from 2023 to 2028 as the energy transition continues.
Although First Solar and Toledo Solar don’t compete with each other, they and other cadmium telluride companies in the global market do compete with crystalline silicon.
By late 2020, First Solar reported an average efficiency rate of 18% for its commercial modules. That’s at the low end of the 18% to 22% range the Department of Energy has reported for crystalline solar panels.
However, cadmium telluride can “deliver up to 4% more energy in hot climates and up to an additional 4% more energy in high humidity,” Verma noted. The theoretical efficiency of cadmium telluride panels is also higher — more than 30%. That’s because the semiconductor layer can respond to a wider range of light energy, Bates said.
Cadmium telluride panels also offer cost savings in production because they require less materials, less energy and less water. NREL research confirmed last year that they’re less carbon-intensive than crystalline solar.
Mansfield noted an additional big advantage the cadmium telluride sector has right now: “It’s a thin-film technology that’s made in the U.S.”
“There’s a lot of advantage to that,” said Jane Harf, executive director for Green Energy Ohio. The companies are less vulnerable to foreign supply chain interruptions.
Even before the Covid-19 pandemic, U.S. companies in the crystalline silicon sector faced supply chain problems because of China’s global dominance in making the semiconductors they use. The country’s violation of anti-dumping rules triggered restrictive tariffs during the Trump administration. The Breakthrough Institute and others have also criticized China for using forced labor and other unfair labor practices.
Last June, President Joe Biden announced a 24-month reprieve from certain import duties for solar modules and cells coming from Malaysia, Cambodia, Thailand and Vietnam. The goal was to supply the U.S. solar market until domestic production of crystalline silicon semiconductors can ramp up.
A preliminary finding from the Commerce Department in December found some circumvention of the trade restrictions in all four Southeast Asian countries. Basically, companies were shipping Chinese products to the U.S. after just minor additional processing. That suggests imports for the crystalline silicon sector could become more challenging after June 2024, although the 2022 federal CHIPS Act aims to increase domestic production of semiconductors.
For now, all-domestic production means Toledo Solar is the only company in the rooftop solar market that can qualify for the full 40% tax credit under the Inflation Reduction Act, Bates said.
The cadmium telluride sector isn’t immune from potential supply chain issues. However, Mansfield said, the amount of semiconductor materials needed per panel is small. And better ways to refine the feedstocks could maximize their supply, she added.
“We’re essentially taking two byproducts from mining waste streams — cadmium and tellurium — and combining them into a stable compound,” Verma said. At the end of their useful life, more than 90% of the modules’ materials can be recovered.
Gains for Ohio
First Solar expects its Lake Township plant will provide 700 jobs in addition to the 1,600 jobs at its existing Ohio facilities. Plans call for the research and development facility to create another 200 jobs. Toledo Solar anticipates it will create more than 250 new jobs by 2027.
The two companies’ growth also attracts other businesses to Ohio. NSG Pilkington opened a new float glass line in Luckey in 2020, creating about 150 new jobs
And Ice Industries announced last year it will build a 150,000-square-foot plant in Bowling Green to make steel back rails for solar panels, providing about 120 new jobs.
The US-MAC consortium hopes to address ongoing challenges. There’s still a lot of room to improve cadmium telluride panels’ efficiency up to their theoretical limit, Mansfield said. Other elements of the panels can be enhanced as well.
The sector may face more competition from the crystalline silicon market as domestic semiconductor production ramps up or due to other advances. Other thin-film technologies could also pose competition. Researchers are also working on solar cells with stacked semiconductor layers that respond to different bandwidths of energy, Mansfield said.
Then there are perovskite solar cells, which can be printed or painted onto surfaces. A Feb. 16 study in the journal Science reported that perovskite solar cells with a bit of an added compound, called DPPP, maintained an efficiency of 23% over the course of two months until the study period ended.
Although multiple challenges remain, “perovskite solar cells may start making it to market in a few years,” said study co-author Yanfa Yan at the University of Toledo.
Politics could also affect how much future growth in the cadmium telluride sector stays in Ohio.
Solar energy is “still a political issue. And to me, it shouldn’t be,” Bates said. “It’s an economic issue.” In his view, state policymakers should appreciate and support Ohio’s leadership role in solar panel manufacturing.
“This is the center of the Western Hemisphere — full stop — for solar,” Bates said.
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