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Thin film silicon technologyInstalled System LCoE (€/kWh) IRR (100% Equity)Price (€/W)Italy 500 kW rooftop €2.16/W €0.11/kWh 16.6%California 10 MW €1.71/W €0.08/kWh 8.5%China 10 MW €1.48/W €0.10/kWh 8.5%Table 1. Results of the analysis.that is sold at prices that approach themarginal cash cost of production. Atthe same time, these reduced prices willcreate an elastic demand increase in largemarkets outside of Europe, demand thatis reinforced by new renewable mandatepolicies in US and China.There will also be winners and losersamong the different PV technologiesin these volatile market shifts. In shortthe winners in this scenario will bethose technologies that have the lowestsustainable cost of production, and at thesame time have sufficient track record inthe market to qualify for low cost projectfinancing. The losers in the months andyears ahead will be those producers whohave a less efficient cost structure—due tohigh production costs, inefficient marketchannels or high cost of financing due tobeing less bankable.Thin film silicon is well positioned forthese new market conditions. Driven bysemiconductor equipment industry leadersthat are experienced in delivering continualand rapid technology evolution and costdeclines, the cost of ownership has beenreduced by over 50% in just the past threeyears. Oerlikon Solar and other thin filmsilicon leaders continue to invest heavilyinto product and equipment R&D, andhave identified significant opportunitiesfor further future cost reductions andmodule performance improvements.As an illustration of the competitivepositioning for thin film silicon in the wakeof the above-described policy changes,we have presented below three differentscenarios, in three different regions:1. 500 kW rooftop application in Italy,operational in H2 20122. 10 MW ground mountedapplication in California, installedin H2 2012, competing for RPS3. 10 MW ground mountedapplication in China, installed inH2 2012Key assumptions for this analysis• Module price. Based on 2011cost of ownership for OerlikonSolar ThinFab (120 MW capacity,10% average module efficiency),assuming production at a plant inthe region. Assumes gross marginpercentage of 35%• BOS costs. For 10 MW installations,based on bottoms-up benchmarkcosts from leading EPC’s adjustedfor efficiency differences comparedwith CdTe or c-Si. Assume BOS50% higher for 500 kW rooftop.Estimated 2012 BOS costs asfollows:i. Italy 500 kW rooftop:€1.36/Wii. US 10 MW ground mount:€0.91/Wiii. China 10 MW groundmount: €0.68/W• Energy production. Assume 1690kWh/kW for Italy (Bari), 1639 forCalifornia (San Diego) and 1638for China (Yingchuan). Note thatthese values are based on the use ofMicromorph®, with an energy yieldthat is approximately 5% higherthan typical yield of crystalline PV.• Available incentives. For Italyscenario, assume H2 2012 FITlevel, including 10% premium forin-country production (€0.22/kWh). For US assume 30% ITC and5-year MACRS. For China, assumeno incentives.• LCoE escalator—2.5% p.a. for Italyand US, 4.0% for China.• Financing. Results are based on100% equity.ResultsThe results of the analysis, Table 1,demonstrate that TF Si technologywill continue to be among those PVtechnologies that are competitive even aspolicies shift and margins are compressed.The project in Italy shows an excellentoverall rate of return for project investors,even with the reduced FIT levels. Theresults for the 10 MW projects in US andChina demonstrate that continuing costreductions made possible by technology/equipment suppliers position thin filmsilicon to deliver low-cost power thatis competitive with other leading PVtechnologies in renewable mandatemarkets.Chris O’Brien is head of marketdevelopment for Oerlikon Solar, and is basedin Washington, DC. He has held seniormanagement positions with leading solarPV companies including Sharp Solar and BPSolar since 1995. Chris has previous careerexperience in the energy efficiency andindependent power industries. He holds anengineering degree from Dartmouth Collegeand an MBA from Stanford University.www.globalsolartechnology.comGlobal Solar Technology – June 2011 – 5