The solar industry is reaching a turning point. We're well beyond the dream that solar power will be competitive with traditional electrical generation; solar is already cheaper than some peak generation sources. Give solar manufacturers and developers a few more years, and they'll leave more energy generation sources in the dust.

But questions still remain for the sector. There's no clear-cut technological winner in solar power as manufacturers take different paths to success. Below is a review of what the technologies are and their advantages and disadvantages.

So far, thin-film solar is the leader in the clubhouse. First Solar's (Nasdaq: FSLR) cadmium telluride (CdTe) panels cost just $0.75 per watt to make, easily passing every other form of solar power.

But there are pitfalls with thin-film panels. There is currently no technology available that gets efficiency anywhere near SunPower's (Nasdaq: SPWRA) industry-leading 20% efficiency. First Solar is currently at 11.6% panel efficiency and General Electric (NYSE: GE) says it can make panels 12.8% efficient on a large scale. This is important as costs fall because balance of system costs like land and inverters eat up more of a developer's capital. As more efficient panels become more cost effective, the cost advantage dries up.

GE also uses cadmium telluride, a nasty chemical, to make its panels and along with First Solar has slowly been increasing efficiency. With costs falling slowly but consistently for CdTe panels, this is the leader, but not the only thin-film option.

Copper indium gallium selenide, better known as CIGS, has been talked about as a more efficient thin-film chemistry, but up to now no one has been able to make it viable on a large scale. First Solar is said to have an underground CIGS research facility but has yet to launch a product based on the technology.

Sharp is using another nascent technology, amorphous silicon, to make some of its modules, but efficiencies are 9% or less. Without a major breakthrough, this technology is on its way out.

Advantage: Cost, emerging technologies

Disadvantage: Efficiency, toxicity, possible raw material shortages

One of the biggest reasons solar power has grown so quickly is falling costs for polysilicon, a raw material in solar panels. That allowed relatively new entrants into the market like LDK Solar (NYSE: LDK), JA Solar (Nasdaq: JASO), and Jinko Solar (NYSE: JKS) to set up in China, leverage low labor costs, and compete with more established solar giants.

One of the older companies in China, Trina Solar (NYSE: TSL), saw costs consistently fall until the third quarter of last year. But that's when it became readily apparent that non-silicon costs weren't falling as fast as the raw material and it would be more difficult to cut costs.

Analyst Satya Kumar from Credit Suisse thinks Trina can cut costs to $0.88 per watt next year and compete with thin-film partly due to a glut of polysilicon on the market. But cost trends tell me Kumar is a bit too optimistic. Last quarter, Trina's cost per watt was $1.16, of which $0.43 was for polysilicon and $0.73 was non-silicon costs. Those non-Si costs have fallen a whopping $0.03 in the last year. So unless that trend changes, Kumar is expecting poly to go for somewhere around $0.15 to $0.20 per watt next year.

Polysilicon cells can be made with efficiencies as high as 20%, and that's the major advantage over thin-film manufacturers. But if costs remain difficult to cut, there may need to be further innovations to take the next step.

Advantage: Efficiency

Disadvantage: Costs have become stagnant

Solar thermal
Solar thermal solar plants use mirrors to bounce solar rays to a thermal receiver, which heats water, oil, or another fluid, and eventually turns a power generator. eSolar and BrightSource Energy are two of the companies on the cutting edge of solar thermal power and are just beginning to build utility scale plants.

The advantage solar thermal has over traditional panels is the ability to heat an energy storage medium. Molten salt can be heated throughout the day when the sun is out and then dissipate the heat at night when most solar modules are useless. This allows solar thermal the ability to supply base load power.

Right now solar thermal is a wild card. The possibility of supplying base load power is intriguing, but the recent Ivanpah project cost $5.46/W to build, so costs need to come down in the future.

Advantage: Energy storage, base load power source, efficiency

Disadvantage: Cost

Foolish bottom line
As these technologies emerge, it's important to keep an eye on the progress. Long term, I think thin film will be the winner as CIGS or another chemistry becomes more mature. What technology do you like for the future of solar power?