Yesterday was a big day for solar, and no one really noticed. If you're looking for the "next big thing" in solar look no further than the announcement of 3M's (NYSE: MMM) Ultra Barrier Solar Film. In separate announcements, 3M introduced the new film and high volume production in Missouri during 2011. The film provides high transparency, low moisture transmission and durability for CIGS, CdTe and Organic Photovoltaic modules and is intended to replace glass in thin film modules.
This gives thin film manufacturers the ability to build solar cells in a roll-to-roll process similar to how tape, window film or LCD films are made. Machines making these products run at hundreds and even thousands of feet per minute providing low cost for manufacturers. Also, by replacing the standard glass panel for modules the panel becomes flexible, opening up a variety of installation options.
Oh, the possibilities
My excitement when I saw this announcement brought out the inner engineer in me and had a million possibilities running through my head. I was brought back to the old days when I worked at 3M as an engineer involved in product development and manufacturing.
While I don't have any insider knowledge of this product, I know 3M doesn't make major investments in capital equipment hoping demand will arrive. It must have major partners in the industry, and my money is (literally) on First Solar (Nasdaq: FSLR), who seems to be a natural fit. Is it just a coincidence First Solar announced 500MW of additional capacity, set to open in 2012, a day after 3M's announcement? GE (NYSE: GE) and Sharp would also be natural fits with their thin-film solar products. We'll have to wait and see who emerges first.
I also think 3M believes this is a revolutionary product or it would not have made two separate press releases about it. 3M introduces an unbelievable number of new products every year and this type of attention is rare, so executives must be excited.
Thinner is better
Thin film solar is the one product that has the ability to be made in roll-to-roll process dramatically reducing costs and increasing manufacturing flexibility. CdTe technology is already proven, and if CIGS in particular can get off the ground (I'm not hopeful) we should see cost reductions continue for years to come.
There is not any news suggesting partnerships between any of these companies yet, but First Solar has aggressive cost targets over the next few years and it may have made those numbers public knowing this pipeline was in place. If products unfold like I have laid out, it could put more pressure on the costs of multicrystalline manufacturers like Yingli Green Energy (NYSE: YGE), JA Solar (Nasdaq: JASO) and Solarfun (Nasdaq: SOLF) who have ridden falling silicon prices in recent years.
A win-win for solar
Solar is such a big opportunity that even 3M, GE and Sharp could see a meaningful impact if roll-to-roll processing takes shape. I tend to lean toward solar only manufacturers, but First Solar is really the only big public player in this space right now with the scale and R&D backing to compete with the big boys.
Maybe I am the only one excited about the possibility solar panels can be made roll-to-roll at hundreds of feet per minute, but I think there is a huge opportunity here. In solar, investors need to get out in front of the technology curve to grab the big opportunities, and I think this is a big one. Do you think flexible films are a revolution waiting to happen in solar? Leave your thoughts in the comments section below.
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