DayStar Technologies (DSTI)

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Drew Cameron

Andrew Lewis

Daystar Technologies is a producer of Copper Indium Gallium Selenide (CIGS) thin-film photovoltaic (PV) solar panels. The company uses its own manufacturing process, that it claims increases the cells' efficiency and reduces production costs. CIGS has proven to be more efficient than the other thin-film technologies, Cadmium Telluride and amorphous silicon. Using CIGS, DSTI has achieved a 14% conversion efficiency,^[1] a full 8% above the average for thin film cells.^[2] Although thin-film technologies have proven to be cheaper to produce than the standard poly-crystalline silicon panels, they are less efficient and require more space to produce the same quantity of electricity.

Daystar Technologies is in the process of constructing its first large scale production facility in California, which is designed to produce 25 MW of solar panels each year. With the growing concern over global warming, solar and other forms of renewable energy have received support in the form of larger investments, government tax breaks and subsidies, in order to make them more competitive. The solar PV market has been hampered by silicon shortages as a majority of PV systems use purified silicon for their products; however, Daystar does not use silicon and thus benefits when its competitors are forced to pay more for silicon. Unfortunately for Daystar, silicon shortages look to be nearing an end, as suppliers continue to ramp up production and complete new facilities to supply the market. Daystar and its primary competition in CIGS, Ascent Solar, are looking to enter the market, and compete with the more established PV manufacturers First Solar, Suntech Power Holdings, and SunPower.

Business Overview

Business & Financial Metrics^[3]

DSTI is in its "Development Stage" and is not yet a profitable venture. In 2009, the company incurred a net loss of $25.0 million, a 4.9% decrease from 2008's net loss of $26.3 million.

Trends & Forces

CIGS is an Economic Alternative to Silicon Based Solar Cells

Daystar produces CIGS thin-film PV cells, instead of the crystalline silicon cells that make up approximately 90% of the PV market.^[4] The average thin-film cell has a conversion efficiency of 6%, while the average crystalline silicon cell had a conversion efficiency of 15%.^[5] DSTI and other CIGS manufactures have shown promise with the technology as they have achieved conversion efficiencies in the lab approaching 20%.^[6] Conversion efficiencies at this level would make CIGS far more efficient than the other thin-film technologies, Amorphous Silicon and Cadmium Telluride, and even more efficient than some crystalline silicon panels.^[7] Although promising, manufacturers have not been able to commercially produce CIGS panels at such a high efficiency, with DSTI predicting an efficiency of only 14% for its planned 25 MW facility. Although Daystar's cells are more efficient than most competing thin-film manufacturers, the level still falls short of SunPower's silicon cells that have a conversion efficiency of 23.4%.^[8] Although CIGS cells are generally less efficient than those made from crystalline silicon, they cost less to produce. CIGS has the potential to be more cost effective than other PV technologies, as DSTI plans to achieve production costs below a dollar per watt with its new facility.^[9] In the silicon PV market, Evergreen Solar (ESLR) plans to cut manufacturing costs from $2.25/watt to $1.50/watt by 2011 by reducing its silicon consumption from 5 to 2.5 grams/watt with its patented ribbon manufacturing technology.^[10] Some non-silicon manufacturers have already achieved production costs lower than Evergreen Solar's predictions, but even First Solar, which is able to produce cells at $0.98 per watt^[11] is still above the dollar per watt level that DSTI plans for its CIGS facility.

Continued Worldwide Silicon Shortages Will Hurt Daystar's Competitors

DSTI, unlike other PV manufacturers, does not use poly-crystalline silicon for its products and so is not hurt by rising silicon prices. For Daystar's competitors who use poly-crystalline silicon in their solar cells, the cost of the silicon alone accounts for approximately 45% of the module's cost.^[12] This means that when silicon prices rise DSTI's competitors are forced to either absorb the extra cost, or pass it on to their consumers. The price of silicon has increased as a result of the rapid growth of the PV industry and the continued demand for processed silicon from electronics manufacturers. The increased demand in the world market has caused severe shortages, but these shortages are being addressed by silicon manufacturers and likely will not last much longer. Although the demand for silicon is expected to stay quite strong, these and other additions are likely to ease the silicon shortage and soften prices. Although a decrease in the price of silicon will benefit the solar industry, it will hurt DSTI as its Silicon-based competitors are able to drop their prices.

Homes with Solar Panels Sell Faster

DSTI plans to produce its thin-film CIGS solar panels at a cost per watt that is well below others in the industry and at an efficiency approaching that of the average crystalline silicon panel. Despite falling housing values and a tough market for new homes, houses that are built with integrated solar systems are flying off the market - at twice the rate of grid-based houses.^[13] Couple the higher sales rates with legislative tax breaks for residential solar panels, like the California One Million Solar Homes initiative, and housing manufacturers have strong incentives to add solar panels to their construction plans.

Competition

The solar PV market is growing quickly, with companies like Daystar and Ascent Solar Technologies (ASTI) looking to establish themselves as competitive members. The companies hope that the benefits of CIGS will allow them to compete with the established members of the PV market First Solar (FSLR), Suntech Power Holdings, and SunPower (SPWR) and the expanding concentrated solar market. Other big players in the PV market are relatively small segments of larger corporations like BP (BP), Kyocera (KYO) and Sharp Corporation (SHCAY).

• Ascent Solar Technologies (ASTI) is another company looking to create thin-film CIGS PV modules, but instead of coated glass, the company is focusing on flexible, light-weight modules. The company's manufacturing process uses lasers to cut the layered substate and connect the individual PV cells.^[14]

• First Solar (FSLR) produces Cadmium Telluride thin film PV panels.^[15]

• Evergreen Solar (ESLR) produces silicon based PV panels using its proprietary String Ribbon technology. The panels that the company makes using this technology use about half the silicon of conventional silicon PV methods.^[16]

• SunPower (SPWR) produces silicon-based PV panels for the commercial energy market.^[17]

• Energy Conversion Devices (ENER) makes silicon based thin-film solar panels, as well as computer and battery technology.^[18]

• EMCORE (EMKR) produces PV cells using Gallium Arsenide. The Gallium Arsenide panels have achieved efficiencies as high as 39% with concentrated light, which is well beyond even the best silicon cells that operate at efficiencies around 20%. The Gallium Arsenide panel, however, require direct sunlight and are usually accompanied with mirrors to direct additional sunlight upon the panels.^[19]

References

1. ↑ DSTI 10-k 2007 Pg 1
2. ↑ Solar Buzz: Fast Solar Energy Facts
3. ↑ DSTI 2009 10-K pg. F-6  
4. ↑ Solar Buzz: Fast Solar Energy Facts
5. ↑ Solar Buzz: Fast Solar Energy Facts
6. ↑ Ascent Solar gains funds from the Air Force
7. ↑ DSTI 10-k 2007 Pg. 5
8. ↑ First Solar Efficiency
9. ↑ DSTI 10-k 2007 Pg. 5
10. ↑ ESLR 2007 Earnings Call Transcript, Page 1
11. ↑ First Solar, Inc. Announces 2007 Fourth Quarter and Year-end Financial Results
12. ↑ Solar Buzz: Fast Solar Energy Facts
13. ↑ SPWR 1Q08 Earnings Call, Page 1
14. ↑ Google Finance ASTI
15. ↑ First Solar 10-k 2007
16. ↑ Evergreen Solar 10-k 2007
17. ↑ SunPower 10k 2007
18. ↑ ENER Form 10-k 2007
19. ↑ EMCORE 10-k 2007