Thin-film solar forecast: Partly cloudy

No longer expected to dominate the solar industry anytime soon, the thin-film photovoltaic industry is due to lose some steam in coming months and years, researchers say.

Though the market for thin-film PV is still growing, it’s not meeting previous expectations or expanding enough to support many of the 160 thin-film companies that have formed, according to the analysts.

This month, California thin-film company Solexant Corp. announced the imminent opening of a manufacturing plant in Gresham that could one day employ 1,000 people.

But the latest sign of problems with the thin-film solar industry is the shutdown of Solasta Inc., a thin-film startup founded by three Boston College professors, earlier this year. But researchers say many more closures should be expected, since thin-film technology has proved challenging to commercialize and silicon prices have dropped.

In the solar industry, thin-film technology is applied to uses ranging from panels to flexible products such as portable solar chargers.

Thin film uses little or no silicon and is an alternative to the more prevalent crystalline PV, which relies heavily on silicon. The silicon shortage and price spike between 2006 and 2008 had given thin film its largest boost.

There are currently about 100 thin-film companies in commercial production and another 60 thin-film startups, said Shyam Mehta, senior solar analyst at GTM Research.

“Most of these companies will die,” predicts Mehta, who said his research suggests that about 25 of the companies will remain in their current form within five or six years.

“The expectations have proven to be unrealistic,” he said. “The venture capitalists are coming around to realize they have to kill off the strugglers.”

Solasta, founded in 2006, had received a Series A round from Kleiner Perkins Caufield and Byers, but was forced to sell its IP and assets after a “reassessment” of the thin-film solar market by its investors, Solasta co-founder and CTO Michael Naughton said in a statement.

Read the full story in Portfolio.com.