How Smart Coatings Can Add Value to PV03 Nov 2011 • by Natalie Aster
There are four ways in which smart coatings firms can produce value for the PV industry, and by doing so also produce significant revenues for themselves:
Traditional performance enhancements. Smart coatings can be used to allow more light into PV panels, much as antireflective coatings and more-transparent electrode materials can. And additional light means more power and higher conversion efficiencies, whether in terms of nominal efficiency increases or it just becomes easier to achieve it in actual efficiency. These are all factors on which PV has traditionally competed, which means that they are areas where—if the performance increases are sufficient—the use of smart coatings can be justified with relatively little risk.
Reduced associated operational costs. Smart coatings can also reduce the total cost of PV, typically by reducing the amount of maintenance required. For instance, self-cleaning coatings can reduce the amount of manual cleaning required. The cost savings here can be substantial because labor costs can be reduced, so this may be a good selling point for smart coatings. However, it can sometimes be quite difficult to convince end users to look at PV costs in “total cost” terms. This is especially the case with residential uses.
Protection of the capital investment. Smart coatings can protect PV panels from failures. For example, self-repairing coatings on PV encapsulation can prevent the air and water ingress (that could lead to early device failure) that can occur due to relatively minor damage. The advantages are obvious, which makes the ability to sell smart coatings to the PV industry easier. However, the “total cost” issue appears as it does with using smart coatings to reduce operational costs.
Enabling new products or functions. Smart coatings can provide features in a PV device that are not normally found in conventional PV panels, such as the ability to dim or turn off the panel. This is the most risky part of the smart coatings market in that no one can be really certain that the additional functionality that smart coatings can enable in the PV space will actually sell.
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All this, we believe, should be encouraging to the smart coatings industry. But there are some fundamental challenges to this market for smart coatings firms, too:
Most types of smart coatings are generally expensive propositions for an industry as cost-conscious as the PV industry, and smart coatings providers will inevitably come under price pressure when competing in the PV market. Nonetheless, we note that there are segments of the PV market—BIPV and flexible products—which are sold as value-added products in the first place and may be more accommodating to costly new layers in their stacks. Moreover, as PV firms increasingly work to distinguish themselves in the marketplace, smart coatings can offer a premium place in the market for firms that can efficiently and cleverly take advantage of them.
The PV industry should be seen in the context of the general economy. While we believe that PV offers a very substantial opportunity for smart coatings makers, PV has been hurt by a decline in commitment to government subsidies and by the perpetual doldrums of the real estate market in many developed countries.
Opportunities for Smart Coatings Firms in the PV Sector
In assessing the opportunities available to smart coatings firms in the PV sector, we believe that it is important to make a distinction between smart coatings opportunities that enhance performance along dimensions in which PV panels traditionally compete and those that provide novel functionality to those panels. The point here is that selling novel functionality into the PV space is a relatively high risk strategy and may involve substantial costs in terms of marketing and business development.
Most of the money selling smart coatings into the PV industry will be made in two areas: self-cleaning and electrochromic/thermochromic materials. However, we also see a small market emerging for self-repairing coatings on PV panels—realistically only flexible ones-to avoid breakage and insidious damage to encapsulation films. While the value that can be provided by using smart coatings in this way is real, these opportunities are limited by cost and the rate of technological development of these coatings.
The largest traditional opportunity for smart coatings firms in the PV space appears to be in the area of self-cleaning coatings. While the revenues from self-cleaning coatings sales into the PV market are tiny at the present time, we think they could reach $280 million by the end of the forecast period. The reason why this counts as a “traditional” application is that it speaks directly to increasing conversion efficiencies; a clean panel is an efficient panel! With self-cleaning smart coatings, PV panels can avoid the dirt buildup that can cause competitive panels to drop in conversion efficiency and power output.
But while the value that self-cleaning coatings provide through higher PV performance is real, we believe that the marketing of these coatings should also focus on the reduced levels of maintenance required, at least as much as it focuses on the improved transparency. We think that it may be easy for end-users to overlook (or not take seriously) the threat that dirt makes to transparency. Taking the perspective of the ongoing cost of maintaining PV panels, however, may provide a convincing argument to end-users.
To assist in the marketing of self-cleaning smart coatings for PV, firms might also provide and publicize data about the performance degradation of PV panels due to dirt accumulation-and the cost of periodically cleaning untreated panels-as much as possible. Bringing this information into the open can make it harder to overlook or ignore, helping to raise the perceived value of the coatings as much as possible.
But a thriving market for self-cleaning smart coatings on PV panels is by no means a done deal; there is no significant commercialization as yet and there are still major obstacles of cost and of the other properties that come with self-cleaning coatings. Some types of self-cleaning coatings are composed of titania, a high-index material that can increase reflection off of the glass surfaces of PV modules. Such a combination of features is certainly not ideal, although there have been some developments with either turning the titania into a less- or even anti-reflective layer or balancing the self-cleaning and reflective properties. And there is also the fact that photocatalytic self-cleaning coatings absorb a portion of the incoming light to perform their function, though there is the potential to keep the absorbance low or to use portions of the spectrum that are poorly utilized by the PV cell anyway.
Cost is perhaps the biggest hurdle to self-cleaning coating adoption in the PV industry. Whether quantified by the higher power output produced or by the savings in ongoing cleaning and maintenance—or by a combination of both-the transparent monetary value of self-cleaning coatings means that costs must be kept below a certain threshold for these smart coatings to be “worth it.” And to be successful, that threshold must be kept under by a wide margin.
Another important predictor of the likelihood of commercial success of self-cleaning coatings in the PV space is the fact that the major glass manufacturers are already offering the coatings on some of their architectural products. This commercial development and volume growth of the coatings—even in a different industry-will help to ease and speed the transition of these coatings into the PV markets.
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