LONGMONT - After about 20 years in development, the company formally known as AVA Solar is ready to bound into commercial production.

Abound Solar will unveil its full-scale manufacturing facility in Longmont on April 14, with government officials and industry experts in attendance. Abound isn't divulging the initial operating level of the 200-megawatt facility, but its first line has a 65-megawatt capacity.

That reticence is understandable, as the company is entering an industry facing a contradictory market and increasing competition.

The company was born AVA Solar in 2007, based on technology that has been in development at Colorado State University since the late 1980s.

Crystalline silicon solar technology has been in wide use for decades, but thin-film technology has been gaining ground recently. There are three main thin-film technologies in production - amorphous silicon; cadmium-telluride, known as cad tel; and copper indium gallium selenide, known as CIGS (see breakout on page 29A).

Abound Solar is using cad tel technology as does Tempe, Ariz.-based First Solar, an industry giant that pulled in revenue of $1.2 billion last year. Another Colorado firm, Thornton-based Ascent Solar, is using CIGS.

Abound's finished product uses glass panels very similar to automobile windshields. The panels have proven resilient when pelted with steel balls at the company's research site in Fort Collins. Each module is a double layer of glass, with the solar semiconductor sandwiched in between. Ascent's CIGS product is applied to a thin plastic substrate, making it flexible and light.

"CIGS projects tend to be more expensive than cad tel and will remain so for the next five to six years," explained Mark Chen, Abound's director of marketing.

He added that it is a hard comparison to make, since there are no large-scale CIGS manufacturing facilities operating yet. Ascent Solar recently cut the ribbon on its facility in Thornton with a 30-megawatt production line.

Ascent is focusing on the building integrated photovoltaic market, which encompasses construction materials with solar modules built in, while Abound will hone in on utility and utility-scale projects - solar farms.

"We are trying to get the cost of solar power down to be competitive with fossil fuels," Chen said, a point known as grid parity. Larger scale projects are more likely to accomplish this in the near term.



A place in the market

Technology aside, the company is confident it has a place in the market, even up against First Solar. Chen said that Abound's manufacturing costs will be competitive with the industry leader. First Solar announced it reduced its manufacturing cost in the fourth quarter to 98 cents per watt.

"We believe we have a more efficient manufacturing process," Chen said, calling it the company's "secret sauce" but divulging no more. It's at least as cost effective as the methods already being used and "certainly" more scalable, leading to lower capital expenditures.

Abound is seeking funds to demonstrate that scalability. The company applied in February for a loan guarantee from the U.S. Department of Energy, which recently financed its first loan under a three-year-old program to Fremont, Calif.-based Solyndra Inc. Solyndra's award was part of a round two, $30.5 billion solicitation geared toward renewable energy and nuclear facility projects.

Abound is looking to land the financing for an expansion and second facility. The expansion at the Longmont facility would increase full capacity there by about 50 percent.  The company isn't pinpointing where the second facility would be located, allowing only that it will be in the United States.

"The U.S. is still a maturing market for solar generation, particularly on the utility scale," Chen said.

It's a different story in Europe, where a vast network of integrators has already carved the market into niche spaces. One such company, Wirsol, based in Germany, the top solar market in the world, recently launched into the U.S. market with operations in Fort Collins.

Wirsol opened its office at the Rocky Mountain Innovation Initiative on April 2. G.J. Pierman, director of business development for Wirsol who is running the office, said he will begin adding staff as projects warrant. He also expects that the German headquarters will be sending out its experts to help with training. "By the end of the year, I imagine I'll have between five and 10 employees," he said.

The company has eight to 10 projects in various stages of development right now, including several in Fort Collins.



Global conditions cloudy

Wirsol's move here, Chen added, is a testament to the local strength and support of the industry. But it's the global conditions that have the clouds hovering over the solar market. First Solar CFO Jens Meyerhoff, in a fourth-quarter conference call, said that the company has "identified approximately 10 to 15 percent of potential customer default risk" - meaning that customers are canceling orders, leaving the company to shift the volume to other customers.

"We could see some inventory build in the first half of 2009," he said in the call.

"The market is experiencing some positive and negative forces at the moment," said Rob Stone, an analyst with research firm Cowen and Co. LLC.

Stone said the initial fear with the economic downturn was that governments would pull away from funding solar projects, but the opposite is happening.

"What we're seeing is that the solar market is experiencing a price drop," he said.

Prices during the past few years have been inflated with material costs and large demand. Spain had pumped up demand in the past with a solar subsidy program capped at 1,200 megawatts; 2009's subsidies are capped at 400 megawatts.

Stone said that while estimates call for the number of units sold to increase, revenue might be down because of prices. In all, he estimates solar unit growth between 10 percent and 20 percent this year, with much of the growth coming from Germany, Italy, France, Japan and the United States.

At the same time, prices are likely to drop 20 percent to 30 percent. The U.S. price per watt is expected to drop from $4 in 2008 to $2.50 in 2009. Stone thinks that by the second half of the year, the industry and economy will be bouncing back with growth returning for 2010.



Complicated market

On the technology side, Stone explained there are no clear-cut winners. CIGS appears to have the most potential for efficiency, but it has proven to be a more challenging technology compared to cad tel and amorphous silicon.

"I don't think it's an either/or market," he said. "It's a complicated market. It always will be."

Jim Welch, CEO of Bella Energy, knows a little about the complicated solar market. He's been in the industry for decades.

"The industry has been experiencing explosive growth over the past couple of years," he said. "We've been doubling every year,"

Four years ago, Bella Energy, then in its infancy, was based in Fort Collins. Now, the company is in Louisville and employs 40 people.

Welch has seen the growth occurring in the state, too. Membership in the Colorado Solar Industries Association where he serves as president and "most senior member" reached 200 this year.

"I think we've made the transition from this being a boutique technology to being a market-ready technology," he said.

Utilities have been the long-standing holdout on solar, but with costs coming down and political support going up, that is changing.

"The holy grail of the solar business is grid parity," Wirsol's Pierman said. It all comes down to cost.

"There are probably less than a handful of companies that have the ability to reach that level in a short amount of time," Pierman added.

Based on market analysis Wirsol has conducted, the cad tel technology that Abound is using has the most potential to reach parity. "I've had the opportunity to go around the world and look at manufacturing companies," Pierman said. "I can tell you that what Abound is doing there is truly unique. They have the opportunity to make a truly world-changing product."