Aaron Bates loves a good comeback story.

His company, Toledo Solar, appears to be on track to scale its cadmium-telluride-based module manufacturing capacity to 2.3 GW by 2027, in part by taking advantage of new federal incentives.

The signs appear positive, but Toledo Solar's story is akin to a Phoenix rising from the ashes; in this case rising from the solar industry's crash of the early 2010s.

Bates makes no bones about the mistakes that that led to that crash, or the "untruths" that he now sees in the resurgence of American solar manufacturing.

Whether or not the American solar supply chain can share in Toledo Solar's comeback story remains to be seen.

Bates was working in turnaround mergers and acquisitions when he came across a unique opportunity.

Around 2010, investment firms had been throwing money at solar companies. But over the next couple of years, foreign manufacturers, primarily from China, decided to undercut the market with artificially cheap products. The U.S. manufacturing base was decimated as a result.

Soon after, Solyndra filed for bankruptcy, just two years after receiving a government-backed $535 million loan from the Obama administration. That much-publicized (and politicized) failure resulted in a black eye the industry still deals with today.

Post-Solyndra, investors fled from solar.

Among the rubble was a company in Toledo, Ohio, called Willard & Kelsey. At one point it had raised $100 million to build a pilot manufacturing line of 100 MW. The firm went bust in 2013.

But one of the company's investors, Jim Appold, saw that Willard & Kelsey hadn't gone under because of technical failure. Instead, he saw value in the company's patents and equipment for something called "vapor transport deposition," a process for producing cadmium telluride thin-film solar cells.

Appold was no solar energy titan. He was an engineer who owned Consolidated Biscuit, one of the largest cookie manufacturing companies in the U.S. Despite the domestic solar industry's broad collapse, Appold chose to keep up the Willard & Kelsey factory, even paying a few engineers to come to the facility a few days a week to keep it humming.

In 2016, Bates was looking for his next career challenge. He met Appold while working with a nonprofit in the Toledo area, where he grew up, and was fascinated by the Willard & Kelsey story.

"Jim one day turned to me at lunch and said, 'Well, you know it's just sitting there. It's been sitting here for years,'" Bates recalled on a recent episode of the Factor This! podcast.

That conversation was an M&A hawk's dream.

Bates started due diligence on the assets and began to assemble a team. He interviewed seemingly anyone who had worked for Willard & Kelsey in an effort to absorb as much institutional knowledge as possible. With Bates showing renewed interest in the technology, many of those former employees quit their jobs to revive the plant, which reopened in June 2019.

The patents and equipment from the former Willard & Kelsey facility used cadmium telluride (CdTe) thin-film processes, the same ones that made First Solar a household name in the utility-scale module arena. First Solar, not coincidentally, operates its gigawatt-scale Ohio manufacturing plant just down the street.

The CdTe manufacturing process relies on a domestic supply chain, instead of the imports that characterize silicon-based module manufacturing. And instead of pursuing utility-scale projects, Bates and the newly rebranded Toledo Solar focused on the residential and commercial market segments.

CdTe solar cells are the second most common PV technology in the global marketplace after crystalline silicon, with a market share of a round 5%. CdTe thin-film solar cells can be manufactured quickly and inexpensively, providing an alternative to conventional silicon-based technologies.

The record efficiency for a laboratory CdTe solar cell is 22.1%, claimed by First Solar. The company also reported its average commercial module efficiency at around 18% as of late 2020. Bates said Toledo Solar's modules registered an 18% efficiency in its most recent quarter.

Cadmium telluride is a direct-bandgap material with bandgap energy that can be tuned from 1.4 to 1.5 (eV). That makes it nearly optimal for converting sunlight into electricity using a single junction. CdTe solar cells use high throughput manufacturing methods to produce completed modules within a matter of hours.

The most common CdTe solar cells consist of a p-n heterojunction structure. As such, they contain a p-doped CdTe layer matched with an n-doped cadmium sulfide or magnesium zinc oxide window layer. 

Typical CdTe thin-film deposition techniques include vapor-transport deposition and close-spaced sublimation. CdTe absorber layers are generally grown on top of a high-quality transparent conductive oxide (TCO) layer—usually fluorine-doped tin oxide (SnO2:F). Cells are completed using a back electrical contact—typically a layer of zinc telluride (ZnTe) followed by a metal layer or a carbon paste that also introduces copper (Cu) into the rear of the cell.

The big dog in the solar module universe is crystalline silicon PV cells, which represent more than 85% of the world's PV cell market.

A standard industrially produced silicon cell offers higher efficiencies than any other mass-produced single-junction device. Higher efficiencies reduce the cost of the final installation because fewer solar cells need to be manufactured and installed for a given output.

Crystalline silicon cells typically achieve module lifetimes of 25 years or more, and exhibit little long-term degradation. And, silicon is the second most abundant element in Earth's crust (after oxygen).

But the crystalline solar module manufacturing process in the U.S. today relies largely on imports. A report by the Ultra Low Carbon Solar Alliance found that Chinese producers hold 83% of global capacity for polysilicon production, 96% for wafers, and 79% for cells.

Toledo Solar's Bates is all for restoring an American manufacturing base for the solar industry. But he also is quick to point to misconceptions, or "untruths," as he puts it, about American-made solar modules.

For a start, the U.S. produces about 10 GW of solar modules each year. First Solar and Toledo Solar account for 2,600 MW and 100 MW of that capacity, respectively.

The remaining share of U.S. production capacity is held by silicon-based manufacturers and refers primarily to module assembly. The U.S. has virtually no polysilicon, wafer, or cell production capacity. As a result, manufacturers must source those pieces of the value chain from elsewhere.

Inadequate trade guardrails to protect domestic manufacturers from being undercut by foreign bad actors have rendered domestic manufacturing of silicon semiconductors for photovoltaics "impossible," Bates said. "It just is," Bates said. "You can't have it both ways."

Bates said he believes the Biden administration was unfairly maligned by the solar industry for attempting to enforce those guardrails.

Last year, the Commerce Department launched an investigation into whether modules imported from Southeast Asia were circumventing trade duties levied a decade ago against China. Trade groups responded with a coordinated multi-million dollar pressure campaign against the White House in an effort to quash the Auxin Solar tariff petition. The campaign at times accused the administration of turning its back on clean energy for allowing the Commerce investigation to proceed.

To a large extent, the pressure campaign worked. President Joe Biden paused for two years new tariffs on modules imported from Southeast Asia. Bates said he did not support that decision, but said the move should give silicon-based module importers more than enough runway to cope with supply side changes. The temporary reprieve was also a victory for foreign manufacturers, he said.

Bates is admittedly biased in favor of CdTe thin-film modules, but he said he wants to see a robust U.S. manufacturing base that includes silicon semiconductor manufacturing.

The newly enacted Inflation Reduction Act provides incentives for each stage of the manufacturing process, including polysilicon, wafer, and cell production. Bates said he believes that domestic silicon-based module manufacturing is only feasible in conjunction with a fully integrated production process. Otherwise, it's too costly to import so many pieces of the puzzle.

The Factor This! podcast, recorded live from RE+ in Anaheim, analyzed the impact of the Inflation Reduction Act on domestic solar manufacturing. "The race is on to meet demand with made-in-America solar modules" featured Lightsourcebp Americas CEO Kevin Smith, Cypress Creek Renewables VP of Engineering Luke O'Dea, and Qcells North America Head of Market Strategy and Public Affairs Scott Moskowitz. Subscribe wherever you get your podcasts!

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South Korean solar giant Hanwha may have validated that reasoning on Jan. 11, when it announced, through its subsidiary Qcells, plans to invest $2.5 billion to build out a "complete" silicon-based solar supply chain in the U.S. Qcells intends to break ground in Georgia during the first quarter on a facility to manufacture 3.3 GW of solar ingots, wafers, cells, and finished panels. 

"I view this as the way solar should work in the U.S.," Bates said in an email to Renewable Energy World following the Qcells announcement. "It is the only fair and proper way to do this."

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About the sponsor

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