Big News? Applied Materials and QS Solar Claim Dollar Per Watt Solar Panels

(MoneyWatch)  A year ago when I talked to execs at startups making thin-film solar panels, it was typical to hear creative variations on their hopes of making solar panels for $1 per watt -- an important, if almost entirely arbitrary, number the industry had come up with to symbolize price parity with fossil fuels. Most made sure to stress that nobody was, at the time, capable of making panels so cheaply; afterward, they often went to some length to convince me they would be first. But was I really listening? Nah. Promises, as they say, are cheap.

Now it's becoming pretty common to hear some companies say that they're close, or even there. That's apparently what both Applied Materials and QS Solar have claimed, according to the European organization SolarPlaza, which is covering the Thin-film Future conference in Germany. The articles are here and here.

Both companies use amorphous silicon thin film, which generally means a low efficiency but extremely cheap material that can be coated on. The most common alternatives are First Solar's CdTe chemistry, and the CIGS used by companies like Miasole and Nanosolar. However, there's no reason to write off amorphous silicon's competitors; a few are likely close behind (First Solar definitely is). And it's worth noting that Optisolar, a thin film company that recently closed down, also relied on amorphous silicon.

Between the two named by SolarPlaza, it's more difficult to gauge how realistic the claims from QS Solar are, as it's a private Chinese company with less than 100 megawatts of production capacity. But Applied Materials has a somewhat different business model. Like Europe's own Oerlikon Solar, the company just makes the equipment that makes solar panels.

That likely means that production of Applied Materials panels will be more quickly scalable, because it will be split among many client companies. Granted, Applied just lost most of a huge $1.9 billion order. But financial problems due to current market conditions won't last forever.

That being the case, we may yet get a chance to find out whether $1 per watt manufacturing will really be competitive with natural gas, much less coal-generated power.