Markets

Walmart's Thin-Film Solar Play Is An Experiment, Not an Endorsement

By Kirsten Korosec

Updated on: September 21, 2010 / 6:47 PM EDT / MoneyWatch

Walmart (WAL) will expand its investment into renewable energy with plans to add solar arrays -- many of them of the lower cost thin-film solar variety -- on as many as 30 stores in California and Arizona, an announcement that was immediately viewed as a ringing endorsement of thin-film solar.

Walmart's investment is noteworthy and holds particular promise for start-up MiaSolÃ©, one of the two thin-film solar makers involved in the deal. And it does give a boost to thin-film solar panels, which look like the traditional crystalline panels, but require fewer raw materials to manufacture, making them cheaper and the installations lighter. Thin-film is less efficient than traditional crystalline silicon solar cells, although there have been advances recently.

For Walmart, it's really more of an experiment or test to find right the technology to meet its renewable energy goals. Walmart is leveraging its global scale -- imagine the roof space over its 8,400-plus stores -- to find the most efficient and low cost renewable technology to reduce its energy expenses.

A quick primer on the deal:

Walmart and the Environmental Defense Fund spearheaded the solar project;
SolarCity will design, install, own and maintain the new solar power systems at Walmart locations;
First Solar uses an older version of the technology called cadmium telluride and Walmart said in its announcement that use of this could help make the case for other businesses to adopt the technology;
MiaSolÃ© uses copper indium gallium selenide (CIGS) thin film. Walmart said large scale installation of CIGs could spur development of the technology and bring it to market quicker.

It's a smart approach and one Walmart is comfortable with. The company is trying out two types of thin-film solar and isn't buying the solar systems, instead allowing SolarCity to own and maintain them. Walmart will buy the electricity generated from the panels. This solar-for-lease approach, which is atypical for installers, could be attractive for big box retailers and other commercial businesses who don't want the hassle of owning the system.

There are a couple of challenges for thin-film solar and the companies that hope to see it flourish. A few years ago, proponents of thin film believed it would be much cheaper than traditional crystalline silicon solar panels. Low-cost Chinese silicon manufacturers have pretty much blown that premise to bits, making it difficult for thin film to scale up. If Walmart's thin film experiment produces the results it's looking for, there could be more installations. Meaning a ticket to scalability, lower costs and the ability to compete with traditional solar panels makers.

Photo of thin-film solar on Walmart's Mountain View, Calif. store from Walmart