From Spandex to Solar: DuPont Poised for PV Growth

Look at a solar panel and you might think of its manufacturer or installer, or maybe – if you’re a true solar geek – the company that made the cells inside the panel. But when Marc Doyle, global business director for DuPont Photovoltaic Solutions, looks at a panel he sees all the little overlooked pieces that enable it to work properly: the conductive silver metal lines, the front and back sheets and the encapsulant to protect the cells. That’s because nearly all are made by DuPont (s DD), and as Doyle puts it, “What you’re looking at is a bunch of DuPont stuff. But nobody looks at it this way except for DuPonters.”

Because while DuPont, one of the world’s largest chemical companies, has been actively providing critical materials to the solar industry for the last 25 years, solar is one of the last industries that the company’s name conjures up for most people –- well behind, say, chemicals, agriculture or materials like nylon and lycra (commonly called spandex). Now DuPont is looking to change that.

DuPont has an aggressive goal to boost its solar business from $400 million in 2008, to more than $1 billion in solar sales in 2012 — a big number in the solar biz, but a figure that would actually make up less than 4 percent of DuPont’s overall 2009 sales of $27.33 billion. Doyle told us DuPont is on track to meet that goal. Its sales in the solar PV market grew more than 30 percent in 2009 and are expected to rise 25 percent this year.

DuPont has been ramping up its solar production capacity in recent months. The company is spending $295 million to expand its production capacity for Tedlar backsheet films — which provide electrical insulation and protect panels from UV light, moisture and weather — by enough to enable a whopping 10 gigawatts of panels. Earlier this month, DuPont opened a new photovoltaic lab in Geneva, and its thin-film solar factory in Shenzhen, China is now up and running at full capacity.

DuPont has also introduced new substrate materials for thin films, as well. It’s a change for a company that has been providing essentially the same materials – albeit ever new and improved versions – to the solar industry for decades. DuPont claims its polyimide and polyester films, on which thin-film companies deposit conductive solar materials, can handle higher temperatures without expanding as much as other films, leading to potentially greater reliability and productivity.

The solar segment gets “more than our fair share” of research dollars and attention from leadership, Doyle said. As proof, Doyle pointed to the fact that Ellen P
Kullman, DuPont’s CEO of four months, recently spent half an hour talking with him about grid parity.

DuPont’s growing commitment to solar is part of a larger trend of massive, multi-faceted manufacturing companies entering clean energy and energy efficiency from other industries, said Ron Pernick, a principal at research firm Clean Edge. Other examples include networking giant Cisco (s CSCO) moving into the smart grid and semiconductor-equipment manufacturer Applied Materials (s AMAT), which sells thin-film solar manufacturing equipment.

The company faces its share of challenges, however. With prices for conventional silicon-based solar panels falling steadily, and a risk-averse economic climate making it difficult for new technologies to score financing, thin-film technologies are “really taking it on the chin,” as Doyle put it to us. Even in its conventional solar business, DuPont has the difficult task of trying to predict how much the market is going to grow or shrink and has to prepare for it, often years in advance:

“We have such a significant market share position in some of these materials that we have to be ready if the market goes up 30 percent, 60 percent or 90 percent – and it’s hard for chemical companies to risk sitting around with an empty plant [if we overshoot the target]. It’s not the type of industry where you can get it on the dot.”

Right now, DuPont’s factories are far from sitting empty. After seeing a dip last year, its solar business began to see a pickup in the fourth quarter as manufacturers began ordering in anticipation of increased demand, Doyle said. “Things are really tight for a lot of materials right now, and everyone’s waiting to see if that will continue.”

In spite of its challenges, DuPont has the potential to make an increasingly serious impact on the solar industry if it stays committed, analysts say. Its materials could play a key role in helping to improve both cell and manufacturing efficiency, reducing the price of solar modules. And Pernick says a company like DuPont — with plenty of experience in the construction industry – could be what the industry needs to finally integrate solar into building materials in a way that could make solar power more ubiquitous. And DuPont certainly has more solar plans in the pipeline: You can expect the company to announce a couple of new products and new partnerships in the next few months, Doyle said.