SunPower breaks world record for solar cell efficiency

Silicon Valley-based solar panel manufacturer SunPowerannounced on Wednesday that it has manufactured a full-scale solar cell with a sunlight to electricity conversion efficiency of 24.2 percent, a new world record.

The record for the large-area silicon cell was confirmed by the U.S. Department of Energy's National Renewable Energy Lab.

Naturally, a more efficient solar cell means a product that can better handle an intermittent power source such as the sun -- and, of course, means a product that pays for itself more quickly.

As a result, increased efficiency reduces the cost per watt and cost per kilowatt-hour.

"SunPower's research and development and engineering teams have increased cell efficiency by a full four percentage points over the last five years while radically driving down manufacturing costs," founder and CTO Richard Swanson said in a statement.

In fact, boosting its core technology is part of the company's recipe for success.

At the Credit Suisse Future of Energy Conference on June 3, SunPower CEO Tom Werner offered insight into the company's plans to drive down the cost of solar energy and preserve its title as the "world's highest energy density solar company":

What you've seen us do over the last five years is reposition the company to capitalize on that core technology and to emphasize downstream integration and owning the outbound channel. And you see that we're really the only company -- arguably, First Solar a little bit -- but we're really the only company that has taken a strategic position in the outbound part of the channel, and we've spent the better part of $1 billion creating that unique position.

That doesn't mean we're abandoning our core technology. In fact, we had just announced a joint venture where we're going to accelerate the ramp of our third fab, our $1 billion fab in Malaysia. We're going to lower costs faster and accelerate the buildout of that fab, so we're making sort of a more significant investment in our technology. At the same time, investing in the outbound channel, because we fundamentally believe that the market's going to be a demand-driven market-- or said alternatively, is going to be a normal market where you actually have to sell your product, and you're not just allocating your product.

In a demand-driven market, we believe that the profitability is going to move to the outbound part of the value chain and historically, that has been the case in solar. Now, the market today is an allocated market. So, if we structured our company for a demand-driven market, then we believe we're structured for what's going to happen, or the way the market's going to evolve, and we believe the power of our model will show itself over the next few quarters going into 2011, particularly as the supply/demand balance changes.

In a cost-sensitive market, that's not a bad idea.

But there's a catch. Writing at GreenTechSolar, Michael Kanellos describes the company's looming hurdle:

The company faces the ominous laws of physics. Crystalline silicon solar panels can, in theory, convert 29 percent of the light that strikes them into electricity, but the real number is closer to 25 percent, SunPower CEO Tom Werner told me last year. Thus, the 24.2 percent figure is awfully close to the realistic max.

Can SunPower find a better way to make solar cells?

This post was originally published on Smartplanet.com