First Solar, the first company to set up volume production of thin-film photovoltaics, has just gone public, and the market loves them.  According to Morningstar, by mid-day on Monday 11-20, First Solar’s stock (FSLR) has rallied 24% after their IPO on Friday 11-17.

While the U.S. has fallen behind in production of crystalline silicon photovoltaics, it appears the U.S. manufacturers are poised to take the lead in worldwide thin film photovoltaic production. 

The photovoltaic tidal wave gathers…  Photo: DayStar TechnologiesÂ

Along with First Solar, U.S. companies already shipping thin film photovoltaics include DayStar Technologies, and Unisolar.  Joining them soon are silicon valley debuts Nanosolar and Miasole, who both have thin film manufacturing lines under construction.

If the forecast manufacturing levels of just these five U.S. companies are to be believed, by early 2008 they are going to be producing nearly 1.0 gigawatts of photovoltaics per year, and that is just the beginning. 

This compares to the entire world production of photovoltaics in 2005 totalling only 1.6 gigawatts, and thin film only accounted for about 100 megawatts of that total.  Photovoltaic manufacturing using both conventional means, using silicon ingots, and using thin film technology, is about to explode.

For photovoltaics to contribute significantly to global energy production, sustained exponential growth is necessary.  But this appears possible, given the number of credible entrants into the thin film photovoltaic market, and the apparent ability of these companies to quickly establish production lines that within 18 months could easily double the manufacturing output of photovoltaics worldwide.

Moreover, the supply and the cost of raw materials necessary to manufacture thin film photovoltaics does not appear to be a constraint, as it is with with those relying on crystalline silicon.  As a result, thin film photovoltaics are cheap and getting cheaper.  In First Solar’s S-1 Statement, filed prior to their IPO, they state “During the three months ended September 30, 2006, we produced approximately 18MW of solar modules at a manufacturing cost per Watt of $1.42.”  This cost includes about $.07 for expensed stock options, which the accountants among us know is a theoretical cost at best.

First Solar claims they could soon be the first company to manufacture photovoltaics at a cost that would be competitive with conventional electricity, which would require their costs to get down to around $.75 per watt.  They are well on their way, and if the claims of newcomers such as Nanosolar come to fruition, they won’t be alone.