Solutia Hopes for Sunny Days With Solar Module Product

By Rachel Melcer, St. Louis Post-Dispatch

Jul. 22–Solutia Inc. says it has seen the light. Sunlight, that is.

In the Town and Country-based company’s vision, it is streaming down on solar energy modules that are durable and weatherproof because they contain Solutia’s proprietary glass-interlayer technology.

The company last week said it is selling polyvinyl butyral interlayers, or films, to several companies that make the world’s largest thin-film photovoltaic modules, the most cost-efficient type for converting sunlight into energy. In June, Solutia announced the debut of its Saflex Photovoltaic business, aimed at capturing a market that is growing by nearly 40 percent a year.

“We see this as a fast-lane business,” said Luc De Temmerman, president of the Saflex unit that also makes films for adding sound attenuation, sunlight-filtering, durability and other desirable traits to glass in buildings and cars.

Making films for solar cells fits with Solutia’s core expertise, he said. But it requires more agility to keep pace with a market that is rooted in the rapid-fire, high-tech world of Silicon Valley.

De Temmerman is hiring staff, and has moved experts from other business units into the photovoltaic realm. Last month, Solutia began production of large films for solar cells at a plant in Ghent, Belgium, and has focused a Massachusetts research and development center on solar-energy innovation.

That gives Solutia an edge over competitors that are just now getting into the business, De Temmerman said.

DuPont, for example, broke ground last month in China on a plant to manufacture films for solar cells. It announced plans for a related research facility, but spokesman Dan Turner said a construction date has not yet been set.

“We don’t have that panic of how do we provide (manufacturing) capacity. We are there,” De Temmerman said. “This new market is coming on line, so we are really in poll position.”

The sun still provides less than 1 percent of the world’s primary energy supply, according to a report by the energy practice of Chicago-based Navigant Consulting Inc. But that is increasing, and the market for photovoltaic modules has grown at a compound annual rate of 35 percent over the last 30 years; and even more rapidly since 2001.

Much of this growth is driven by government incentives for solar energy production in foreign markets including Germany, Spain and Japan. India also is hot on sun power.

And thin-film cells — the type that Solutia’s technology fits — last year accounted for 11 percent of worldwide photovoltaic production and more than 30 percent in the U.S., according to the Solar Energy Industries Association, a Washington-based trade group. The U.S. leads the world in the manufacture of thin-film technologies, with nearly half the global output.

Thin-film photovoltaic cells are primarily used for solar “farms,” large installations that cover a lot of ground and produce at least one megawatt of electricity.

The development of solar power “is real and it’s being driven by global markets. But there’s huge potential in the U.S. as well,” said Monique Harris, a spokeswoman for the association. Congress is weighing a bill to extend solar-energy incentives that otherwise will expire this year — and its passage would be a boon for the industry.

Demand for renewable energy, including solar power, also is being driven by sky-high oil prices and consumers’ increasing desire to move away from carbon-based fuel sources and toward something more environmentally friendly.

Market analysts say solar power will gain an edge if it reaches “grid parity” — the point where subsidies are no longer needed to make it as affordable as electricity purchased from the local utility.

And thin-film photovoltaic cells are going a long way toward getting it there, Harris said. These cells are less efficient at converting sunlight to energy than other types, such as those used on rooftops. However, they are much more flexible and easy to install in large spaces such as solar farms. And new, larger thin-film cells — the kind for which Solutia just began supplying interlayers — are four times the size of the prior industry standard, cutting installation costs by more than 20 percent.

“It’s so much cheaper that you can lay larger amounts, and it’s still bringing down the cost per watt” for power generation, Harris said.

Rich Daniels, vice president for innovation and growth in Solutia’s Saflex unit, also believes the company will be able to improve the energy-conversion efficiency of thin-film cells with new technology.

“This is a new market, but it builds on our strengths in the business,” he said. These include many years of window-film research, innovation and production experience.

Solutia is under pressure to innovate and make the most of its Saflex business.

The company in June said it may sell the nylon division that in 2007 comprised just more than half of its total $3.7 billion in net sales. Record-high oil prices — the very factor that makes solar energy increasingly attractive — drove that petroleum-dependent division into the red this year.

With the Saflex photovoltaic business launch, Solutia hopes to make hay while the sun shines. It will need to replace revenue lost if a nylon sale goes through.

“Solutia wants to focus on high-growth businesses with products that are needed,” De Temmerman said.

rmelcer@post-dispatch.com — 314-340-8394

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