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Toledo Solar founder and CEO Aaron Bates is featured in Episode 31 of the Factor This! podcast. Subscribe today wherever you get your podcasts.

This episode is sponsored by Heila Technologies, a Kohler Company. Scroll down to see how Heila is changing how complex microgrids are managed and operated while making each asset in the system smarter and more efficient.

Aaron Bates loves a good comeback story.

His company, Toledo Solar, appears to be on track to scale its cadmium-telluride-based module manufacturing capacity to 2.3 GW by 2027, in part by taking advantage of new federal incentives.

The signs appear positive, but Toledo Solar's story is akin to a Phoenix rising from the ashes; in this case rising from the solar industry's crash of the early 2010s.

Bates makes no bones about the mistakes that that led to that crash, or the "untruths" that he now sees in the resurgence of American solar manufacturing.

Whether or not the American solar supply chain can share in Toledo Solar's comeback story remains to be seen.

Founding Toledo Solar

Bates was working in turnaround mergers and acquisitions when he came across a unique opportunity.

Around 2010, investment firms had been throwing money at solar companies. But over the next couple of years, foreign manufacturers, primarily from China, decided to undercut the market with artificially cheap products. The U.S. manufacturing base was decimated as a result.

Soon after, Solyndra filed for bankruptcy, just two years after receiving a government-backed $535 million loan from the Obama administration. That much-publicized (and politicized) failure resulted in a black eye the industry still deals with today.

Post-Solyndra, investors fled from solar.

Among the rubble was a company in Toledo, Ohio, called Willard & Kelsey. At one point it had raised $100 million to build a pilot manufacturing line of 100 MW. The firm went bust in 2013.

But one of the company's investors, Jim Appold, saw that Willard & Kelsey hadn't gone under because of technical failure. Instead, he saw value in the company's patents and equipment for something called "vapor transport deposition," a process for producing cadmium telluride thin-film solar cells.

Appold was no solar energy titan. He was an engineer who owned Consolidated Biscuit, one of the largest cookie manufacturing companies in the U.S. Despite the domestic solar industry's broad collapse, Appold chose to keep up the Willard & Kelsey factory, even paying a few engineers to come to the facility a few days a week to keep it humming.

In 2016, Bates was looking for his next career challenge. He met Appold while working with a nonprofit in the Toledo area, where he grew up, and was fascinated by the Willard & Kelsey story.

"Jim one day turned to me at lunch and said, 'Well, you know it's just sitting there. It's been sitting here for years,'" Bates recalled on a recent episode of the Factor This! podcast.

That conversation was an M&A hawk's dream.

Bates started due diligence on the assets and began to assemble a team. He interviewed seemingly anyone who had worked for Willard & Kelsey in an effort to absorb as much institutional knowledge as possible. With Bates showing renewed interest in the technology, many of those former employees quit their jobs to revive the plant, which reopened in June 2019.

The patents and equipment from the former Willard & Kelsey facility used cadmium telluride (CdTe) thin-film processes, the same ones that made First Solar a household name in the utility-scale module arena. First Solar, not coincidentally, operates its gigawatt-scale Ohio manufacturing plant just down the street.

The CdTe manufacturing process relies on a domestic supply chain, instead of the imports that characterize silicon-based module manufacturing. And instead of pursuing utility-scale projects, Bates and the newly rebranded Toledo Solar focused on the residential and commercial market segments.

What are cadmium telluride thin-film solar cells?

CdTe solar cells are the second most common PV technology in the global marketplace after crystalline silicon, with a market share of a round 5%. CdTe thin-film solar cells can be manufactured quickly and inexpensively, providing an alternative to conventional silicon-based technologies.

The record efficiency for a laboratory CdTe solar cell is 22.1%, claimed by First Solar. The company also reported its average commercial module efficiency at around 18% as of late 2020. Bates said Toledo Solar's modules registered an 18% efficiency in its most recent quarter.

Cadmium telluride is a direct-bandgap material with bandgap energy that can be tuned from 1.4 to 1.5 (eV). That makes it nearly optimal for converting sunlight into electricity using a single junction. CdTe solar cells use high throughput manufacturing methods to produce completed modules within a matter of hours.

The most common CdTe solar cells consist of a p-n heterojunction structure. As such, they contain a p-doped CdTe layer matched with an n-doped cadmium sulfide or magnesium zinc oxide window layer. 

Typical CdTe thin-film deposition techniques include vapor-transport deposition and close-spaced sublimation. CdTe absorber layers are generally grown on top of a high-quality transparent conductive oxide (TCO) layer—usually fluorine-doped tin oxide (SnO₂:F). Cells are completed using a back electrical contact—typically a layer of zinc telluride (ZnTe) followed by a metal layer or a carbon paste that also introduces copper (Cu) into the rear of the cell.

Solar's big dog

The big dog in the solar module universe is crystalline silicon PV cells, which represent more than 85% of the world's PV cell market.

A standard industrially produced silicon cell offers higher efficiencies than any other mass-produced single-junction device. Higher efficiencies reduce the cost of the final installation because fewer solar cells need to be manufactured and installed for a given output.

Crystalline silicon cells typically achieve module lifetimes of 25 years or more, and exhibit little long-term degradation. And, silicon is the second most abundant element in Earth's crust (after oxygen).

But the crystalline solar module manufacturing process in the U.S. today relies largely on imports. A report by the Ultra Low Carbon Solar Alliance found that Chinese producers hold 83% of global capacity for polysilicon production, 96% for wafers, and 79% for cells.

Solar's 'untruths'

Toledo Solar's Bates is all for restoring an American manufacturing base for the solar industry. But he also is quick to point to misconceptions, or "untruths," as he puts it, about American-made solar modules.

For a start, the U.S. produces about 10 GW of solar modules each year. First Solar and Toledo Solar account for 2,600 MW and 100 MW of that capacity, respectively.

The remaining share of U.S. production capacity is held by silicon-based m