While China scales high-efficiency solar panel manufacturing, the US is stuck with PERC

This past year has been the season for intellectual property (IP) battles within the solar panel space. Most global solar panel manufacturers are involved in patent infringement lawsuits in U.S. courts in some way — either suing or being sued over tunnel oxide passivated contact (TOPCon) technology. Who has the right to produce advanced n-type solar panel designs in the United States means more than just determining ownership of a novel technology. Drawn-out legal fights could set the United States even further behind China in solar panel manufacturing ability.

Without access to n-type TOPCon cells, American panel assemblers are defaulting to p-type passivated emitter rear contact (PERC) cells for their domestic designs. P-type cells have reached their maximum efficiency, but n-type cells can still become even better. While Asian brands continue to grow their n-type output, American brands are stalled out with their — still respectable, but ultimately inferior — p-type designs.

“There’s nothing wrong with p-type, it’s just that n-type is the next evolution,” said Elissa Pierce, solar module technology and markets research analyst for Wood Mackenzie. “P-type is being phased out because of its lower efficiencies. A lot of the top Chinese manufacturers are not even doing PERC anymore.”

Wood Mackenzie has found the Chinese solar panel manufacturing market to be producing 25% PERC and 75% n-type. Alternatively, Pierce is tracking 51.5 GW of operating module capacity in the United States, with 49% PERC, 30% n-type and 21% thin-film.

“It’s rare to come across new PERC capacity in China and even Southeast Asia,” she said. “The U.S. is definitely a little behind there.”

American solar panel manufacturers know they’re behind too. Jim Wood, CEO of Houston-based solar panel assembler SEG Solar, said his company would be more profitable if it could make n-type panels, but the company only has access to p-type.

“Globally, the issue isn’t the same as it is in the United States. Everywhere else, they’re continuing to scale n-type,” he said. “If you’re leveraging more watts over the same fixed costs on a daily basis, it’s much better. We’re disappointed that we can’t do that in the United States.”

Technology review

A conventional crystalline silicon solar cell consists of silicon wafer layers doped with various chemicals to encourage power production through a p-n junction. A positively charged p-type wafer layer and negatively charged n-type wafer layer are combined, with the lower layer noting the cell distinction. A p-type wafer usually is doped with boron, which has one fewer electron than silicon (making it positively charged). An n-type wafer is doped with phosphorus, which has one more electron than silicon (making it negatively charged).

Although the first solar cell invented by Bell Labs in 1954 was n-type, the p-type structure became more dominant due to demand for solar technologies in space. P-type cells proved to be more resistant to space radiation and degradation, and their tech trickled down to the consumer market.

In the last decade, more solar manufacturers began adopting n-type structures as “high-efficiency” became a stronger marketing tool. The use of phosphorus instead of boron in n-type cells provides immunity to boron-oxygen defects, which cause decreased efficiency and purity in p-type structures. N-type cells are therefore more efficient and not affected by light-induced degradation.

In general, n-type cells are more efficient and have longer lifespans than p-type cells, but p-type cells are more common and slightly cheaper to manufacture.

Now, a refresher on PERC and TOPCon: PERC cell technology was first developed in the 1980s and adds an extra layer to the rear-side of a silicon cell. Since PERC has been around so long and is the default silicon technology, it’s typically applied to p-type cells. PERC properties can be used with n-type cells, although that’s usually called high-efficiency passivated emitter rear totally-diffused (PERT) technology. Introduced in 2013, TOPCon pairs a tunneling oxide layer with an n-type PERT cell. The thin oxide layer on top of the cell acts as a barrier to contain unabsorbed light, making TOPCon cells more efficient and more powerful.

Generally, PERC cells are great, but TOPCon are better, especially in bifacial setups where they can absorb even more light from both sides of the module. Not all n-type designs are assumed to be TOPCon — back-contact and heterojunction technology (HJT) designs are both rooted in n-type structures — but having a TOPCon license is a surefire way to access n-type advantages.

American manufacturing market

The growing U.S. silicon solar panel market has depended on imported cells as the upstream supply chain gets established, and PERC cells have been a straightforward buy. Only two cell outfits are now in operation — Suniva in Georgia and ES Foundry in South Carolina — and the pair is making PERC designs, as neither explicitly has TOPCon licensing. That doesn’t leave many options for domestic panel assemblers to get ahead.

SEG Solar, which sources cells from Southeast Asia and eventually its under-construction facility in Indonesia, started assembling solar panels last year and averages 4,000 modules daily. Wood said customers are requesting p-type panels for the same reason SEG is stuck using PERC cells — the unknowns around n-type ownership in the United States.

“The market would really prefer n-type. You’re getting better energy density on rooftop and ground-mount sites. The world moves around internal rate of return, and they’re getting better returns on their project using n-type,” he said. “Unfortunately, there are some challenges in the United States with n-type, so we have seen many developers and IPPs pivot back to p-type. We’re having requests for very large quotes, out to 2027, for p-type. The issues around IP are scaring customers, and they’re buying what they feel is safe.”

In Tomball, Texas, Imperial Star Solar is operating a 2-GW solar panel assembly facility that is also using p-type PERC cells. Marvin Yang, sales and business development manager, said Imperial’s customers may not be specifically requesting n-type designs, but they are demanding higher power classes.

“Many customers prioritize power output to fit their system design, focusing on higher power within specific form factors to meet both output and compatibility requirements,” he said. “Looking ahead, Imperial Star Solar anticipates a trend toward larger and more powerful panels. For domestically manufactured panels, the key will be striking a balance between technology, pricing and form factors to enable clients to optimize their system designs with reliable offerings.”

Pierce with Wood Mackenzie said once some of the IP lawsuit dust settles, existing PERC cell manufacturers like Suniva and ES Foundry can easily upgrade to TOPCon production.

“Many manufacturers are doing PERC right now and have everything in place to upgrade to TOPCon,” she said. “But there’s a lot of hesitancy. Not everyone has the money and lawyers that [global firms] have, so they don’t want to risk a lawsuit.”

There will be some American-made n-type TOPCon designs soon enough, especially as global names with patents like Canadian Solar, Qcells and Trina (through T1 Energy) finish building their own cell factories in the United States, but non-affiliated panel assemblers won’t have access to that exclusive tech. Only one new name has recently secured a TOPCon license: Talon PV.

Talon PV expects its 4-GW cell factory near Houston to be operational next year, and the company is licensing n-type TOPCon technology from First Solar, which gained the silicon patent through an acquisition. Talon has signed a cell supply deal with SEG Solar — a significant domestic advantage for the fellow Texas manufacturer.

“We chose to work with Talon and have a lot of confidence in their ability to deliver n-type next year. A lot of the calls I’m responding to are companies wanting to pivot from p-type to n-type with Talon, because they have some comfort around that,” Wood said.

Not only could SEG Solar then produce better-performing panels, the company could also receive more incentives for manufacturing n-type designs. The manufacturing production tax credit within the IRA (45X) credits panel manufacturers 7¢/W on each produced module.

“You go from a 550-W p-type to a 595-W n-type and you’re getting significantly more incentives per module coming off the line. You’re selling and producing more, so your economy of scale is much better,” Wood said. “We would greatly prefer to only be making n-type modules in Houston.”

Pierce said the U.S. manufacturing market could actually benefit from lengthy TOPCon patent infringement lawsuit timelines — it might push new domestic manufacturers to immediately jump to HJT. This n-type technology does require extra production steps to add amorphous silicon into the mix, but if every new factory in the United States is a blank page, it’s possible to look beyond TOPCon.

“The U.S. is kind of in a good position, because everything is being built brand new. If you’re just building something brand new, then why not go to heterojunction?” Pierce said. “Everyone really thinks HJT is the next step after TOPCon. TOPCon is the intermediary, just because of how easy it is to convert from PERC. It’s harder to make that jump from PERC to heterojunction.”

Until then, U.S. projects seeking domestic silicon panels will likely feature p-type designs. Any solar manufacturing is better than none in the time of tariffs and domestic tax credits, but technology advancements will eventually be necessary to compete with China.

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