LONDON — Thin-film solar panels are expected to increase their share of the total volume of photovoltaic devices sold over the next five years, up from 14 percent last year to 27 percent in 2013, according to market trackers IC Insights.

TF panels, notably the cadmium telluride types made by First Solar Inc., have already established themselves as offering a lower price-per-installed watt than traditional solar panels made using silicon wafers, IC Insights suggests. The researchers estimate the 876 megawatts of TF modules sold in 2008 will increase to 5.2 gigawatts in 2013, a compound annual growth rate of 43 percent.

IC Insights also predicts in its latest look at the sector that pricing for solar panels will take a big dip this year, and then return to moderate decreases in price per watt over the remainder of the 2009-2013 forecast period.

The researchers note that there is fierce competition amongst solar PV makers, with the top supplier in 2008 holding only 9 percent market share, and 13 other suppliers each with 4 percent or more. IC Insights says supplier rankings will continue to change.

They add solar-grade polysilicon will remain in oversupply throughout the forecast period. New sources of lower-cost supplies, such as upgraded metallurgical grade (UMG) silicon, will help drive down wafer costs.

The researchers warn equipment suppliers to the solar device industry that they neeed to re-tune their business strategies as device makers struggle with ballooning inventories and plummeting capacity utilization.

IC Insights' growth estimate for TF panels, while positive, seems to be lower than many recent solar industry forecasts. One of the reasons, the researchers say, is that TF panel makers have struggled to push panel efficiencies above about 11 percent, despite research-lab devices with efficiencies ranging from 16 to 20 percent.

However, such efficiencies have been difficult to achieve in volume production, and IC Insights suggests there is little indication of a breakthrough in this regard.

Thus, despite their lower cost per watt, TF panels are predominantly used in large-scale ground based utility installations. In almost all rooftop applications, panels made with silicon-wafer-based solar cells are more attractive because their higher efficiency -- ranging from 14 percent to 21 percent -- offers better performance for a limited rooftop area.

IC Insights suggests that after several years of stellar growth — capped by 99 percent growth in 2008 — the solar industry is being slammed during the current economic downturn.

They estimate that after a 22 percent drop in installed megawatts of solar PV capacity during 2009, strong growth will return in 2010, as new government incentive programs gain traction in the U.S., Asia, and Europe.

They add a major factor coming to the aid of wafer-based cell makers is the increasing availabity of polysilicon supplies in 2008, 2009, and 2010.

Freed of the capacity constraints for wafers and with silicon costs dropping, wafer-based solar cell makers will concentrate on improvements in device design and manufacturing techniques that allow them to drive device efficiency up and cost-per-watt down.

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