Researchers are developing solar technologies now that will replace what’s on the market today with more efficient and less expensive alternatives within 3 to 6 years, according to a report from Lux Research.

Profit margins are tight for solar companies today, said Lux analyst Fatima Toor. There’s a lot of competition and the panel prices are low, benefiting consumers and driving down solar stock values.

“Innovations in materials and cell design will drive down the cost per watt,” Toor said. “That’s going to improve profit margins.”

Solar companies will be able to bring consumers costs down below $1 per watt and to grid parity by reducing their supply costs and increasing profit margins.

There are a few technologies and innovations that stand out with market potential, Toor said.

The key ingredient for a successful new invention in the industry is that is stay within the confines of existing infrastructure and strive to improve systems that already exist, Toor said.

Solyndra and Evergreen Solar went bankrupt because they were developing new innovative solar options that didn’t fit into the current paradigm.

The first technology with great potential is direct solidification. Silicon wafers are normally cut from large sheets of solidified solar.

“There’s significant materials loss in that method,” Toor said. “Sometimes up to 50 percent of the silicon is wasted.”

Several companies are working on using molten silicon to pour wafers directly. Toor said 1366 Technologies is the industry leader in that innovation and that the company should be introducing lower-cost wafers to the market by 2013.

Another option is to present alternatives to making solar efficiency gains. Anti-reflective coatings like the Black Silicon Natcore Technologies is developing improve energy output without making fundamental changes to cell design or materials. Natcore’s technology will likely be commercialized this year, Toor said.

The third innovation will take longer to come to market, Toor said. Solar thin-film is primarily made with copper indium gallium diselenide (CIGS) right now. Gallium is already expensive and indium is being used in more and more technologies, which will drive its cost up.

Toor said that copper zinc tin sulfide (CZTS) cell technology will cannibalize existing thin-film technology. “That technology needs some work,” Toor said. “But it certainly can get there and it’s going to much cheaper than CIGS.”

The solar industry is evolving and has momentum for changes that will make it more affordable and more efficient.

“Companies want to reduce the costs and still make a good profit,” Toor said. “That means they’ll want to look at cheaper materials.”

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