A variety of issues face the photovoltaic (PV) industry in order to meet a market penetration goal of more than a gigawatt per year in worldwide sales before the year 2020. Although the PV market is dominated by silicon‐based technology, it is not reasonable to project installed system prices of below $1·50/W in the next 5 or even 20 years without including the impact of polycrystalline thin films. Polycrystalline thin‐film technologies, including cadmium telluride (CdTe)‐based technologies, are a viable option for enabling lower costs, more rapid market expansion, and gigawatt/yr annual sales. A number of issues must be resolved in order to demonstrate a competitive price of energy to the customer in the range of the $0·11–0·16/kWh. Copyright © 2000 John Wiley & Sons, Ltd.