The world production of photovoltaic (PV) cells/modules has increased at a rate of >35%/year from 88.6 MW in 1996 to 744.8 MW in 2003 with concomitant reduction in cost. During this period U.S. fraction of PV production has dropped from 44% to 14%. Last year, U.S. production of thin-film PV modules was as follows: CdTe First Solar 2.5 MW, CuIn@sub 1-x@Ga@sub x@Se@sub 2-y@S@sub y@ (CIGS) Shell Solar 2 MW, a-Si:H UniSolar 7 MW and CIGS Global Solar 0.5 MW. Because of considerable increase in the production capacity, it is expected that the cumulative U.S. production of thin-film PV modules will double to 25 MW this year and again to 50 MW next year, thus spearheading production growth. Present PV conversion efficiencies of champion thin-film solar cells are CIGS 19.3%, CdTe 16.5% and a-Si:H 12.4%. However, those of PV modules lag considerably behind. In addition to increasing efficiency and production volume of thin-film PV modules and reducing their cost, it is also important to assure their long-term reliability. Other principle research issues in thin-film photovoltaics are discussed below. Even though the bandgaps of CdTe and CuIn@sub 1-x@Ga@sub x@S@sub 2@ (CIGS2) are near optimum for terrestrial and space applications, their open circuit voltages are considerably below theoretical attainable values. Therefore, interdiffusion, phase formation, and accumulation of impurities in the active junction region must be studied. Moreover, as CIGS film transitions from Cu-rich to In-rich composition, its microstructure must be studied. Obtaining ohmic contacts is difficult especially for CdTe because of the inherently low p-type doping level. Therefore, increasing p-type doping level is important. FSEC PV Materials Lab is participating in this effort with research and development on large area CIGS thin-film solar cells as well as by leading in testing of U.S. thin-film PV modules in the hot and humid environment as well as under high-voltage bias conditions.