Solar PV manufacturing cost analysis and forecast

 

PVinsights expect that total manufacturing cost of poly-Si based solar PV panel will reduce to below US$0.9/watt by 2020. Based on the manufacturing cost including the cost of raw materials, our analysis indicates that total solar PV manufacturing cost will decrease to US$1.25/watt in 2010, and steadily reducing every year to below US$0.9/watt in 2020 (see diagram below). We suggest that efficiency enhancement, material innovation, and productivity improvement are the major drivers toward this cost downward trend.

The most important factor is efficiency enhancement. In the past few years, solar cell makers have been improving their cell conversion efficiency. In 2009, solar cell makers can produce the 156mm-square poly solar cell normally with 15.8%-16.4% conversion efficiency. PVinsights expect that this efficiency will increase to 17.4% by 2015 and reach above 18% by 2020. In the meantime, solar panel makers have also been improving their production efficiency. These efficiency enhancements will lower the overall solar PV cost.

Material or technology innovation will decrease solar PV panel cost as well. So far, all chemical vendors are still working on finding the alternative chemicals with better conversion efficiency and less material consumption. The development of silicon usage is improving as well, since solar wafer makers continue to reduce wafer thickness. Solar wafer thickness was around 300um in 2004, and will be less than 150um by 2012. Solar material players can also develop lower cost materials by material innovation. Such material innovation, in turn, can help solar players simplify solar system integration by lowering the installation cost.

Productivity improvement can also reduce solar PV panel cost. To reduce their manufacturing costs, solar cell makers in Europe, U.S., and Japan start to build factories in Asia or to outsource their manufacturing to other Asian solar cell firms. Korean and Taiwanese firms can run their solar cell factories well, since these two countries have expertise in semiconductor and LCD processes, and those processes are applicable to and more complicated than the solar cell manufacturing process . Chinese solar cell or panel makers, however, do not have comparable expertise as Korean and Taiwanese makers, so they cannot produce outputs with steady and reliable quality. Moreover, Asian solar cell makers also continue to increase their productivity to reach economies of scale. PVinsights believe that solar cell manufacturing cost will be around US$0.2/watt by 2020. In addition, solar panel makers also work hard on productivity, therefore; PVinsights expect that solar panel manufacturing cost will be close to US$ 0.32/Watt by 2020.