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Solar PV Manufacturing Cost Analysis

Between 2000 and 2010 global shipments of PV cells/modules grew 53% (compound annual growth rate [CAGR]). At the same time, the U.S. market share has slipped from 30% to 7% (30% CAGR) while China/Taiwan has grown from <2% to 54% (115% CAGR) to become the leader in global production. NREL's manufacturing cost analysis has focused on understanding the regional competitiveness of solar PV manufacturing specifically: What factors have led to China's dramatic growth in PV? Is it sustainable? Can the US compete?

NREL's manufacturing cost analysis studies show that:

  • U.S. incentives to strengthen access to capital for investment in innovative solar technologies could offset China's current advantage
    • U.S. incentives are dwarfed by the scale of Chinese incentives
    • U.S. is a leader in early stage technology investments that have disruptive potential
    • Access to capital is a critical compliment to US capacity to innovate

Highlights of Recent Studies

Comparison of China and US Solar PV Industries and Manufacturing Costs

This study explored the differences in the economics of PV module manufacturing in the US and China by estimating and comparing the minimum sustainable price based on differences in regional costs, manufacturing subsidies, country investment risk (cost of capital or hurdle rate), shipping costs to US market. Cost estimates were based on outputs from NREL's Manufacturing Cost Model, a financial simulation of PV module manufacturing process, including materials and equipment, operational costs, and cost of financing. Input data was obtained from literature/industry review of global PV market.

Key findings include:

  • Manufacturing subsidies are necessary for China to export ($1.47 -> $1.38 breakeven price for C-Si modules and $1.31 -> $1.18 breakeven price for CIGS modules)
  • Shipping costs offset China's core manufacturing cost advantage (c-Si and CIGS advantage reduced from 3% to -2% and 9% to 2%, respectively)

To find out more about this study, please download: Solar PV Manufacturing Cost Analysis: U.S. Competitiveness in a Global Industry

For questions about this project, contact Michael Woodhouse via our Webmaster page.