National Renewable Energy Laboratory

Photovoltaic Research - PV Manufacturing R&D

Cost/Capacity Analysis

Photo of energy efficient home in Oxford that generates more electricity than it uses.

This energy efficient home in Oxford generates more electricity than it uses. At 4 kWh per annum. Surplus electricity is sold to the local utility company and to power an electric car.

The PV Manufacturing R&D Project Coordination Team measures and tracks the progress of the Project's impact on module cost and production capacity. The module-manufacturing partners voluntarily provide the team with two types of critical information: direct costs of module manufacturing and manufacturing capacity. The direct costs are those costs directly associated with module production and do not include such costs as research, sales/marketing, or general administrative expenses.

Direct costs of module manufacturing dropped from $5.89 per peak watt in 1992 to $2.73 per peak watt in 2005 dollars. These results represent a total cost reduction of about 54%, or an average annual drop in direct cost of about 5.5 percent. In addition to supplying the most recent year's data, these partners supply their projections for the coming 5 years.

The cost/capacity graph below shows the 2005 data of 14 Project participants with active module manufacturing lines in 2005. A participant in this case refers to a subcontractor with a manufacturing line. The graph shows continued progress toward meeting the Project goals of decreasing direct costs of manufacturing and increasing production capacity.

Graph showing the overall PV industry average module manufacturing costs versus the total pv manufacturing capacity from 1992 to 2009. It represents the potential production if all the plants were running at full capacity. Through 2004, the graph shows that total module production capacity grew from 13 MW at the start of PVMaT subcontracts in 1992 to 240 MW at the close of 2004. These results represent a 18-fold increase or about 28% average annual growth in production capacity among these Project participants.

PV Industry Cost/Capacity (DOE/US Industry Partnership)

The production capacity shown is the total capacity of the 14 participants. It represents the potential production if all the plants were running at full capacity. Through 2005, the graph shows that total module production capacity grew from 14 MW at the start of PVMaT subcontracts in 1992 to 251 MW at the close of 2005. These results represent a 19-fold increase or about 26% average annual growth in production capacity among these Project participants.

From the perspective of technology learning curves, these data reflect an average 17% drop in direct costs of manufacturing for every doubling of production capacity.