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Solar Photovoltaic Manufacturing Cost Analysis

NREL's photovoltaic (PV) manufacturing cost analysis—part of our broader effort supporting manufacturing analysis—examines regional solar PV manufacturing trends. Specifically: What has led to dramatic growth in China's PV manufacturing sector, and is that growth sustainable?

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.
  • The United States is a leader in early stage technology investments that have disruptive potential.
  • U.S. access to capital is a critical component to the capacity to innovate.

Highlights of Our Work: Comparison of China and U.S. Solar Photovoltaic Industries and Manufacturing Costs

In a study by NREL and the Massachusetts Institute of Technology (MIT) published in the journal Energy & Environmental Science, researchers concluded that production scale, not lower labor costs, drives China's current advantage in manufacturing solar photovoltaic (PV) energy systems. The study shows:

  • China's historical advantage in low-cost manufacturing is mainly due to advantages of production scale and offset by other country-specific factors, such as investment risk and inflation.
  • Technology innovation and global supply chain development could enable increased manufacturing scale around the world, resulting in broader, subsidy-free PV deployment and the potential for manufacturing price parity in most regions.

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