Solar Photovoltaic Manufacturing Cost Analysis
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.
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.