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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.

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.

Featured Study

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.