Solar Manufacturing Cost Analysis
NREL analyzes manufacturing costs associated with photovoltaic (PV) technologies, including crystalline silicon, cadmium telluride, copper indium gallium diselenide, perovskite, and III-V solar cells.
These analyses are often based on bottom-up cost models for multiple components along the supply chain, offering a detailed look at cost drivers. The key outputs of these analyses are:
- Minimum sustainable prices (MSP)
- Step-by-step and total manufacturing costs for a given process, to identify cost drivers
- Roadmaps identifying potential pathways for cost reduction.
Minimum Sustainable Price
NREL regularly employs MSP calculations in manufacturing cost analyses. MSP represents the minimum price that would need to be charged for a PV technology at any given time to cover all production and overhead costs and pay investors back at their demanded rate of return.
MSP is neither a market price nor intended to indicate the minimum price achievable for a given technology. Rather, MSP calculations enable "apples-to-apples" comparisons between different technologies and can reveal how market prices compare to the cost to produce a technology.
Bottom-Up Manufacturing Cost Modeling
Many NREL manufacturing cost analyses use a bottom-up modeling approach. The costs of materials, equipment, facilities, energy, and labor associated with each step in the production process are individually modeled. Input data for this analysis method are collected through primary interviews with PV manufacturers and material and equipment suppliers.
This approach enables NREL to estimate step-by-step costs and identify cost drivers for a given material and production process.
Historical and Future Cost Modeling
Since 2010, NREL has been conducting bottom-up manufacturing cost analysis for certain technologies—with new technologies added periodically—to provide insights into the factors that drive PV cost reductions over time.
NREL also creates roadmaps that illustrate how innovations, increased production volume, and other factors could drive future cost reductions.
A Techno-Economic Analysis and Cost Reduction Roadmap for III-V Solar Cells, NREL Technical Report (2018)
Watch these videos to learn about NREL's techno-economic analysis (TEA) approach and cost modeling for PV technologies. They're part of NREL's Solar TEA Tutorials video series.