in News Departments > New & Noteworthy
print the content item

comments: 0

The solar manufacturing industry is reeling from overcapacity, and supply outstrips demand by two to one. The industry needs to drive costs lower in order to overcome diminished subsidies and regain profitability - and the cost reductions it needs are at hand, according to a new report from Lux Research.

Module prices have fallen precipitously over the past four years to a low of $0.70/W, but the cost of goods sold (COGS) for modules has not reached this level - resulting in massive losses for most module manufacturers.

"With pressure from competitors, customers and policymakers to drop prices even further, manufacturers need to drive costs down to survive and thrive during the coming years of growth in the demand market," says Ed Cahill, an associate at Lux Research and the lead author of the report, titled "Module Cost Structure Update: Path to Profitability."

The company conducted a cost and sensitivity analysis, examining the impacts of drivers like low-cost manufacturing locations, high efficiency, increased capacity utilization and higher production yields on module COGS.

Copper indium gallium (di)selenide (CIGS) technology has the greatest potential to cut cost, Lux Research says. COGS will fall across the board between 2012 and 2017, but the rate of decline will be the steepest for CIGS, which can shave $0.14/W off the cost to $0.64/W.

Cadmium telluride (CdTe) remains the low-cost leader. Despite the travails of its main champion, First Solar, CdTe thin-film modules will remain the cheapest solar option in 2017, at $0.48/W, down from the current $0.67/W.

Efficiencies are the key driver, Lux Research adds. Manufacturing location has the greatest potential influence on COGS, but overcapacity makes opening new facilities in low-cost countries unlikely. Consequently, increasing module efficiencies will make the most difference, up to $0.09/W for mc-Si and $0.21/W for CIGS.





SolarEnergyTradeShow_id1384

Surrette_id1409
Latest Top Stories

Hawaiian Electric's Solar Plans Put New Focus On DG Interconnection

Hawaiian Electric Co.'s proposed energy plan includes ambitious goals for solar integration that address grid integrity issues. Installers, however, find little to cheer in the short run.


N.Y. Property Tax Exemption For Renewables Bill Ready For Signature

In a move that is expected to boost renewable energy in the state, the New York legislature has sent Gov. Andrew Cuomo a bill that would extend property tax exemptions for certain solar, wind and biomass projects to Jan. 1, 2025.


Are Solar Shingles Coming To A Rooftop Near You?

Despite the initial hype, the new technology has been slow to make inroads against conventional rooftop solar.


Solar Cell Production Line Upgrades Driving Higher PV Performance

Manufacturers of multicrystalline solar cells are seeking to improve performance by implementing new technologies on existing lines.


Own Or Lease? Think Of Rooftop Solar As A Car That Makes Money

While upfront cost is often the first issue on the prospective solar customer's mind, it should not be the only one.

Lufft_id1410
S&C Electric_id1352
SilcoTek
WIP_id1320
PVcobra_id1394