in News Departments > New & Noteworthy
print the content item

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.





IronRidge_id1414

Latest Top Stories

Installer's Survey Shows Solar Energy Customers Predominantly Middle Class

Massachusetts installer New England Clean Energy surveyed nearly 250 of its customers and found that the majority of households installing solar are middle class.


U.S. Renewables Continue To Outpace Coal, Oil And Nuclear In New Capacity

New U.S. capacity from renewables so far this year is almost 35 times that of coal, oil and nuclear combined - 3,598 MW vs. 104 MW. Solar and wind are running virtually neck-and-neck, with 1,671 MW and 1,614 MW, respectively.


Energy Department Invests Millions More In Cost-Cutting Solar R&D

The U.S. Department of Energy (DOE) is awarding $53 million to dozens of research and development (R&D) projects that aim to drive down the cost of solar energy.


TVA Reconsiders Solar's Role And Value In New Resource Plan And Grid Study

Critics point to wide variations in caps and premiums paid for solar under the Tennessee Valley Authority's (TVA) current plan. The utility agency says it will incorporate more solar stakeholders in future programs.


After Massachusetts' 'Godfather Of Solar' Exits, Will The New Gov. Step Up?

Bay State solar developers and suppliers look back on the legacy of Gov. Deval Patrick while awaiting Massachusetts’ incoming chief executive.

GoIndustry (UK) Limited_id1446
Solectria_id1450