Solar Production Module Costs To Decline To As Low As $0.48/W Within Five Years: Report

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As large global supply of solar modules far exceeds demand, prices continue to fall. That’s a good thing to boost the long-term profitability of the solar industry, according to a recent report. However, not always for solar module companies.

Analysis done by Lux Research noted that module costs have dropped to $0.70/W in the past four years, while cost of goods sold (COGS) have not fallen at the same rate, thus creating huge losses for module builders.

However, the report projected that Cadmium telluride (CdTe) modules would remain the least expensive option in the market for years to come, with prices reaching as low as $0.48/W by 2017.

Meanwhile, COGS all around is projected between 2012 through 2017, as copper indium gallium (di) selende thin-film modules decline to $0.64/W, a 14 cent price difference from today’s costs.

Lux Research also said there will be a bigger boost in efficiency in module production in the next few years:

“Efficiencies are the key driver. 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.”

Lux Research Associate and author of the report Module Cost Structure Update: Path to Profitability Ed Cahill also said it’s vital for manufacturers to cut their own costs in order to strengthen their profit margins and ability to survive.

““With pressure from competitors, customers, and policy-makers 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,” he said.

Source: Lux Research

Adam Johnston (184 Posts)

A University of Winnipeg graduate who received a three year B.A. with a combined major in Economics and Rhetoric, Writing & Communications. Currently attempting to be a freelance social media coordinator. My eventual goal is to be a clean tech policy analyst down the road while I sharpen my skills as a renewable energy writer. Currently working on a book on clean tech and how to relate it to a broader audience. You can follow me on Twitter @adamjohnstonwpg or at www.adammjohnston.wordpress.com


  • Bob_Wallace

    “However, the report projected that Cadmium telluride (CdTe) modules would remain the least expensive option in the market for years to come, with prices reaching as low as $0.48/W by 2017.

    Meanwhile, COGS all around is projected between 2012 through 2017, as copper indium gallium (di) selende thin-film modules decline to $0.64/W, a 14 cent price difference from today’s costs.”

    Silicon module prices last Wednesday were an average of $0.66/watt with a low of $0.54/watt.

    Thin film was $0.62/watt average and $0.52/watt low. Only four cents higher than as the minimum predicted.

    Looks like 2017 is going to arrive fairly soon….

    http://pvinsights.com/

    • ThomasGerke

      This year a solar factory-line manufacturer (German style ;) – don’t build the stuff, build the factory that makes stuff) has presented their new CIGSfab fully automated production line….
      The current 200MW version produces CIGS-Thin film panels for $0.55/Wp and the scaled up 1GW production line could achieve $0.48/Wp.

      If investment capital find its way, we could already be in 2017 next year ;)

      • Bob_Wallace

        Thanks, Thomas.

        News like this makes me feel like we have a decent chance of avoiding the worst of climate change.

        If Germany could only package its BOS prices and ship them out to the rest of the world…

        –

        The fully automated factory producing at $0.48/w is likely to cause problems for Chinese manufacturers. Their labor cost advantages are neutralized. Cheaper to ship factories close to market than to ship a continuing stream of product.