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Clean Power 131118_crystalline_silicon_wafer_manufacturing_cost_forecast

Published on November 22nd, 2013 | by Joshua S Hill

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Solar PV Production Costs To Drop In 2014



The average cost for tier 1 solar photovoltaic manufacturers is expected to fall 6% during 2014, continuing the downward trend set in place since 2008, bringing the overall cost to a record low of $0.20 per watt, according to the latest research from NPD Solarbuzz published in their Polysilicon and Wafer Supply Chain Quarterly report.

131118_crystalline_silicon_wafer_manufacturing_cost_forecast

“Wafer costs are only a third of what they were five years ago, and even though the rapid pace of cost reduction is starting to decline, the severe oversupply and extremely low selling prices are forcing polysilicon and wafer makers to continue to find ways to lower costs to previously assumed impossible levels,” said Charles Annis, vice president at NPD Solarbuzz.

There are two sides to the manufacturing of solar photovoltaic panels are polysilicon and wafers. According to NPD, polysilicon manufacturers are relocating capacity to areas with low electricity prices, building new fluidized bed reactor (FBR) plants or converting Siemens capacity to FBR, reducing power consumption, increasing plant productivity, as well as building in-house power plants.

“At the same time, wafer makers are also reducing costs by increasing the multicrystalline ingot size from Gen 4/5 to Gen 6/7, reducing slurry consumption and increasing recycling, adopting diamond wire sawing for monocrystalline applications, and benefiting from rising conversion efficiencies as crystallization quality continues to improve,” explained Annis.

While manufacturing prices are expected to drop, NPD believe that “along with firm pricing and rapidly growing shipments” the increased productivity that is allowing such prices “is expected to create a substantially more optimistic opportunity for best-of-class polysilicon and wafer makers in 2014.” Subsequently, these prices make NPD Solarbuzz’s recent PV market demand forecast of between 45 GW and 50 GW for 2014 should support improving the profitability for leading polysilicon and wafer manufacturers.

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About the Author

I'm a Christian, a nerd, a geek, a liberal left-winger, and believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I work as Associate Editor for the Important Media Network and write for CleanTechnica and Planetsave. I also write for Fantasy Book Review (.co.uk), Amazing Stories, the Stabley Times and Medium.   I love words with a passion, both creating them and reading them.



  • Stu14nmUD64bit7″

    I’m not sure most people get the significance of falling prices, we are about to hit economies of scale and mass production in photovoltaic solar power, around 1820 we saw the coal fired steam engine become important. The 1920s saw the number of cars increase by 10X in a single decade, that’s right, 1,000%, an order of magnitude, because of the mass production of internal combustion engines. In the 2020s we will see the mass production of PV solar power, economies of scale will kick in, the theory of sprint evolution, or punctuated evolution, shows long Stagnation then rapid replacement. If we look at smartphones, photo electric, quantum physics based silicon, starting from a few iPhones, to 2 billion smartphones in 7 years, trillions of dollars worth as an industry. Similarly instead of converting energy to light, converting light to energy will be worth trillions, once PV becomes cheaper than coal, solar power will be used to make silicon, from sand, this is known as bootstrapping.

    • Bob_Wallace

      Ah, an opening to post one of my favorite graphs. How quickly new technology gets adapted once it gets good enough and cheap enough.

      A year or so back we reached the point at which we had enough solar panels on our grids to annually produce all the electricity that gets used for manufacturing solar panels. We’ve bootstrapped.

      (Somewhere on this site there’s an article about it. My searching didn’t find it.)

      • Stu14nmUD64bit7″

        Quite right, the law of diminishing returns states that when every grain of sand, sandstone on Earth is converted to silicon, when every desert, roof, road, sidewalk is covered in 90% efficient solar power. When every sun, in every universe, is surrounded by solar panels, when we exploit vacuum energy, then we’ll have to work out some new technology. So it’ll be some time before the law of diminishing returns kicks in, great graph, seems like autos explosion started in 1915, and peaked around 1925. I’ll bet steam engine power was moving in 1815, doing fairly well by 1825, solar power may start in 2015, peak in 2025. Yup bootstrapping, if we are now producing more power from solar, than the energy needed to manufacture solar power, we’re about to move into pure energy profit territory. Hopefully the great Stagnation, is over in the developed world, and cheap energy, will give us a 20s style boom, we’ve seen billions move from near starvation, to global middle income, just since the end of the cold war. Their figures for every item in that graph would have soared, China spends near twice as much as the US on solar power, more than Europe I think. On lower income, it’s the brown coal pollution, being the worlds factory is no fun, if your burning what is basically dried sewage and breathing it in all year. Here in Newcastle NSW Australia, the thin film solar power man, went back to China, hired his own professor from Newcastle University, he’s now a multi billionaire.

  • mds

    The links given just below speak of 30c/W wafer costs in 2012 and 2013. The first two claim 1366 Technologies can get down to 10c/W wafer costs and they are scaling their manufacturing now. The third claims Scifiniti can cut wafer cost in half, i.e. 15c/W, and this does not include further reductions in the cost of purified silicon. The original Solarbuzz article, source of the bar graph shown in this article, claims purified silicon costs can drop to “less than $14 per kilogram (kg) in the near future” and drop “to less than $10 per kg within a few years”

    I think this bar graph is off. It does not show silicon wafer costs of 30c/W for 2012 and 2013. It also shows a leveling of costs in 2014 which these other links suggest may not be the case. …unless they are showing PRICE stabilization, due to increased demand, and in-spite of a continued decline in COST.

    http://www.renewableenergyworld.com/rea/news/article/2013/02/1366-technologies-opens-new-factory-paves-road-to-cheaper-solar-pv – February 2012
    “1366 Technologies Opens New Factory, Paves Road to Cheaper Solar PV”
    “new manufacturing site in Bedford, Mass., a 42,000 square foot facility with 25-megawatt capacity.” “1366 says it has created solar cells with 17 percent efficiency in customer trials, which it deems ‘industry average.’ During the facility tour Sachs pointed to current examination of one cell at 17.5% efficiency.” “Van Mierlo lays out 1366′s true argument here: Today a fully loaded cost of legacy wafers is $0.29/W, vs. a sales price of only about $0.20/W, i.e. it’s a money-losing proposition. Once 1366 ramps in its big 1-GW factory, it will deliver a wafer cost of $0.10/W, a third of today’s fully loaded cost, he said.”

    http://www.renewableenergyworld.com/rea/news/article/2013/10/1366-secures-more-funding-launches-search-for-250-mw-factory – October 2013
    “1366 One Step Closer to Opening US Solar PV Wafer Facility “ “Solar silicon wafer innovator 1366 Technologies has landed new funding led by newest partner Tokayama, and is ready to scale up to a 250-MW production line ahead of an anticipated upswing in demand.” “Once the process is scaled up onto full production lines, fully-loaded wafer costs will be just $0.10/Watt, vs. legacy wafers at $0.29/W, according to Mierlo.“

    http://www.greentechmedia.com/articles/read/Scifiniti-Unstealths-With-New-Thin-Silicon-Technology-and-10-Million-in-VC – June 2013
    “Scifiniti Unstealths With New Thin Silicon Technology and $10 Million in VC”
    “Solar startup Scifiniti, in an exclusive interview, just revealed its technology as well as a $10 million round B for its kerfless solar silicon and materials technology.” “According to Scifiniti’s CEO, Sharone Zehavi, the Scifiniti wafer will be a drop-in replacement at less than half of the current $0.30-per-watt wafer cost.”

  • mds

    http://www.solarbuzz.com/news/recent-findings/integrated-solar-pv-polysilicon-and-wafer-suppliers-drive-production-costs “Integrated Solar PV Polysilicon and Wafer Suppliers to Drive Production Costs Below $0.20 per Watt in 2014, According to NPD Solarbuzz” – November 2013
    “Recently, multiple leading polysilicon producers have
    suggested they can cut Siemens costs to less than $14 per kilogram (kg) in the near future, and FBR costs to less than $10 per kg within a few years.”

    $14/kg is an astoundingly low cost for purified silicon AND they are projecting costs below $10/kg!!!

    Here is some historical data points for you:

    http://www.pv-tech.org/news/_a/gcl-poly_reduces_polysilicon_costs_to_us39.4_per_kg_in_2009_plans_2gw_wafer/ – March 2010
    ”GCL-Poly reduces polysilicon costs to US$39.4 per kg in 2009: plans 2GW wafer capacity in 2010”
    “GCL-Poly was able to produce 7,454MT of polysilicon in 2009 and sold 5,675MT as well as 46.4MW of wafers via tolling arrangements. Average selling price for polysilicon was US$65.4 per kg and US$0.83/W for wafers.” “As the company ramped polysilicon production and benefited from improved economies of scale, production costs declined significantly from US$66.0 per kg in 2008 to US$39.4 per kg in 2009.”

    http://www.pv-tech.org/news/_a/renesola_ups_sales_shipments_capacity_and_cell_conversion_efficiencies/ – May 2010
    “ReneSola ups sales, shipments, capacity and cell conversion efficiencies” “This would lead to a poly production cost target of between US$40/kg and US$45/kg.”

    http://www.pv-tech.org/news/_a/renesola_posts_record_results_wafer_manufacturing_costs_fall_to_us0.56_cent/ – August 2010
    “ReneSola posts record results: wafer manufacturing costs fall to US$0.56 cents per watt”

    http://www.pv-tech.org/news/_a/rec_reveals_fully_integrated_manufacturing_cost_per_watt_roadmap/ – November 2010
    “REC reveals fully integrated manufacturing cost per watt roadmap”
    “The company’s polysilicon achieved a fully inclusive cost of US$42/kg in the third quarter and has a target of US$31/kg by the fourth-quarter 2011, as production reaches 16,000MT per annum, according to REC.”
    “Enger noted in the seminar that REC had demonstrated a cash manufacturing cost for the FBR-processed polysilicon of US$18/kg.”

    So if purified silicon reaches less than $10/kg next year, 2014, then that’s a 75% drop, 1/4 the cost, in 5 years time. What an amazing race!!!
    Even earlier during the purified silicon production shortage:
    http://thefraserdomain.typepad.com/energy/2007/04/lower_priced_si.html (SRI International – new Si – April 2007)
    “SRI International has licensed technology to produce lower cost solar-grade silicon to three Asian companies and that pilot plants could be up and running in 18 months.” “promises to make solar-grade silicon for $14 per kilogram”
    “contract prices rising up to $85 per kilogram and non-contract prices skyrocketing to $200 per kilogram”

  • mds

    Mr. Hill,
    Your title is misleading could you please change to:
    “Solar PV Production Costs To Drop In 2014″

    Also, this is not correct:
    “There are two sides to the manufacturing of solar photovoltaic panels are polysilicon and wafers.”
    The manufacturing sequence is:
    purified Si -> Si wafers -> Si PV cells -> Si PV panels
    That would be four “sides to the manufacturing of solar photovoltaic panels”. You’re only talking about the purified silicon and wafer manufacturing stages that are inputs to the rest of the PV manufacturing process here. We’re not getting down to 20c/W PV panels as the title and that sentence imply.
    As Hans says, some context to what this means relative to total PV panel costs would be nice.
    Thanks, mike

  • Hans

    Wafers are becoming cheaper, nice. But what does this mean for the cost of PV systems? A rough guess could come from knowing which percentage of the system cost are determined by the wafers.

    Can you please do some journalism, instead of just rephrasing press releases?

    • Bob_Wallace

      Last week average cell price was 38c/w. Average panel price was 70c/w.

      http://pvinsights.com/

      • mds

        We’re actually talking about wafer prices here, not cell prices. I’m not sure how to translate their wafer cost numbers. Cost per unit is not even given.
        purified silicon ingot – $/kg
        silicon wafer – $/?
        silicon PV cell – $/? given, but prob $/W
        silicon PV panel – $/W

  • Marion Meads

    Prices of Solar PV will go up next year by 9%, while Cost of Production goes down, equals more profit! I hope that the Solar PV industry becomes more profitable without raising the prices further.

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