Just how much does it cost to manufacture a solar module, as of right now? That’s possibly a question that you’ve asked yourself before, and it’s an interesting one.
Of course, that cost varies based on where, and by whom, it was manufactured. Thankfully, the work of sorting and analyzing all of the necessary data has already been done for us, by GTM Research.
As per GTM Research’s recent analysis, manufacturing costs in the industry’s four main markets vary by as much as 18 cents per watt (multicrystalline silicon modules). Unsurprisingly, the lowest costs are in China — followed then by Malaysia, Taiwan, and the US.
The “direct manufacturing cost” in China — the cost not including things like “selling, general and administrative costs, interest, shipping, or warranty expenses” — is 50 cents per watt.
As per the report’s findings, the main source of China’s manufacturing cost advantage is down to the lower costs of necessary and key consumables in the manufacturing process — which is simply down to the fact that China possesses huge domestic “industrial ecosystems.”
Greentech Media provides more:
GTM Research lead upstream solar analyst Shyam Mehta notes that many domestic consumables vendors are pure-play solar firms that rely on their component customers for revenue, meaning that component producers can exert significant pricing leverage on their vendors. Many larger wafer, cell and module vendors also produce key consumables internally (eg, crucibles, wire, frames, junction boxes).
Malaysia is estimated to currently have the lowest direct labor costs on a per-watt basis due to a high degree of automation at Malaysian factories and low wage/salary rates, even compared to China. The availability of cheap and skilled labor (due to the country’s prior experience with semiconductor manufacturing) has made Malaysia a popular location for many PV manufacturers, including SunPower (cells), Flextronics (modules), Hanwha Q-Cells (cells), and Comtec Solar (ingots/wafers).
In comparison to China’s 50 cents per watt, US-based companies can manufacture a multicrystalline silicon module for 68 cents per watt. These numbers may change soon, though, owing to changes in the landscape here (e.g., the Silevo factory SolarCity is now working on and a SolarWorld factory).
“Both of these facilities focus on higher-efficiency technology that has historically been more costly to produce,” stated GTM Research solar analyst Jade Jones. “There’s the question not only of manufacturing location, but also of the producers’ ability to bring down the cost for various technology solutions.”
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Image Credit: Giga Solar
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