Originally published on The Handleman Post.
By Clayton Handleman
Not so long ago, Sunpower’s 20+% efficiency modules were seen as high end niche products. Last week SolarCity announced that it had leapfrogged that benchmark with its 22% modules currently rolling off of its 100 MW lines and soon to be rolling off its 1 GW line at Elon Musk’s ‘other’ gigafactory. With multiple vendors at GW scale with above 20% efficient modules, PV has reached the point of commoditizing high efficiency modules, and the ripple effect on system level costs has profound implications.
Adding fuel to the fire, in a recent Cleantechnica post, Panasonic shot back with its announcement of production prototypes testing at 22.5% efficiency. And the longtime leader, Sunpower, is in the process of upping its game with 23% efficient modules planned for production in 2017 in its Fab 5, which at a planned 800MW (.8GW) is also at the GW scale and rivaling SolarCity’s fab in capacity.
The importance of these announcements cannot be underestimated. SolarCity has long stated that its plan is for its residential PV systems to be cost competitive without subsidies by the time US tax credits expire. Low cost, high efficiency modules offer the path by reducing the physical size of solar arrays and the size-related costs. The benefits of high efficiency include reduced footprint and reduced balance of system costs on a dollars per kW/hr basis and amortization of fixed costs over a larger system capacity.
Many residential systems are limited by roof space, not desired capacity. And a substantial fraction of the cost of residential systems is fixed. As such, by increasing the array capacity those costs can be amortized over a larger project. This reduces the cost per watt and therefore the cost per kW/hr. As module prices have dropped, Balance of System costs for racking, wires, etc. are contributing a larger percentage of system costs. Because more efficient modules provide more energy per square foot, they reduce the cost of balance of system components on a dollars per watt basis. This is explained clearly in this article which includes an easily understood graphic showing how the economics play out. And things have only gotten better since it was written. High efficiency modules are coming in lower than $1.00/W, further amplifying the benefits.
The final piece of the puzzle is gigawatt-scale manufacturing to provide high volume and lower price. SolarCity is doing that with its PV gigafactory, and Panasonic has the scale to develop manufacturing on a globally significant level. When Sunpower was the only game in town and it was producing a tiny fraction of the world’s PV modules, it really didn’t matter how much their modules cost, as it had no real impact on the cost of solar globally.
With high efficiency modules soon to be rolling off gigawatt-scale assembly lines, SolarCity’s vision of PV reaching grid parity even as incentives are phased out appears to be coming to pass. And in volumes with global significance. Clearly the industry is rapidly transitioning to greater than 20% efficiency as the new normal, and with it, the brass ring of cost effective solar without subsidies is rapidly coming within reach.
Reprinted with permission.
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
CleanTechnica Holiday Wish Book
Our Latest EVObsession Video
CleanTechnica uses affiliate links. See our policy here.