Within five years, the average cost of solar PV will fall to around 6c/kWh – putting it on par with coal and gas fired generators in many countries, and making it cheaper to build a solar plant than a fossil fuel generator just about everywhere.
The cost prediction is made by Chinese manufacturing giant Trina Solar – now the second largest solar PV manufacturer in the world – and it is significant because one of the misunderstood aspects of the recent years was that the falls in the cost to consumer was all about overcapacity and pricing cuts, and not about manufacturing efficiencies.
Trina chief scientist and vice president Peirre Verlinden, however, says that the average cost per module achieved what was predicted: a 20 percent fall in manufacturing costs for every doubling in accumulative production.
That will still hold true, but because the production numbers are higher (200GW so far), the next 20 per cent fall will take longer than the last 20 per cent fall. That means, in percentage terms, it will not be as great, but it will still be significant.
Consumers, however, may not see a huge difference in price because the rationalization in the industry means that solar manufacturers now have the opportunity for much-needed increase in margins, to ensure their profitability and long term stability.
Verlinden says this is having another impact – customers are now looking for quality modules rather than just the cheapest.
Verlinden says this is a good thing, because one of the parameters for a low levellised cost of energy (LCOE) comes in efficiency and longevity. A module that fails under 15 years will not deliver the same returns as one that lasts more than 25 years.
He says most components of modules, such as silicon and wafers, and cell production, have fallen and may continue to fall. Other components are more difficult – with labour costs rising, alumimium (for frames) also costly, and silver (the solar industry uses 10 per cent of total supply) also rising. This is pushing manufacturers to find alternatives.
One the energy pay-back time, Verlinden said it is currently around 1.5 years in the best solar regions, and about 3-4 years in the worst solar regions. The aim was to bring this below one year.
He also noted that the carbon footprint of the best solar modules was better than any other technology, with the exception of hydro. For Trina modules, it was 19g of CO2-e for every kWh. Coal is more than 1,000g.
Top image via Trina Solar
© 2014 Solar Choice Pty Ltd
