Ted Sullivan, Senior Analyst, Lux Research
January 03, 2011 | 2 Comments
Boston -- In the face of renewed pricing pressures, solar device manufacturers have had to refocus on minimizing costs and maximizing performance to maintain profit margins
Advances in crystalline silicon technology, and the falling cost of the polysilicon raw material, have only increased the pressure on manufacturers of emerging thin-film technologies, including thin-film silicon (TF-Si), cadmium telluride (CdTe), and copper indium gallium diselenide (CIGS) – many of which are under the gun to improve margins or face extinction.
To forecast how module developers would reduce the key components of cost – capital, materials, utilities, and labor – a recent Lux Research report constructed cost-of-goods-sold (COGS) models through 2015 for the dominant technology – multicrystalline silicon (mc-Si) – as well as its thin-film competitors: TF-Si, CdTe, and CIGS (both glass and flexible substrates).
This week’s graphic sums up the report’s findings. Namely, it shows that as COGS decline across the board, mc-Si remains highly profitable throughout the value chain. Vertically integrated players will drive costs from $1.45/W in 2009 to $0.93/W in 2015, assuming poly pricing at $70/kg. Efficiency will be a key driver of cost reduction, rising from 14.0% in 2009 to 16.1% in 2015.
Oerlikon will give thin-film silicon new legs. Improvements enabled by Oerlikon’s new ThinFab line will push thin-film silicon efficiencies from 9.0% to above 11.0%. Significant improvements in output will cut depreciated capex per watt, and help to reduce TF-Si costs from $1.32/W in 2009 to $0.80/W in 2015.
CdTe technology remains the long term leader in terms of COGS. Led by First Solar, CdTe has a significantly lower cost structure than mc-Si, and its cost reductions will march onward, keeping it the most profitable solar technology, as COGS falls from $0.80/W in 2009 to $0.54/W in 2015.
Costs for select CIGS technologies drop dramatically. CIGS sputtered on glass – which is Lux Research’s benchmark given its critical mass of developers – will see COGS plummet from $1.69/W to $0.76/W as efficiency improves from 10.0% to 14.2%, and factory nameplate capacity and yields grow, allowing the top developers to earn gross margins over 30%.
This data came from the Lux Research report "Module Cost Structure Breakdown: Can Thin Film Survive the Crystalline Silicon Onslaught?"