While the solar cell market has shown healthy growth of >20% through the market recession of 2008/09, there is continuing concern over the market’s long term viability. The cost of solar cell energy is still considerably higher than other forms of energy, especially when taking into account the large amount of government funding going into solar. As a result, solar fabs must look for ways to minimize their costs. In particular, most fabs are focused on achieving a target of
Techcet Group has taken the initiative to understand the cost contributions per process step and identify those areas that have the most elasticity with regard to cost and cost reduction. The two main areas of concern are wafering and metallization. In addition to these, there is a general belief that manufacturing automation (advanced equipment) can reduce cost. Details on wafering cost and supply chain concerns are provided here, as taken from Techcet’s 2010 “Solar Cell Manufacturing Costs Report.”
Polysilicon – a major solar cell cost contributor
Polysilicon is the key raw material used to make silicon wafers. This material has been pegged as a major cost contributor to the overall PV cell manufacturing, representing 30% or more of the overall cell cost. The total wafer cost represents more than 60% of the overall cell costs. Much of the spread can be attributed to variation in processes and/or materials. Material cost will vary depending on contract pricing, and/or the type of silicon used as the starting material. Solar grade silicon (SoG) feedstock is usually considered to be 99.9999% pure (6Ns, in terms of being free from metallic impurities); however, higher purity silicon is sometimes used to enhance cell performance. A lower grade silicon could be employed to lower production costs, but there are definite tradeoffs in installed electrical output and resultant overall cost/W.
As noted in our report, feedstock costs can vary from $0.30/Wp to $0.40/Wp. The lower end of this range is more representative of the price obtained by high volume manufacturers to achieve reliable supplies with fixed cost contracts. New players or those that are not dealing in high volumes are subject to polysilicon “spot price” variations that can be considerably higher. Long-term contract pricing is believed to be around $70/kg.
The use of fixed-price contracts has its upsides and downsides. Average contract pricing is estimated to be below $70/kg from most large volume suppliers, which provides some protection against price increases. However, should the market price drop below this, cell costs would remain artificially higher for large volume fabs with long term polysilicon contracts, while smaller cell fabricators would gain an advantage from lower material costs. On the other hand, if the open market price rises, as a result of tight supply, this could pose some significant cost increases in solar cells over time.
As a result of high demand for wafers in 2006 and 2007, there has been a move to invest in building more polysilicon production plants and expansions. Current evaluation of the polysilicon availability shows it is in an oversupply situation for the next few years. However, Techcet’s research indicates that the polysilicon and wafer availability to solar and semiconductor manufacturers is tight. This is most likely the result of a steep increase in semiconductor device manufacturing as well as healthy demand from the solar cell industry.