Issue 12, 2015

The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation

Abstract

Using a bottom-up cost model, we assess the impact of initial factory capital expenditure (capex) on photovoltaic (PV) module minimum sustainable price (MSP) and industry-wide trends. We find capex to have two important impacts on PV manufacturing. First, capex strongly influences the per-unit MSP of a c-Si module: we calculate that the capex-related elements sum to 22% of MSP for an integrated wafer, cell, and module manufacturer. This fraction provides a significant opportunity to reduce MSP toward the U.S. DOE SunShot module price target through capex innovation. Second, a combination of high capex and low margins leads to a poor financial rate of return, which limits the growth rate of PV module manufacturing capacity. We quantify the capex of Czochralski-based crystalline silicon (c-Si) PV manufacturing, summing to 0.68 $/WaCap ($ per annual production capacity in watts, $year/W) from wafer to module and 1.01 $/WaCap from polysilicon to module. At a sustainable operating margin determined by the MSP methodology for our bottom-up scenario, we calculate the sustainable growth rate of PV manufacturing capacity to be ∼19% annually – below the historical trend of ∼50% annually. We conclude with a discussion of innovation opportunities to reduce the capex of PV manufacturing through both incremental and disruptive process innovation with c-Si, platform innovations, and financial approaches.

Graphical abstract: The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation

Supplementary files

Article information

Article type
Analysis
Submitted
15 May 2015
Accepted
10 Aug 2015
First published
07 Sep 2015
This article is Open Access
Creative Commons BY license

Energy Environ. Sci., 2015,8, 3395-3408

The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation

D. M. Powell, R. Fu, K. Horowitz, P. A. Basore, M. Woodhouse and T. Buonassisi, Energy Environ. Sci., 2015, 8, 3395 DOI: 10.1039/C5EE01509J

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