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Issue 10, 2013
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Assessing the drivers of regional trends in solar photovoltaic manufacturing

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The photovoltaic (PV) industry has grown rapidly as a source of energy and economic activity. Since 2008, the average manufacturer-sale price of PV modules has declined by over a factor of two, coinciding with a significant increase in the scale of manufacturing in China. Using a bottom-up model for wafer-based silicon PV, we examine both historical and future factory-location decisions from the perspective of a multinational corporation. Our model calculates the cost of PV manufacturing with process step resolution, while considering the impact of corporate financing and operations with a calculation of the minimum selling price that provides an adequate rate of return. We quantify the conditions of China's historical PV price advantage, examine if these conditions can be reproduced elsewhere, and evaluate the role of innovative technology in altering regional competitive advantage. We find that the historical price advantage of a China-based factory relative to a U.S.-based factory is not driven by country-specific advantages, but instead by scale and supply-chain development. Looking forward, we calculate that technology innovations may result in effectively equivalent minimum sustainable manufacturing prices for the two locations. In this long-run scenario, the relative share of module shipping costs, as well as other factors, may promote regionalization of module-manufacturing operations to cost-effectively address local market demand. Our findings highlight the role of innovation, importance of manufacturing scale, and opportunity for global collaboration to increase the installed capacity of PV worldwide.

Graphical abstract: Assessing the drivers of regional trends in solar photovoltaic manufacturing

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Article information

01 Mar 2013
23 Jul 2013
First published
05 Sep 2013

This article is Open Access

Energy Environ. Sci., 2013,6, 2811-2821
Article type

Assessing the drivers of regional trends in solar photovoltaic manufacturing

A. C. Goodrich, D. M. Powell, T. L. James, M. Woodhouse and T. Buonassisi, Energy Environ. Sci., 2013, 6, 2811
DOI: 10.1039/C3EE40701B

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