September 06, 2009
Solar Photovoltaic Price Drops Continue

An article in Digitimes claims the price of polysilicon-based solar photovoltaic (PV) solar cells has dropped by more than half since 3Q 2008 and may drop to a quarter of the current price by 2011.

The price per watt has now dropped to US$1.80 for polysilicon-based products, which is lower than the US$1.85 level The Information Network previously thought the industry would see at the end of 2009. By way of comparison, the average selling price in the third quarter of 2008 was US$4.05 per watt.

Whether we will see a continued rapid decline in prices remains to be seen. Currently I doubt any manufacturer aside from First Solar can make a profit below $1 per watt. Anyone have insights into the costs of China's biggest PV makers?

Also, anyone have insights into how much prices for residential PV installations are declining?

The decline in demand as a result of the recession combined with a big ramp up of manufacturing capability (it caused by the high energy prices that helped trigger the recession) created the glut. But China now is aiming to become the dominant maker of PV. Suntech Power of China is selling product in the US at a loss in order to gain market share.

Chinese companies have already played a leading role in pushing down the price of solar panels by almost half over the last year. Shi Zhengrong, the chief executive and founder of China’s biggest solar panel manufacturer, Suntech Power Holdings, said in an interview here that Suntech, to build market share, is selling solar panels on the American market for less than the cost of the materials, assembly and shipping.

...

But even in the solar industry, many worry that Western companies may have fragile prospects when competing with Chinese companies that have cheap loans, electricity and labor, paying recent college graduates in engineering $7,000 a year.

But if Suntech Power is already selling at a loss at today's prices I fail to see how it can afford to sell at a half or a quarter of today's prices. I doubt manufacturing costs will drop that quickly.

Manufacturing capacity looks set to continue a very rapid growth.

DisplaySearch, a unit of research firm NPD Group that focuses on the display and solar markets, reports today that global solar cell manufacturing capacity is expected to grow 56% in 2009 to 17 gigawatts, with further growth at a 49% compounded rate to more than 42 GW in 2013.

Might China's planned very rapid growth in use of solar power prevent the steepest PV price declines?

The country may raise its solar-power capacity to 2,000 megawatts by 2011 and 20,000 megawatts by 2020, from 150 megawatts at the end of last year, Cui Rongqiang, head of the Shanghai Solar Energy Society, said by telephone today.

I do not come across articles on China's use of concentrating solar power (CSP). Yet at least in the United States CSP looks cheaper than PV. CSP also makes it much easier to shift production from afternoon into evening via heat storage in molten salts.

But as a percentage of total energy used the contributions from renewable energy will remain small.

Renewable energy will account for 4 percent of the city’s total consumption by next year and 6 percent by 2020, the Beijing Municipal Development and Reform Commission said in a statement handed out to reporters at a briefing today.

By 2020 renewables might account for 15% of China's energy consumption.

The central government aims to meet 15% of its energy needs through renewable sources by 2020. Beijing hopes to triple its solar heater capacity by the same year, according to Greenpeace China.

Can Suntech or another Chinese PV maker catch up with First Solar on costs? Can PV catch up with CSP on costs? Anyone got insights on these questions?

Share |      Randall Parker, 2009 September 06 01:29 PM  Energy Solar


Comments
Engineer-Poet said at September 6, 2009 4:59 PM:

CSP may not be cheaper than PV once T&D is included.  The February 2005 Skeptical Inquirer article Critical Thinking About Energy: The Case for Decentralized Generation of Electricity claims that the distribution costs are more than 150% of the generation costs.  On-site PV (and any other kind of DG) gets rid of all of that.

Randall Parker said at September 6, 2009 5:09 PM:

odograph,

Your "a" tag is missing an href attribute.

E-P,

But does DG of solar really reduce distribution costs? Do you need just as much distribution infrastructure with it getting used less of the time?

anonyq said at September 6, 2009 7:45 PM:

Not in rural China

Engineer-Poet said at September 6, 2009 9:21 PM:

If your peak load coincides with peak sun (probably the case in most of the Sunbelt), yes, you'd need less distribution stuff with more PV.  Not proportionally, but it would wind up being loaded less and last longer.

David Govett said at September 7, 2009 12:19 AM:

Why the heck is it that all efforts aimed at energy self-sufficiency are being made overseas? Has America lost its inventiveness? Are we no longer self-reliant? Are we determined to remain dependent on foreign energy, whatever the cost. What do you suppose America will look like when impoverished citizens clear cut the trees in national parks for energy?

Engineer-Poet said at September 7, 2009 6:22 AM:

Judging from the reactions I see on conservative blogs, cheap energy in general and oil in particular is an American right and all talk about "conservation" and the like is a bunch of tree huggin' hippie crap.

Yes, a good part of the American public might as well be Eric Cartman.

not anon or anonymous said at September 7, 2009 1:28 PM:

Engineer-Poet,

If we were to drill off of Florida and Alaska, instead of letting China do it, it would be cheaper. If alternative energy sources' prices reflected their technological and economic worth, then the market could function more efficiently. If nuclear power were deemed to be safe enough from the experts in the Capitol, electricity would be cheaper and cleaner.

It seems government's screwing with property rights in the name of "conservation" is exactly the problem. And by the way, Cartman's right about hippies.

David Govett,

What do you suppose America will look like when impoverished citizens clear cut the trees in national parks for energy?

AD 1491.

Michael Grant said at September 10, 2009 1:17 PM:

Nanosolar is claiming $1/watt: http://www.wired.com/wiredscience/2009/09/nanosolar/

Engineer-Poet said at September 10, 2009 1:25 PM:

Drill off Florida and Alaska?  You beg a number of questions.

  1. How much oil is there off Florida and Alaska?
  2. What does it cost to produce?
  3. If the cost of production is more than the cost of efficiency and conversion, why even consider it?
  4. If the volume produced cannot replace imports under BAU, what extra efficiencies and conversions are needed anyway to satisfy
    • National security considerations
    • Need for economic insulation from oil-market problems

SSG Jeff (USAR) said at September 10, 2009 2:22 PM:

This is interesting, as Sanyo is building a solar plant on the outskirts of Salem, OR - it's looking pretty near to externally complete.

Name said at September 10, 2009 2:37 PM:

Engineer-Poet, nice straw man. If it's not economical, nobody will do it, in which case, the bans are redundant. The only time the bans come into play is when it IS economical. It's not for you or me to speculate about whether or not it's economical. It's for the people ponying up the money to decide.

Or are you one of these conspiracy nutcakes who thinks that oil companies make money by polluting?

luagha said at September 10, 2009 3:01 PM:

1. How much oil is there off Florida and Alaska?
A lot. That's why China wants to drill for it.
2. What does it cost to produce?
Not very much. That's why China wants to drill for it. It's even cheaper for them because their oil-drilling companies don't have to follow the safety and environmental regulations ours have to deal with. But that's a cross we are happy to bear.
3. If the cost of production is more than the cost of efficiency and conversion, why even consider it?
It's not. It's light, sweet oil, the easiest to refine, and the drilling does not require any advances in technology. It's easy to do.
4. If the volume produced cannot replace imports under BAU, what extra efficiencies and conversions are needed anyway to satisfy
* National security considerations
* Need for economic insulation from oil-market problems
It will replace imports, it will make us more self-sufficient, and it will give us more control over the worldwide supply of oil allowing us more power in moderating the oil market. It's win-win-win.

These questions have already been answered, but I'm happy to answer them again for you. (If you want my real opinion, oil for energy is a mug's game - we should be saving our oil for high-energy carbon feedstocks of the kind we need to make advanced carbon materials. We should be generating our electricity primarily with sixth-generation meltdown-proof nuclear facilities, with reprocessing guarded and managed by the military.)

Chris M said at September 11, 2009 5:29 AM:

Problem is the high cost of the grid-tie inverters for domestic systems, not the actual PV cells and panels any more. Paying around $5000 for a hefty inverter put me off installing PV at my home; after all it is just an electronic box that has a finite lifespan, most likely much less than that of the panels.

Siphon said at September 13, 2009 5:44 AM:

According to the SolarBuzz website, inverters (residential scale) averaged around 70 to 80 cents per Watt. Significant but not terribly expensive. Remember these are diodes and electronics that have a historically very good learning rate (similar to or better than PV learning rates). Lifetime and efficiency have also improved and will likely get better, reducing the LCOE of the inverter even more.

Randall Parker said at September 13, 2009 8:22 AM:

Chris M, Siphon,

Could one use some DC appliances as a way to avoid the need for inverters? Look at computers. We could charge laptops during the day with DC power.

Could we also run ground sink heat pumps with DC power? How about freezers that do most of their freezing during daylight? They could lower the temperature of highly salty water.

anonyq said at September 13, 2009 6:26 PM:

What is a lot? That depends on the question. A million dollar is a lot of money for me but it is nothing for the US government. Alaska + Florida production would be less than 10% of US consumption. That doesn't sound like a lot to me. And 10% reduction in consumption is much cheaper than this

Engineer-Poet said at September 16, 2009 8:08 AM:

The switching power supplies inside computers might as well be inverters, for all the electronics they have.  Laptops aren't a big enough part of household loads to be worth designing systems around them.

Refrigerators and freezers are worthwhile targets for load-shifting.  Refrigerators can bank water ice when power is available and use small fans to move air past it and keep goods cool the rest of the time; freezers can use brine as the storage medium, though the freezing temperature will fall as the solute gets more and more concentrated.  Vacuum-insulated panels can slash the heat infiltration and reduce the need for cooling in the first place.

There are refrigerators built for DC power, though the sealed compressor with a capacitor-start induction motor remains the standard.  Whether the power supply to a fridge should be AC or DC depends on what's native to the application.  If the house is wired for 120 V 60 Hz, a DC fridge makes no sense; the least-cost option for PV is probably a grid-tied inverter, perhaps with a bit of battery backup and standalone capability for essential circuits (like the fridge).  If you've got an off-grid building and the native power is 24 VDC from PV and wind, running an inverter just in case the fridge might kick on makes no sense either; that unit should be DC.

EE Texas said at July 29, 2010 6:30 PM:

Problem is not U.S. inventiveness, it is happening. Main problem is reliability and the needed storage of generated power to provide the reliability. Second problem is the life cycle cost is not here yet without the 30% Federal Tax Credit, 5 year MACR depreciation and a good local utility rebate of around 2-3 dollars/watt, not to mention the need to have a solid solar availability for the location. There is a lot of work going on in new storage technology including molten salt, compressed air, and batteries. Also, check out the Stirling Energy Sun Catcher if you want to see what I believe is the path being taken for solar.

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