The global PV industry’s recent past has seen wafer, cell, and module suppliers at the mercy of an inhospitable supply-demand imbalance throughout the global market. With supply consistently 200% of demand annually, c-Si module prices have fallen approximately 70% in two years. One positive externality of this cutthroat pricing is that manufacturing costs have fallen in line with pricing declines. This is mostly because pricing for key inputs further up the value chain has also fallen as a result of overcapacity and consequent margin evaporation.
Back in 2009/10, industry roadmaps were targeting $1.00/W module costs as a medium-term goal. With best-in-class Chinese producers approaching costs of $0.50/W in 2013, yesterday’s goals are no longer relevant today. However, as noted, the majority of cost reduction over the last two years has been driven by declines in consumables prices. This state of affairs has left both manufacturers and their customers with considerable uncertainty, and there is currently little consensus on what is a realistic goal for the module supply chain to set for itself over the next three to five years. It is in the context of this lack of clarity that this report was conceived.
FIGURE: Contribution of Key Drivers Toward Module Cost Reduction, Best-in-Class China Producer, Q4 2010-Q4 2012
Source: PV Technology and Cost Outlook, 2013-2017