FYI: Something from the PA Department of Environmetal Protection daily news
digest for today, 1/29/08:
Report: Solar PV Costs to Plummet in 2009
LONDON, UK (Dec. 29) The cost of photovoltaic electricity is due to plummet in
2009, according to leading clean energy analysts at New Energy Finance.
The analysts’ Silicon and Wafer Price Index shows average silicon contract
prices falling by over 30 percent in 2009, compared with 2008. With thin-film
PV module manufacturing costs approaching the $1/Watt mark, crystalline
silicon-based PV will come under severe competition for larger projects,
resulting in margins shrinking throughout the silicon value chain.
“We are about to see the convergence of two powerful forces in solar
photovoltaics: the price premium accruing to silicon refining is about to
unwind, at the same time as thin-film manufacturing is really starting to get
to scale,” said Michael Liebreich, chairman and CEO of New Energy Finance. “We
expect to see significant drops in the price of modules next year – with prices
starting to track real underlying costs much more closely. Any manufacturer who
does not have access to cheap silicon and who has not focused on manufacturing
costs is going to be in trouble. The big shake-out is about to begin. The next
two years will change the economics of PV electricity out of recognition.”
New Energy’s Silicon and Wafer Price Index shows an average perceived spot
market price of solar-grade silicon during October and November of $332/kg. The
weighted average price for polysilicon for delivery in 2009 under contracts
signed in 2007 and 2008 was $113/kg, compared with $165/kg for silicon for
delivery in 2008, a reduction of 31.5 percent.
At the 2008 contracted silicon price of $165/kg, silicon contributes an
estimated $1.52/W to the current crystalline silicon module price of around
$4/Watt – or just under 40 percent. A silicon cost reduction to $113/kg in 2009
would therefore lower module prices for the majority of the market volume that
uses contracted silicon by 12 percent.
The silicon purchased on the spot market, though currently at much higher
prices, could see even more precipitous falls: among respondents to the New
Energy Finance Silicon and Wafer Price Index, 73 percent anticipate lower spot
prices for polysilicon in 2009.
Although the decrease in silicon prices will be good news for silicon-based
cell and module-makers, another threat is now looming larger. New Energy
Finance forecasts that production of thin-film photovoltaic modules will more
than quadruple to 1.9GW in 2009, and thin-film technology will be competitive
with crystalline silicon photovoltaic in larger space-constrained applications,
such as commercial rooftops and smaller on-grid projects.
Thin-film PV is less efficient at converting solar energy to electricity, with
efficiencies of 6-11 percent rather than the 13-18 percent displayed by
commercial crystalline silicon technology. Thin-film therefore sells at a
per-Watt discount to crystalline silicon as it takes up more space and requires
more ancillary equipment to produce the same power. However, with manufacturing
costs approaching $1/Watt, it is an attractive option for larger
space-constrained applications .
This may pressure crystalline silicon module manufacturers to reduce their
selling prices by more than the reduction in costs in order to retain their
edge in the market. New Energy Finance analysis, based on the historic cost
experience curve, suggests that current silicon-based solar module prices of
$4/Watt could drop to $2.60/Watt by the end of 2009, a reduction of 35 percent,
before leading manufacturers started making losses on marginal sales.
For a ground-mounted plant in a region with good insolation, and based on a 6
percent real cost of capital, this could translate into an unsubsidised
generation cost of $0.17/kWh for crystalline – competitive with daytime peak
electricity prices in many parts of the world. Meanwhile, thin-film
manufacturers can achieve unsubsidised costs of $0.13/kWh for the same large
project by 2010.
There will also be a third factor at work, helping to bring this about. The
credit crunch will impact the ability of some solar project developers to find
debt finance. This will slow the build-out of solar projects, intensifying
downward pressure on prices and potentially shifting the market from
value-based to cost-based pricing.
For more information, visit www.newenergymatters.com.
Daily Update Home || News by Subject || Week in Review || DEP Home
Commonwealth of Pennsylvania, Department of Environmental Protection
DEP Press Office Contact: Susan Rickens, Editor
P.O. Box 2063, Harrisburg, PA 17105-2063
(717) 787-1323
All Rights Reserved
_______________________________________________
For more information about sustainability in the Tompkins County area, please
visit: http://www.sustainabletompkins.org/
RSS, archives, subscription & listserv information for:
[email protected]
http://lists.mutualaid.org/mailman/listinfo/sustainabletompkins
Questions about the list? ask [email protected]
free hosting by http://www.mutualaid.org
