Cost and market perspectives of photovoltaics

Dolf Gielen

TeraWatt workshop Freiburg, 16-17 May 2022

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Utility-scale solar PV

-91% PV module prices

COSTS -82% Total installed costs
2010-2021
-87% Levelised cost of electricity

+55% Module power (watts)

PERFORMANCE ̴17% Capacity factor
2010-2020
14.7% to 20% module efficiency
̴24% cell efficiency
 Solar PV industry propelled by its cost
competitiveness
2010-2021 2010-2021

87% reduction

-13%

• Brazil < 2 USD ct/kWh

• Portugal < 1.4 USD ct/kWh
• Middle East < 1.2 USD ct/kWh
Source: IRENA Renewable cost database, 2022 and https://www.irena.org/publications/2021/Jun/Renewable-Power-Costs-in-2020 Data for 2021 is preliminary
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 133 GW/yr
Installed (AC)

693 TWh
Generation
Preliminary March 2022 data, update in July 1.18 TWh/GW

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Solar PV market to grow
substantially in 2022
200-250 GW new built (DC)
Growing European market
incl. Poland
EU-27 26 GW added in 2021
Projection 10 GW installed
solar in Poland by end 2022
3.2 GW added in 2021
Currently 20% ROI for
industrial consumers

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 Role of solar PV in the electricity sector in a 1.5oC
scenario
PV sector in the next three decades
• Annual additions ~ 450 GW (from
126 GW last year) – already this
decade
• 360 billion USD/year
Consensus from different actors on the way to go Solar PV
• ~ 14.5 TW (from 707 GW
in 2020)
• 18 000 TWh
• 46% share capacity

Source: https://www.irena.org/publications/2022/Mar/World-
Energy-Transitions-Outlook-2022
Regional distribution of total installed capacity (GW) in 2020, 2030, 2050

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Typical utility scale project cost breakdown –
it’s not all about modules

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Source: IRENA
Residential solar PV vs utility scale:
installed cost comparison
• Australia and Brazil - modest
differentials between the two
systems but evidence that
utility-scale systems are
becoming more competitive.
• France, Germany and UK:
residential systems increase as
utility-scale costs fall faster than
residential systems leading to a
growing percentage difference
• Japan: the only market where
residential system cost declined
strongly in absolute and
percentage terms.

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Solar PV trends
Percentage of total production (GW)
75 99
Modules
108
manufacturing
137
capacity
5% 4% 4% 6%
3% 3% 2%
6% 1%
8% 9% 8% U.S.
• 1 TW installed capacity end 2021 (DC), >200 5%
2%
2% France
Vietnam

GW(DC) expected in 2022 Taiwan

South Korea
74% 72% 72%
67%
• Approx. 1 TWh (AC)/GW installed capacity
Singapore
Japan
India
(DC) 7% 7% 6% 6%
Germany
China

• China dominates world production of

2016 2017 2018 2019

Source: BNEF, 2021

polysilicon (66%), wafers (>95%), cells (78%)
C-Si Modules manufacturing capacity additions
and modules (72%)
• Wafer size growth has enabled larger PV
module size allowing power range +600 W per
module
• Material usage for silicon cells reduced
• Efficiencies continue to increase
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Trend towards mono-Si
• Trend away from
multicrystalline silicon and thin
film towards monocrystalline
silicon (est. 90% market
share in 2022)

• Silicon multijunction solar

cells (IIIV/silicon, IIVI/silicon,
chalcopyrite/silicon,
perovskite/silicon)
• popular and closer to
economic
competitiveness
• efficiency gains for new
technology may allow for
new entrants Source: Fraunhofer ISE, 2021

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Changes to mainstream c-Si wafer, cell, & module
technology over time

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Source: NREL, 2021: Woodhouse et al. Research and Development Priorities to Advance Solar Photovoltaic Lifecycle Costs and Performance.
 Solar PV module price trends, 2009-2021
• Solar PV module costs – important driver
for improved competitiveness
• Crystalline silicon module prices declined
between 89% and 95% in Europe (Dec
2009 to Dec 2020)
• Factors:
 Increased economies of scale in
manufacturing,
 reduced labour costs,
 falling material prices
 materials use efficiencies,
 process optimisation
 continuous increase in module
efficiencies
• 2021 supply chain disruptions led to
higher material costs or lower availability
and pushed up prices
 Solar PV module price trends, 2017-2022
• Solar PV module costs –
uncharacteristically on the high
• Factors:
 Polysilicon capacity challenges drove a rise
of 11 USD/kg to over USD 30/kg in 2021
 surging costs for other commodities: silver,
copper, aluminium, and glass
 exacerbated by other pandemic-related
logistic and global-freight and shipping
challenges
 Local market prioritization in China and
import/trade checks in some markets (US).
• Longer-term module costs will continue to
decline, once commodities start to stabilize
and supply-demand equilibrium rebalances
as technology and process innovation
proceeds.
Rising prices of critical materials for the energy transition
- a transient phenomenon ?
Copper price [1000 USD/t]
• Rising prices of critical materials 2021
x2 from 2020-present
• Examples copper, polysilicon, silver
 10% of silver use for solar PV
• Rising prices create boost mining & production profitability
• Battery, solar PV, grid cost are affected
• However significant price reductions in recent months for
some key commodities

Falling silver price Polysilicon

Aluminium has peaked
price x3 in 2021

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Considerations for a successful industrial energy
transition – ability to build a local industry ?
Net zero ambitions yes, but net zero implementation?

Access to renewable energy & enabling infrastructure

Additional cost, competitiveness and carbon leakage –

certification for green commodities

Systemic innovation – flexibility, adjusted global value chains

Social acceptance

International quality infrastructure considering context of new

markets

Stranded assets and retrofit potentials for integrated production

processes

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 Thank you
[email protected]

www.irena.org www.instagram.com/irenaimages

www.twitter.com/irena www.flickr.com/photos/irenaimages

www.facebook.com/irena.org www.youtube.com/user/irenaorg
 Emerging markets in locations with different weather
conditions – need to consider new standards
Importance of Quality Infrastructure to Weather Impact Issue
Ensure Healthy Markets
Extreme Temperature Reduced efficiency, affects PID

Temperature variations Broken interconnects, broken cells,

solder bond failures, junction box
adhesion problems, open circuits
leading to arcing, open circuits of the
module connection, etc.
Dust storms Abrasion, soiling, cementation, hot
spots, etc.
Drought Affects ventilation systems
(transformer)
UV Irradiation EVA-browning, encapsulant adhesion
or delamination; damage to (cable)
isolation

Standardisation & Conformity Assessment

• IEC 61701/62716 (salt/ammonia corrosion)
• IEC TS 62782 (mechanical load)
• IEC TS 62804 (PID)
• DIN 52348 (sand abrasion test)
• IEC 62892: Additional tests to reflect different climates and applications (thermal stress, UV, high humidity)
Source: https://www.irena.org/publications/2017/Sep/Boosting-solar-PV-markets-The-role-of-quality-infrastructure
 Inverters
• Inverter efficiency for state-of-the-art brand products is 98% and higher
• String inverters:
 market share 64%
 Used in residential, small and medium commercial applications in PV systems up to 150 kWp
• Central inverters:
 Market share: 34%
 Used in large commercial and utility-scale systems
• Trends: Digitalisation, repowering, new features for grid stabilization and optimization of self-consumption,
storage, utilisation of innovative semiconductors (SiC and GaN) which allow very high efficiencies and
compact designs; 1500 V maximum DF string voltage

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