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Trina says solar PV costs to fall, but prices not so much

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Chinese manufacturing giant Trina Solar – now the second largest solar PV manufacturer in the world – says there is little doubt that the cost of solar PV modules will continue to fall. It’s just that the price to consumers will no longer be following it down.

Pierre Verlinden, the chief scientist and vice-president of Trina, says solar PV costs will continue to fall as they have done – by around 20 per cent for every doubling in global cumulative production.

The issue for consumers now is that because cumulative production is nearing 200GW, the next doubling will take longer than the previous. So it may translate into a 5-6 per cent reduction each year.

And as the rationalization of the manufacturing industry continues, then producers will take advantage of lifting their margins to make their business profitable and sustainable. So prices may not rise, but they are unlikely to come down much anytime soon.

Verlinden, in Australia for a series of company-sponsored presentations to the Australian solar industry, notes another important change in the market – a flight to quality products.

“The great price decline is over. Customers used to be focused on what was cheapest, now they want the best quality,” he told RenewEconomy in an interview. “That is new, but I am glad for that. It is good for the industry.”

This is important because the levellised cost of electricity is highly influenced by the efficiency, and the longevity, of the module, as this graph below suggests.

trina longevity

Indeed, while Trina has a long term target LCOE of 6c/kWh, which would put it on par with most gas-fired generators, even in the US, that will depend on the efficiency gains – even more so than the manufacturing cost reductions. Both, though, will be important.

While most components of modules, such as silicon and wafers, and cell production, has fallen, some aspects have increased. This includes the cost of silver and labour costs, while aluminium has held around steady. The solar industry is the biggest industrial consumer of silver, and the price is rising accordingly. This is encouraging manufacturers to look at alternatives and increasing automation.

Verlinden also made some other interesting points. One is on the energy pay-back time for solar modules. He estimates it is currently around 1.5 years in the best solar regions, and about 3-4 years in the worst solar regions. He says it needs to get below a one year payback time.

The carbon footprint of the technology is also critical – and also influenced by the longevity of the product.

This graph shows how it compares with other key technologies. Trina puts its carbon footprint at 19g of CO2-e for ever kWh. That compares favourably with all technologies except for hydro.

trina footprint

The other challenge for the solar industry – particularly as solar PV penetrates further into the electricity market, and the business models of utilities – is on the issue of reliability and grid services.

Verlinden says it is critically important for solar to be able to provide voltage as well as power. That is where storage and smart grids will be critical.

“Pretty much all over the world, utilities have a big fear of a large penetration from solar PV. They are losing revenue.

“The main criticism is that solar PV is disruptive to grid. We need to address that and work with the utilities. We shouldn’t fight with  the utility, we should be partners, if they want to be.

“We know that we need to work on storage. Solar PV is the point where the penetration is big enough to create worries about dispatching that energy. So we need to integrate that with right inverters, with smart grid technology, and with efficient storage.”

 

 

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  • George Takacs

    Giles, thanks, as always, for the article. Just one point, the graph of relative CO2 emissions must be kg per MWh, or g per kWh. In the text you give it as g per MWh. I only realised when I went to the Trina website to get further info so I could determine how many years of production they were assuming from each panel (should have realised by looking at the coal figure). At 239 tonnes of CO2 per Mw of panel produced, assuming 4 hours per day, it turns out that 19 g CO2 per kWh assumes just 8.6 years panel life, or maybe 10 if you allow for panel temperature being higher than test temperature. This looks pretty conservative to me. If a panel produced for 25 years then the CO2 comes down to 7.6 g per kWh.

    • Giles

      Absolutely right. Fixed. Some more info which different to yours. Their calculation based on 1600 kWh/kW/year in sunny area and
      “carbon footprint of 781.8kg per KW produced for the entire
      module manufacturing process from raw material acquisition to
      packaging as environmentally friendly according to PAS 2050
      and ISO 14067 standards.”

      • George Takacs

        Thanks Giles for the additional info. So based on those figures it does look more like a 25 yr lifetime is assumed. I assume then that the lower amount of CO2 of 239 tonnes per MWh must just be for the processes at their plant, whilst the 782 tonnes is the complete figure including those elements you descibe above. Anyhow, those figures then give a CO2 payback time of six months if your solar is displacing coal fired electricity

  • RobS

    Interesting that the VP of one company thinks he can dictate the actions of a world market, of course when his competitor hears that they’re not moving anywhere they will simply undercut them by 1 c/W and they will lose their market share, the VP wants us to believe they won’t move down to match the market despite acknowledging falling costs? Yeh right.

    I think the rate of fall will drop substantially but with solar LCOE now below 10c/kwh we can afford for it to, soft costs are a bigger cut of the pie now particularly in the US so changes to panel prices are not vital for ongoing price cuts

  • wideEyedPupil

    Why is the gap between LCOE for 15yr to 25yr lines so much smaller than 5yr to 15 yr lines? Is it due to the deterioration and therefore reduction in panel power output (current or voltage drops)? Seems like a big difference given the doubling of payback opportunity.

    • Zach

      It almost certainly has to do with a discount rate on future value.

    • RobS

      Going from 15 to 25 years is a 66% increase, going from 5 to 15 yrs is a 200% increase

  • RobS

    Considering this assumes $3.50 per watt installed and our Average in Australia for 3-5kw systems is now around $1.70-$2/W that would suggest with a 25 year lifespan and 1% per year degradation about 4-5c/kWh electricity, competing with ~28c/kWh retail grid power. The utilitties aren’t going to know what’s hit them.