The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation
Using a bottom-up cost model, we assess the impact of initial factory capital expenditure (capex) on photovoltaic (PV) module minimum sustainable price (MSP) and industry-wide trends. We find capex to have two important impacts on PV manufacturing. First, capex strongly influences the per-unit MSP o...
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| Format: | Article |
| Language: | en_US |
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Royal Society of Chemistry
2016
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| Online Access: | http://hdl.handle.net/1721.1/101914 https://orcid.org/0000-0001-8345-4937 |
| _version_ | 1826198024298168320 |
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| author | Powell, Douglas M. Fu, Ran Horowitz, Kelsey Basore, Paul A. Woodhouse, Michael Buonassisi, Tonio |
| author2 | Massachusetts Institute of Technology. Department of Mechanical Engineering |
| author_facet | Massachusetts Institute of Technology. Department of Mechanical Engineering Powell, Douglas M. Fu, Ran Horowitz, Kelsey Basore, Paul A. Woodhouse, Michael Buonassisi, Tonio |
| author_sort | Powell, Douglas M. |
| collection | MIT |
| description | Using a bottom-up cost model, we assess the impact of initial factory capital expenditure (capex) on photovoltaic (PV) module minimum sustainable price (MSP) and industry-wide trends. We find capex to have two important impacts on PV manufacturing. First, capex strongly influences the per-unit MSP of a c-Si module: we calculate that the capex-related elements sum to 22% of MSP for an integrated wafer, cell, and module manufacturer. This fraction provides a significant opportunity to reduce MSP toward the U.S. DOE SunShot module price target through capex innovation. Second, a combination of high capex and low margins leads to a poor financial rate of return, which limits the growth rate of PV module manufacturing capacity. We quantify the capex of Czochralski-based crystalline silicon (c-Si) PV manufacturing, summing to 0.68 $/W[subscript aCap] ($ per annual production capacity in watts, $year/W) from wafer to module and 1.01 $/W[subscript aCap] from polysilicon to module. At a sustainable operating margin determined by the MSP methodology for our bottom-up scenario, we calculate the sustainable growth rate of PV manufacturing capacity to be ∼19% annually – below the historical trend of ∼50% annually. We conclude with a discussion of innovation opportunities to reduce the capex of PV manufacturing through both incremental and disruptive process innovation with c-Si, platform innovations, and financial approaches. |
| first_indexed | 2024-09-23T10:57:40Z |
| format | Article |
| id | mit-1721.1/101914 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T10:57:40Z |
| publishDate | 2016 |
| publisher | Royal Society of Chemistry |
| record_format | dspace |
| spelling | mit-1721.1/1019142022-10-01T00:15:35Z The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation Powell, Douglas M. Fu, Ran Horowitz, Kelsey Basore, Paul A. Woodhouse, Michael Buonassisi, Tonio Massachusetts Institute of Technology. Department of Mechanical Engineering Powell, Douglas M. Buonassisi, Tonio Using a bottom-up cost model, we assess the impact of initial factory capital expenditure (capex) on photovoltaic (PV) module minimum sustainable price (MSP) and industry-wide trends. We find capex to have two important impacts on PV manufacturing. First, capex strongly influences the per-unit MSP of a c-Si module: we calculate that the capex-related elements sum to 22% of MSP for an integrated wafer, cell, and module manufacturer. This fraction provides a significant opportunity to reduce MSP toward the U.S. DOE SunShot module price target through capex innovation. Second, a combination of high capex and low margins leads to a poor financial rate of return, which limits the growth rate of PV module manufacturing capacity. We quantify the capex of Czochralski-based crystalline silicon (c-Si) PV manufacturing, summing to 0.68 $/W[subscript aCap] ($ per annual production capacity in watts, $year/W) from wafer to module and 1.01 $/W[subscript aCap] from polysilicon to module. At a sustainable operating margin determined by the MSP methodology for our bottom-up scenario, we calculate the sustainable growth rate of PV manufacturing capacity to be ∼19% annually – below the historical trend of ∼50% annually. We conclude with a discussion of innovation opportunities to reduce the capex of PV manufacturing through both incremental and disruptive process innovation with c-Si, platform innovations, and financial approaches. National Science Foundation (U.S.) (NSF CA EEC-1041895) United States. Dept. of Energy 2016-03-30T13:42:58Z 2016-03-30T13:42:58Z 2015-09 2015-05 Article http://purl.org/eprint/type/JournalArticle 1754-5692 1754-5706 http://hdl.handle.net/1721.1/101914 Powell, Douglas M., Ran Fu, Kelsey Horowitz, Paul A. Basore, Michael Woodhouse, and Tonio Buonassisi. “The Capital Intensity of Photovoltaics Manufacturing: Barrier to Scale and Opportunity for Innovation.” Energy Environ. Sci. 8, no. 12 (2015): 3395–3408. © 2015 Royal Society of Chemistry https://orcid.org/0000-0001-8345-4937 en_US http://dx.doi.org/10.1039/C5EE01509J Energy & Environmental Science Creative Commons Attribution 3.0 Unported licence http://creativecommons.org/licenses/by/3.0/ application/pdf Royal Society of Chemistry Royal Society of Chemistry |
| spellingShingle | Powell, Douglas M. Fu, Ran Horowitz, Kelsey Basore, Paul A. Woodhouse, Michael Buonassisi, Tonio The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation |
| title | The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation |
| title_full | The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation |
| title_fullStr | The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation |
| title_full_unstemmed | The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation |
| title_short | The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation |
| title_sort | capital intensity of photovoltaics manufacturing barrier to scale and opportunity for innovation |
| url | http://hdl.handle.net/1721.1/101914 https://orcid.org/0000-0001-8345-4937 |
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