Do the Sharp and Solar City Announcements Mark the Beginning of Solar Without Subsidies?

aa CT-RENE     Featured on:  Cleantechnica, REconomy

By Clayton Handleman

PV has reached the point of commoditizing high efficiency modules and the ripple effect on system level costs has profound implications.  Not so long ago Sunpower’s 20+ % High Efficiency Modules (HEM) were seen as high end niche products.  Last week Solar City announced that they had leapfrogged the Sunpower benchmark with 22% modules that are now rolling off of their 100 MW lines.  They also promised that these HEMs will soon be rolling of their 1 GW line at Elon Musk’s ‘other’ gigafactory in Buffalo NY.  In the 2016, 2017 time frame multiple vendors will be at GW scale with HEMs marking this technology’s transition to high volume production on an industry and world scale. This volume, combined with multiple entrants competing will create a competitive environment which will continue to put downward pressure on prices.

Adding fuel to the fire Sharp, a long time leader in PV recently announced that they are joining the HEM club, in impressive style, raising the bar again with a 22.5% efficiency benchmark from production prototypes.   Presumably they will not be far behind with large scale manufacturing.  And the longtime leader, Sunpower, is in the process of upping their game with 23% efficient modules planned for production in 2017 from their Fab 5.  Fab 5 has a planned 800MW (.8GW) capacity that will also produce solar HEMs at the GW scale.

The importance of these announcements cannot be overestimated.  It was only a very short time ago that those who have held onto the vision of clean domestic energy for decades saw PV cross the threshold to cost effectiveness WITH subsidies.  Now we are thrilled to see that cost effective PV without subsidies is in reach during our lifetimes.  Solar City has long stated that their plan is for their residential PV systems to be cost competitive without subsidies by the time US tax credits expire.  Low cost, high efficiency modules offer a path to that goal by reducing the physical size of solar arrays and the size related costs.   The benefits of high efficiency include reduced footprint and reduced balance of system costs on a dollars per kwhr basis and amortization of fixed costs over a larger system capacity.  This article has a nice graphic showing the economics nearly a year ago.  They are only getting better.  And things have only gotten better since it was written.

Many residential systems are limited by roof space not desired capacity.  And a substantial fraction of the cost of residential systems is fixed.  As such, by increasing the array capacity those costs can be amortized over a larger project.  This reduces the cost per watt and therefore the cost per kwhr.  As module prices have dropped Balance of System costs for racking, wires etc. are contributing a larger percentage of system costs.  Because more efficient modules provide more energy per square foot, they reduce the cost of balance of system components on a dollars per watt basis.

The recent announcements offer the final piece of the puzzle, gigawatt scale manufacturing that can provide high volume and lower price.  Solar city is doing that with their PV gigafactory and Panasonic has the scale to develop manufacturing on a globally significant level.  When Sunpower was the only game in town and they were producing a tiny fraction of the worlds PV modules, it really didn’t matter how much their modules cost, they had no real impact on the cost of solar globally.  However with the emergence of gigawatt scale assembly lines, Solar City’s vision of PV reaching grid parity even as incentives are phased out, appears to be coming to pass.  And in volumes with global significance.  Clearly the industry is rapidly transitioning to greater than 20% efficiency as the new normal.  And with it, the brass ring of cost effective solar without subsidies is rapidly coming within reach.

A story that came out after mine that has the same idea.

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8 Responses to Do the Sharp and Solar City Announcements Mark the Beginning of Solar Without Subsidies?

  1. Pingback: Do big leaps in solar module efficiency mark the beginning of solar without subsidies? : Renew Economy

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  8. gbsr says:

    That slow efficiency improvement (~0.3%/a) towards panels with >30% (e.g. in combination with a layer stabilized perovskite) and further towards 40% (check the cars in the N-S Australian solar car race), is not the only improvement.

    The gradual increases in guaranteed life times (now with bank guarantees here, as a company can break down in 30yrs) are equally important.
    So it becomes economic to built new building with PV-panels as the roof, etc.

    Would be interesting to see the mechanisms behind those life time increases. May be you can spend a post on that?
    Similar regarding the relative short life period of inverters.

    Like

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