A new study from MIT (Massachusetts Institute of Technology), and NREL(Energy Department’s National Renewable Energy Laboratory), has revealed that production scale is more important than lower labor costs when it comes to solar manufacturing. This study, “Assessing Regional Trends In Solar Photovoltaic Manufacturing”, was published by Energy & Environmental Science. It was made possible through the Clean Energy Manufacturing Initiative of the Energy Department. Experts and media alike believe that China is the dominant country in solar manufacturing. This includes photovoltaic (PV), solar energy systems. New MIT/NREL research shows that China has a significant competitive advantage in solar manufacturing. This is due to its production scale and preferred access capital (indirect subsidies) as well as the supply chain benefits. The authors of the study also suggest that the USA could replicate China’s advantage. Alan Goodrich, Senior Analyst at NREL, and his colleagues created manufacturing cost models in order to study the causes of shifts away from a worldwide network of producers to a base that is primarily based in China. The study found that China has a history of low-cost manufacturing, which is due to its production scale and other country specific factors like inflation and risk. According to the authors, “technology innovation, global supply-chain developments could allow for increased manufacturing scale all over the globe, which would result in wider, subsidy-free, PV deployment in many regions” and may also lead to new investments in the crystalline silicon solar cells technology. According to the authors, this technology could eventually become economically as competitive as solar photovoltaic energy systems. The crystalline silicon solar cell technology could eventually be as economic as the photovoltaic systems. Alan Goodrich stated: “Our analysis shows that technology research and investment are crucial not only for widespread solar PV deployment in all locations without subsidy but may also equalize regional factors, creating new opportunities for U.S. manufacturers. It is still a race to find cost-competitive solar energy. There are incredible opportunities for growth.” David Danielson at the Energy Department is Assistant Secretary for Energy Efficiency and Renewable Energy. He stated that innovation is crucial to driving technological advances that will allow the U.S. gain a greater share of the global PV supply chain. Innovation could reduce costs and increase efficiency not only in PV manufacturing but also in other high-tech, high-value clean-energy technologies. This would allow U.S.-based manufacturing companies to lead in one of the most critical global economic races in the st Century. The research team used industry-validated manufacturing cost data to determine minimum sustainable prices (MSP). It is similar to how multinational manufacturers decide where their production facilities should be located. America requires innovation, low costs, and no subsidies. The current study showed that Chinese-based companies have an 23% advantage over U.S.-based ones, exempting shipping costs. The advantage that a China-based factory has over one based in the United States is largely due to its scale and advantages within the supply chain. If similar scale is possible, these advantages can also be duplicated in U.S. factories. To attract capital investment in America, PV must be innovative and low-cost, as well as able to compete with other countries without subsidies. Tonio Buonassisi from MIT was co-author. He said, “The ‘holy grail” is a PV module that has high efficiency, low materials costs, scalable and scalable manufacturing and an unquestionable reliability. These attributes are not present in all PV modules that you could buy, although they do include a handful. Practical technological innovation can be a major driver for photovoltaics’ convergence with traditional energy sources in both price and scale. For the common benefit of all countries, this is an opportunity to foster international cooperation and leverage our mutual strengths.
