High-Efficiency Photovoltaic Crystalline Silicon Modules Rise to $8.6 Billion in 2015

Increasing competition, diminishing subsidies and falling costs for silicon have put increasing pressure on manufacturers of crystalline silicon (x-Si) cells and modules. These competitive pressures have prompted many tier-1 players to develop higher efficiency solar power panels, using emerging technologies such as selective emitter, HIT (heterojunction with intrinsic thin layer), or buried contact technology, according to a new report from Lux Research.

“Traversing the Road to Higher Crystalline Silicon Efficiencies: Who Stands to Change the Game, and How it Will Play Out”

“Traditionally, x-Si cell and module producers such as SunPower and Sanyo could command a higher price for more efficient panels,” said Pallavi Madakasira, a Lux Analyst and lead author of the report. “But the threat from low-cost Chinese manufacturers has forced such players to keep increasing the efficiency of their panels just to compete on cost – without earning a price premium.”

Commodity materials such as glass, aluminum and copper comprise the bulk of a photovoltaic solar energy system, and the prices of these materials do not significantly drop at higher volumes. Because higher efficiency panels produce more power, they reduce the cost of these materials on a per-watt ($/W) basis. Lux analysts found that a 1% improvement in absolute efficiency contributes to $0.05 to $0.08 savings per peak watt.

Among the key industry dynamics, Lux Research expects, that will dictate how higher efficiency products fare:

Economics move high-efficiency modules into utility uses. In the residential and commercial sectors, it may be difficult to justify the upfront cost for high-efficiency modules. In utility-size applications, however, where more funds can be made available and where projects need to be guaranteed for a long time, high-efficiency modules can work quite well.

There is a new wave of innovation and R&D spending among equipment suppliers. A push towards adoption and commercialization of high-efficiency technologies has meant that equipment suppliers are revisiting materials consumed and associated costs and technologies pursued.

Research labs and universities are increasingly becoming the core enablers to commercialization of new technologies. An increasing number of tier 1 manufacturers are collaborating with research labs or hiring away talent in an effort to bring proprietary technology know-how in-house.