How falling prices of polysilicon, high-purity quartz and silver paste affect solar module costs

The consulting company Rethink Energy studied the development of the price of strategic elements of photovoltaic panels over the next 15 years and their effect on the price of solar energy. The company estimates that PV module prices could drop to €84.3/kW in 2030 and €65/kW in 2040 – compared to around €140.8/kW today for a silicon solar module leaving a factory in China.

The overall cost of solar modules is not expected to rise again until 2040, according to forecasts by California-based consulting firm Rethink Energy. Its analysts released a report that studies the impact of falling prices for polysilicon, high-purity quartz, silver paste and other elements on the price of solar energy.

In its forecast, the company estimates that global demand for solar modules will peak at 1,308 GW in 2037, with a total installed capacity of 19 TW in 2040, more than twelve times the current fleet of 1.5 TW. “This is a modest increase from our previous forecasts,” explains Rethink Energy, which appears confident that the availability of strategic materials will be sufficient to support such growth.

“We made forecasts for some elements of solar modules based on a learning curve based on past performance and projected based on expected industry scale,” the agency explains. Some elements of the supply chain, such as industrial silicon or glass, will not benefit from a learning curve because their manufacturing processes are already very well understood and scaled. Others, such as high purity quartz and silver paste, must be judged more in terms of scarcity or based on technological modifications that are more categorical in nature than a learning curve can describe. »

Based on its predictions, Rethink Energy was able to construct a curve estimating the evolution of the total price of a solar module, taking as a starting point the current average price of a silicon solar module leaving the factory in China, or $154 per kilowatt. (around 140.8 euros/kW). The analyst firm’s projections call for a price of $92.2 per kW (€84.3/kW) in 2030, then $71.1 per kW (€65/kW) in 2040.

The report’s methodology is based on mathematical modeling of the downward trend of production costs in certain phases of the photovoltaic value chain. In particular, Rethink Energy believes that the optimization of certain manufacturing parameters will further reduce the costs of some module manufacturing processes, especially in the industrial processing of silicon and glass.

Another methodological element consisted in the estimation of the effective reduction in the use of raw materials in the modules and in particular some elements that became scarce after the pandemic, “and which will remain there for years, even decades”. “To achieve this, we had to build on our previous forecasts of the total number of solar installations worldwide and extrapolate current trends in the market share of cell types, in addition to forecasting the market share of perovskite subtypes distributed in thin films. films and tandems,” explains Rethink Energy.

Finally, the firm says it has estimated solar cell and module efficiency gains taking into account the theoretical maximum efficiency for each cell technology and their respective market shares. In Rethink Energy’s case, improving cell efficiency will make all other elements of the module cheaper on a per kW basis.

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