Trina Solar: Stagnant module prices until 2017


US$0.73 or €0.54 was the cost of a solar module end of 2012 according to Trina's Verlinden. This is approximately the minimum price set by the EU this summer. Hereafter, price falls in the coming years seem rather improbable. This was the view of the Chief Scientist at this year's EU PVSEC.

Compared to the beginning of 2008, prices have fallen by more than 80%. Since then the quantity of solar modules produced has risen from 13 to 150.3GW. When examining the learning curve, which predicts the production cost reduction based on the increase in production capacity, the production costs ought to have decreased by only 53.3%. In other words, production of modules were expected to cost 46.7%, which was awaited in 2008. The prices of modules however sank to 18.25%.

Learning curve models are only an approximation of the actual cost. In a detailed analysis of the production costs of multi-crystalline modules, Verlinden listed the cost reductions for individual segments of the value chain. When looking at it this way, the silicon costs fell to 11.65%, but the module production costs only to 61%, and the cell production costs to 75%. All in all Verlinden calculated the production cost to be 29.9% of the figure in 2008. This applies more or less to all Chinese PV manufacturers. With the exception of the very sharp fall in raw material cost for silicon, the forecast more or less corresponds to the learning curve model. The prices have fallen significantly more than the cost of production.

Stagnation until 2017?

Verlinden based his opinion on this analysis to explain why modules are thus currently too cheap. The margins are lacking for manufacturers, thereby, hampering growth. Reasonable would be a figure around 30%. Therefore the prices would now probably stagnate until production costs fall far enough that this 30% margin, which was partially even exceeded from 2000 to 2010, is reached again.

From the learning curve perspective, around 650 GW of modules need to be additionally produced. With an industry growth of 40% per year it would take up to 2017, or with a growth rate of 25% even up to 2019, before this volume is reached and module prices could fall back to sustainable production figures.

When this scenario is reached, according to Verlinden's analysis, the costs can even start climbing again with the eventual onslaught of higher silver prices. With a 25% industry growth the solar sector could be consuming more silver than the jewelry sector. This consumption will also keep increasing. When silver supply becomes scarce, prices will increase. Verlinden assumes that cell producers will be needing around 116 mg of silver per cell.

Still there have been developments that promise the reduction of silver consumption. At the EU PVSEC for example, Heraeus introduced a cell with only 54 mg of silver, and many scientists are hard at work to replace silver completely with copper.

Cost reduction still possible

Cost reductions with advances in module technology are more than possible if module prices remain stable, and the efficiency of cells increase. This reduces, relatively, the BOS-cost share of the system costs per Watt-peak. As for the portion on efficiency increase, there were developments to be seen at the EU PVSEC in Paris. Trina Solar is also looking to introduce a PERC monocell next year whose efficiency is expected to be up 1.5% over the current Honey cells, as Verlinden highlighted.

It is to be noted that the obvious course for module manufacturers is to pre-calculate their own costs such that even lower prices do not come about. However it is also the opinion of analysts that module producers, at least at the beginning of the year, could not have earned any money with the prices then.

Translated and edited by Shamsiah Ali-Oettinger

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