Solar Cell - Cost

Cost

The cost of a solar cell is given per unit of peak electrical power. Solar-specific feed-in tariffs vary worldwide, and even state by state within various countries. Such feed-in tariffs can be highly effective in encouraging the development of solar power projects.

High-efficiency solar cells are of interest to decrease the cost of solar energy. Many of the costs of a solar power plant are proportional to the panel area or land area of the plant. A higher efficiency cell may reduce the required areas and so reduce the total plant cost, even if the cells themselves are more costly. Efficiencies of bare cells, to be useful in evaluating solar power plant economics, must be evaluated under realistic conditions. The basic parameters that need to be evaluated are the short circuit current, open circuit voltage.

The chart below illustrates the best laboratory efficiencies obtained for various materials and technologies, generally this is done on very small, i.e., one square cm, cells. Commercial efficiencies are significantly lower.

Grid parity, the point at which photovoltaic electricity is equal to or cheaper than grid power, can be reached using low cost solar cells. Proponents of solar hope to achieve grid parity first in areas with abundant sun and high costs for electricity such as in California and Japan. Some argue that grid parity has been reached in Hawaii and other islands that otherwise use diesel fuel to produce electricity. George W. Bush had set 2015 as the date for grid parity in the USA. Speaking at a conference in 2007, General Electric's Chief Engineer predicted grid parity without subsidies in sunny parts of the United States by around 2015.

The price of solar panels fell steadily for 40 years, until 2004 when high subsidies in Germany drastically increased demand there and greatly increased the price of purified silicon (which is used in computer chips as well as solar panels). The recession of 2008 and the onset of Chinese manufacturing caused prices to resume their decline with vehemence. In the four years after January 2008 prices for solar modules in Germany dropped from €3 to €1 per peak watt. During that same times production capacity surged with an annual growth of more than 50%. China increased market share from 8% in 2008 to over 55% in the last quarter of 2010. Recently, since the middle of 2010, the price has been dropped to $1.2–1.5/Wp (crystalline modules).