4.4.2 PV MODULE COSTS

The costs of manufacturing solar cells and modules have been falling steadily. On average, the price of modules has fallen by ~5% per annum over the last 20 years, and is projected to continue to fall for the next 20 years.

In the scenario outlined in the EPIA/Greenpeace study "Solar Generation" - a blueprint for bringing solar electricity to 1 billion people by 2020", it is projected that the price per Wp for a new cell production plant will drop from €1.69 in 2001 to €1.12 by 2010. Between 2010 and 2020 a further price decrease is anticipated. On the basis of a 20% progress ratio, the cost of "ready to install" modules would fall by more than two thirds - from €3/Wp in 2001 to less than €1/Wp in 2020.

The grid-connected market must still depend for the moment on government incentive programmes, but this situation is expected to change as the PV market becomes increasingly self-sustaining, with expanding market sizes in all sectors. As with any technology the development of a learning curve leads to cost reductions. In the case of PV the cost decrease is expected to be around 20% every time the total installed capacity is doubled. The effect of sales volume on cost reduction for PV systems can be seen in figure 4.8

Source: Adapted from "Solar Generation" EPIA/Greenpeace, December 2001
Figure 4.8: The falling cost of PV as shipments increase