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The Roadmap to El Dorado: SunEdison’s PV Module Technology Strategy
The Roadmap to El Dorado: SunEdison’s PV Module Technology Strategy
SunEdison wants to be the lowest-cost module manufacturer in the world at 40 cents per watt for a 20% efficient module in 2016. How is this possible?
Shyam Mehta September 19, 2013
<snip>
Source: SunEdison Module Cost Target: Cheaper Than the Chinese
To put these targets in context, consider that SunEdison’s module cost in 2012 was 67 cents per watt, implying a planned reduction of over 40 percent from 2012 to 2016. Considering that prices for key module materials like polysilicon, glass, frame and encapsulants are widely expected to level off following a painful and protracted period of compression in 2011 and 2012, and that consumables price reductions contributed around 80 percent of the cost declines we saw from 2010 to 2012, it’s fair to say this is an aggressive target.
Just how low SunEdison is planning to go becomes all the more clear when its module cost target is compared to GTM Research’s base case estimate of $0.38 per watt for industry-leading Chinese producers in 2016. The comparison isn’t apples-to-apples, as SunEdison’s target includes non-manufacturing costs such as selling expenses, warranty, and inbound freight, which would contribute $0.06-$0.10 per watt. In other words, SunEdison is shooting for a “core” manufacturing cost (defined as depreciation of property/plant/equipment costs, materials, direct labor and utilities) of $0.30-0.35 pr watt by 2016 -- which is comfortably below our estimate for Chinese producers, and would likely position SunEdison as the lowest-cost module manufacturer in the world.
Conversion Efficiency Target: Head and Shoulders Above the Herd
If SunEdison’s module cost target seems ambitious, its conversion efficiency roadmap is likely to turn even more heads. Assuming a 72-cell module, its 2016 power rating target of 400 watts translates to a conversion efficiency of around 20.4 percent. This compares to a mean efficiency of 16.3 percent for the firm’s Silvantis monocrystalline module at present and implies an average increase of almost 1.5 percent per year for the next few years -- almost eight times higher than the historical rate of improvement for crystalline silicon technology in recent years (roughly 0.2 percent per year). At this level, SunEdison would be placed far ahead of both multi and mono c-Si Chinese fleet efficiencies -- even assuming, as GTM does, that the Chinese mono line incorporates a selective emitter platform at that point. In fact, a more appropriate comparison would be with industry leaders in efficiency such as SunPower, Silevo and Panasonic, all of which use highly proprietary IP to drive efficiency gains above and beyond the mostly commoditized technology of the mass market.
Source: PV Technology and Cost Outlook, 2013-2017
However, there is a very important difference between SunEdison’s roadmap and those of efficiency leaders like SunPower and Panasonic, and this is where things get interesting. Step-function efficiency increases generally come at the expense of additional costs, be it through additional capital investment, a bigger or more expensive bill of materials, more process steps, or lower manufacturing yields. SunPower and Panasonic, for example, have amongst the highest module cost structures in the industry. SunEdison, on the other hand, is aiming for a cost structure below that even of the lowest-cost Chinese firms.
The chart below, which plots efficiency against manufacturing cost for different firms’ ...
SunEdison wants to be the lowest-cost module manufacturer in the world at 40 cents per watt for a 20% efficient module in 2016. How is this possible?
Shyam Mehta September 19, 2013
<snip>
Source: SunEdison Module Cost Target: Cheaper Than the Chinese
To put these targets in context, consider that SunEdison’s module cost in 2012 was 67 cents per watt, implying a planned reduction of over 40 percent from 2012 to 2016. Considering that prices for key module materials like polysilicon, glass, frame and encapsulants are widely expected to level off following a painful and protracted period of compression in 2011 and 2012, and that consumables price reductions contributed around 80 percent of the cost declines we saw from 2010 to 2012, it’s fair to say this is an aggressive target.
Just how low SunEdison is planning to go becomes all the more clear when its module cost target is compared to GTM Research’s base case estimate of $0.38 per watt for industry-leading Chinese producers in 2016. The comparison isn’t apples-to-apples, as SunEdison’s target includes non-manufacturing costs such as selling expenses, warranty, and inbound freight, which would contribute $0.06-$0.10 per watt. In other words, SunEdison is shooting for a “core” manufacturing cost (defined as depreciation of property/plant/equipment costs, materials, direct labor and utilities) of $0.30-0.35 pr watt by 2016 -- which is comfortably below our estimate for Chinese producers, and would likely position SunEdison as the lowest-cost module manufacturer in the world.
Conversion Efficiency Target: Head and Shoulders Above the Herd
If SunEdison’s module cost target seems ambitious, its conversion efficiency roadmap is likely to turn even more heads. Assuming a 72-cell module, its 2016 power rating target of 400 watts translates to a conversion efficiency of around 20.4 percent. This compares to a mean efficiency of 16.3 percent for the firm’s Silvantis monocrystalline module at present and implies an average increase of almost 1.5 percent per year for the next few years -- almost eight times higher than the historical rate of improvement for crystalline silicon technology in recent years (roughly 0.2 percent per year). At this level, SunEdison would be placed far ahead of both multi and mono c-Si Chinese fleet efficiencies -- even assuming, as GTM does, that the Chinese mono line incorporates a selective emitter platform at that point. In fact, a more appropriate comparison would be with industry leaders in efficiency such as SunPower, Silevo and Panasonic, all of which use highly proprietary IP to drive efficiency gains above and beyond the mostly commoditized technology of the mass market.
Source: PV Technology and Cost Outlook, 2013-2017
However, there is a very important difference between SunEdison’s roadmap and those of efficiency leaders like SunPower and Panasonic, and this is where things get interesting. Step-function efficiency increases generally come at the expense of additional costs, be it through additional capital investment, a bigger or more expensive bill of materials, more process steps, or lower manufacturing yields. SunPower and Panasonic, for example, have amongst the highest module cost structures in the industry. SunEdison, on the other hand, is aiming for a cost structure below that even of the lowest-cost Chinese firms.
The chart below, which plots efficiency against manufacturing cost for different firms’ ...
http://www.greentechmedia.com/articles/read/The-Roadmap-to-El-Dorado-SunEdisons-PV-Module-Technology-Strategy?utm_source=Solar&utm_medium=Picture&utm_campaign=GTMDaily
This is an excellent, detailed article that deserves a full read if you have the time.
