Solar PV continues to shoot down the cost curve
By Giles Parkinson on 17 February 2014

One of the most misunderstood aspects of the solar PV phenomenon over the past 5 years is the idea that it has been that it has been driven entirely by surplus capacity from China, and little else. Defenders of fossil fuel generation will tell you that the cost reductions are a mirage, and will solar module prices will likely rebound as the market comes into balance.

They are in for a nasty shock. Between 2007 and 2012 it is estimated that solar manufacturing costs fell by between 70 and 80 per cent – courtesy of the feed in tariffs that began in Germany and spread elsewhere, and the manufacturing boom that followed, particularly in China

But the cost fall was not simply a matter of capacity, it was also about efficiency – more powerful modules, less silicon, less metals, improved manufacturing processes and so on. And the fall is continuing.

Last week, SunPower, the second biggest US solar PV manufacturer, said it had succeeded in reducing manufacturing costs by 20 per cent over 2013, following a similar fall a year earlier (and the year before that). And it managed to obtain an even bigger (25 per cent fall) in the balance of systems costs, the amount it costs to make and install solar modules in utility-scale solar farms.

The latest cost fall has been significant ...