In a few weeks Germany is going to drop their Feed-in Tariff rate from 39.14 cents/kWh down to 32.88 cents/kWh. *CORRECTION (JULY 27TH) 34.05 CENTS/KWH. As a direct consequence of this rate reduction we should see a drop in the average price of PV systems from 2900 Euro/kWp down to around 2450 Euro/kWp during Q3 and Q4. *CORRECTION (JULY 27TH): AFTER REVIEWING IRR DATA IT LOOKS LIKE PRICES WILL STAY RELATIVELY STABLE IN Q3 & Q4. PERHAPS FALLING TO THE 2700 TO 2800 BUT EVEN THIS IS IFFY. On January 1st 2011 the Feed-in Tariff rate will drop from 32.88 cents down to around 28 cents/kWh. This should lead to the price of PV systems dropping from 2450 down to around 2200/kWp during 2011. **CORRECTION (JULY 27TH): I'M GUESSING FOR PRICES TO GO TO AROUND 2500 IN Q1/Q2 OF 2011 AND STAY RELATIVELY STABLE THROUGH THE YEAR. I'M DOUBLE DOG-DARE GUESSING FOR PRICES OF 2100 TO 2200 IN 2012.
I might be a tad off with my price projections but the overall point is that the FiT reduction will lead to a drop in system prices. If my math is right, Germany should hit grid parity at an installed cost (pre-tax) of around 2200 Euro/kWp. So, from my perspective it appears as though this price point will be hit sometime next year. *CORRECTION (JULY 27TH) SOMETIME IN 2012 SEEMS MORE LIKELY NOW. NOTE: GRID PARITY DOES NOT CREATE A SUSTAINABLE MARKET.
That's interesting in an of itself but in the back my mind I keep thinking that if Germany can reach 2200 Euro/kWp, a similar location with access to the same basic capital & labor ingredients should be able to match these installed costs - maybe not tomorrow or the next day but within the next 5 years. I think this is a reasonable assumption. But then I think - California gets 1200 to 1400 kWh per kWp compared to Germany where you get 800 to 900 kWh per kWp. Your LEC in California is going to be 30% lower!
Showing posts with label levelized electricity cost. Show all posts
Showing posts with label levelized electricity cost. Show all posts
Tuesday, June 15, 2010
Wednesday, March 17, 2010
Learning Curves, Levelized Costs and lots of Rambling
An important tool in the study of photovoltaics is the Learning Curve (AKA: Experience Curve). See Gregory Nemet's excellent work (1,2) for a primer on the subject. I've built an excel based learning curve simulator that can be downloaded here.
If you want to guesstimate the future cost of photoelectrics, a learning curve analysis is a good start. If you want to translate the future costs of photoelectrics into the future costs of photoelectricity then use the output of the learning curve calculator as an input into the levelized electricity cost calculator. The result is what's known in professional circles as a scientific wildass guess (SWAG) - on the street it's known as mathematical masturbation.
Current Production Costs
The current best of breed PV companies can produce crystalline photoelectric panels for $1.30/Watt. These costs are broken up into two parts: silicon costs (i.e. polysilicon cost) and non-silicon costs (i.e. wafer, cell and module processing costs).* Silicon and Non-silicon costs are around 70 and 60 cents/watt respectively (March 2010). These costs can be further broken down into...
Polysilicon
Crystalline PV panels are made from polysilicon. Polysilicon is the same material used to make computer chips. In fact, scrap polysilicon from the computer industry has been the primary feedstock supply to the PV industry until relatively recently.
The expansion of the PV industry throughout the 1990s led many observers to note that the supply of scrap poly was going to run short of demand in the early part of the millennium - this is exactly what happened. The same observers noted that the supply crunch was going to lead to higher silicon prices but most everyone underestimated how high the prices would go. Why did they guess low? Short answer: the success of Germany's Feed-in tariff.
Anyways, the silicon crunch led to extremely high silicon prices and a commiserate boom in new polysilicon refining capacity. As a result the current polysilicon environment is one of glut and falling prices. The guessing game we currently face is figuring out how far and how fast polysilicon prices are going to come down. Further down the rabbit hole we go...
There are two types of refineries used to make polysilicon. Siemens process based refineries and Fluidized Bed Reactor (FBR) type refineries. The historical cost of production for Siemens refineries is around $25 to $30/kg while FBR plants have production costs a smidge under $20/kg. This begs the question, why isn't everyone building FBR plants? My gut feeling is that expanding Siemens based silicon production over the last few years was the quickest means to an end. FBR, while superior from a costs standpoint, was new and therefore riskier from a deployment standpoint.
So... My guess for polysilicon. Contract poly prices are going to come down to $30/kg in the next few years and approach $20/kg within 10 years. Fluidized bed reactors should start to dominate new refining plant construction in the medium term.
Wafer Processing Costs
Best of breed (Renesola, LDK) wafer processing costs are currently a little over 30 cents/Watt. These costs are expected to come down to 25 cents/Watt in the near term based on increased scale and improved manufacturing.
*The exact definitions of silicon and non-silicon costs vary by manufacturer. For example, Yingli and Trina define the terms as I have above. Suntech on the other hand includes wafer processing costs in their definition of silicon costs.
If you want to guesstimate the future cost of photoelectrics, a learning curve analysis is a good start. If you want to translate the future costs of photoelectrics into the future costs of photoelectricity then use the output of the learning curve calculator as an input into the levelized electricity cost calculator. The result is what's known in professional circles as a scientific wildass guess (SWAG) - on the street it's known as mathematical masturbation.
Current Production Costs
The current best of breed PV companies can produce crystalline photoelectric panels for $1.30/Watt. These costs are broken up into two parts: silicon costs (i.e. polysilicon cost) and non-silicon costs (i.e. wafer, cell and module processing costs).* Silicon and Non-silicon costs are around 70 and 60 cents/watt respectively (March 2010). These costs can be further broken down into...
Polysilicon
Crystalline PV panels are made from polysilicon. Polysilicon is the same material used to make computer chips. In fact, scrap polysilicon from the computer industry has been the primary feedstock supply to the PV industry until relatively recently.
The expansion of the PV industry throughout the 1990s led many observers to note that the supply of scrap poly was going to run short of demand in the early part of the millennium - this is exactly what happened. The same observers noted that the supply crunch was going to lead to higher silicon prices but most everyone underestimated how high the prices would go. Why did they guess low? Short answer: the success of Germany's Feed-in tariff.
Anyways, the silicon crunch led to extremely high silicon prices and a commiserate boom in new polysilicon refining capacity. As a result the current polysilicon environment is one of glut and falling prices. The guessing game we currently face is figuring out how far and how fast polysilicon prices are going to come down. Further down the rabbit hole we go...
There are two types of refineries used to make polysilicon. Siemens process based refineries and Fluidized Bed Reactor (FBR) type refineries. The historical cost of production for Siemens refineries is around $25 to $30/kg while FBR plants have production costs a smidge under $20/kg. This begs the question, why isn't everyone building FBR plants? My gut feeling is that expanding Siemens based silicon production over the last few years was the quickest means to an end. FBR, while superior from a costs standpoint, was new and therefore riskier from a deployment standpoint.
So... My guess for polysilicon. Contract poly prices are going to come down to $30/kg in the next few years and approach $20/kg within 10 years. Fluidized bed reactors should start to dominate new refining plant construction in the medium term.
Wafer Processing Costs
Best of breed (Renesola, LDK) wafer processing costs are currently a little over 30 cents/Watt. These costs are expected to come down to 25 cents/Watt in the near term based on increased scale and improved manufacturing.
*The exact definitions of silicon and non-silicon costs vary by manufacturer. For example, Yingli and Trina define the terms as I have above. Suntech on the other hand includes wafer processing costs in their definition of silicon costs.
Subscribe to:
Posts (Atom)