Solar energy is the most abundant, useful, efficient, and environmentally friendly source of renewable energy. In addition, in recent years, the capacity of photovoltaic electricity generation systems has increased exponentially throughout the world given an increase in the economic viability and reliability of photovoltaic systems. Moreover, many studies state that photovoltaic power systems will play a key role in electricity generation in the future. When first produced, photovoltaic systems had short lifetimes. Currently, through development, the technology lifecycle of photovoltaic systems has increased to 20–25 years. Studies showed that photovoltaic systems would be broadly used in the future, a conclusion reached by considering the rapidly decreasing cost of photovoltaic systems. Because price analysis is very important for energy marketing, in this study, a review of the cost potential factors on photovoltaic panels is realized and the expected cost potential of photovoltaic systems is examined considering numerous studies.
Similar to other essential needs, such as food and shelter, energy is a basic need of individuals throughout the world. The global increase in energy demand and environmental pollution is motivating related research and technological investments to improve energy efficiency and generation. The main objective of replacing a major portion of the fossil fuel use can be achieved using renewable energy. This possibility has led investigators to research on renewable energy resources and energy efficiency for the present consumption of energy, because renewable energy technology transforms natural phenomena into beneficial types of energy. Among renewable energy resources, solar power is the most beneficial, limitless, effective, and dependable. Above all, solar power is ecologically friendly.
Energy is regarded as indispensable to the socioeconomic progress of developing and developed nations. However, maladministration of power generation has a detrimental effect on the ecosystem. Recently, concerns related to the environment, such as global warming, have been increasing throughout the world. The consumption of world energy resources and the excessive emission of dangerous greenhouse gases have become a serious problem that has a material effect on climate change—an important subject discussed around the world. One of the main causes of climate change is the extreme amount of global greenhouse gas emissions (e.g., carbon dioxide and methane) into the atmosphere as a consequence of activities performed by humans. Human activities primarily cause significant CO2 discharge. In 2002, universal CO2 discharge related to human activities reached 2.6 billion tonnes. This discharge is estimated to reach 4.2 billion tonnes annually in 2030. In addition, unless prevented, the surface temperature of the earth might reach 1.4°C–5.8°C in the future. Given these developments, we may face droughts, floods, a rising sea level, glacial melting, and critical spoilage of agriculture. Therefore, it is essential to reduce these emissions as soon as possible. To realize such a reduction, conventional energy applications must be turned into renewable energy technologies [
Solar power is certainly favourable in terms of the environment. When compared with other energy types such as coal and oil, the sun is considered a satisfactory energy resource because it is reliable and clean. Because the sunshine needed to meet our energy requirement in the future is sufficient, many scientists are highlighting the significance of solar power. Sunlight is considered an alternative energy source, as are hydrogen and wind. Solar power has the capacity to transform ecologically friendly energy into a more elastic, common, and cheaper energy resource. Therefore, currently, solar power is frequently used in many applications such as water heating systems, satellite power systems, and electrical power generation.
As is known, the best-known renewable energy technology is the photovoltaic (PV) system. To produce electrical energy, these PV systems use sunlight. PV electricity generation systems appear quite attractive for electricity generation given low carbon dioxide emission during simple and noiseless operations, flexibility in scale, and easy maintenance compared to other sustainable energy sources. To accelerate the extension of renewable energies and PV in particular, environmental profits and the prevention of fossil fuel spoilage underlying the relevant price imbalance are essential. Therefore, renewable energies significantly contribute to supply security. In addition, photovoltaic systems can be applied to small or large applications without restriction. These systems have been installed on individual homes, housing developments, and public and industrial buildings and generate energy around the world. Existing solar cell technologies are solidly installed and provide safe products with the efficiency and energy that can last for 25 years. Increasing power failure potential and an increase in electricity prices advertise PV systems [
The available solar irradiation required to meet the world’s energy requirements is more than adequate. Current technology enables the sunlight irradiating on a square metre to have the capacity to produce an average of 1,700 kWh of energy annually. When the overall energy consumption is considered, the solar power reaching the earth’s surface has the capacity to satisfy the present energy requirement more than 10,000 times. More sunlight can produce more energy. Solar energy is best produced in subtropical areas. Europe produces an average of 1,200 kWh/m2 of energy annually, whereas the Middle East produces 1,800 to 2,300 kWh/m2 annually [
Depending on connection methods and working principles, PV-based electricity generation systems may be classified as stand-alone or grid-connected PV systems. PV panels are integrated with equipment such as batteries, charge controllers, and inverters to generate electricity. The majority of the PV modules were used in independent applications in areas with no network connections [
In 2014, more than 100 nations enhanced their solar PV capacity, which also made PV the world’s fastest-growing power generation technology. In 2014, the enhanced capacity of PV was approximately 139 GW. Figure
Solar PV, existing world PV capacity, 2004–2014 [
PV systems have higher capital costs per unit and much lower operating costs than traditional fossil-based electrical resources [
PV panels generate electricity when integrated with other system equipment, which can be described as a balance of the system. These systems operate on or off the grid and can be used where electricity is required. Numerous PV system applications exist throughout the world such as communications, remote monitoring, hotels, hospitals, houses, lighting, water pumping, and rural areas. In general, the key parts of a PV energy generation system are as follows [ PV panels to absorb sunlight. An inverter to turn direct current (DC) into alternative current (AC). A set of batteries for off-grid-connected PV systems. A charge controller between the PV panel and batteries. Support structures to direct PV modules towards the sun (to enhance the efficiency of PV electricity production systems).
In recent years, PV systems have developed rapidly and researchers have focused on reducing the cost of these systems to enhance their efficiency.
R&D studies currently conducted have enabled the development of production methods for PV module technologies. Therefore, PV panels can be manufactured at lower costs and can generate energy at a higher efficiency. Production costs per watt are reduced every day [
Production chain with cost shares and technology improvement opportunity units for [
Supply chain | Cost share | Factors |
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Ingot (silicon) | 17% | Ingot casting |
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Wafer | 20% | Kerf loss |
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Cell | 22% | Cell efficiency |
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Module | 41% | Module |
Developing PV technology status and prospects [
Through the adoption of a low-cost labour force and mass production methods in PV panel systems, costs have significantly reduced in the last 50 years. However, simply reducing production costs is not enough. Achieving an increase in efficiency is also an important parameter [
Approximately, 85%–90% of the PV market is represented by single and multicrystalline silicon cells. Ten to fifteen percent of the PV market is represented by various thin-film PV panels that also have different categories. Crystalline silicon cells are expensive and thin-film cells are less expensive and less efficient [
Moreover, preferred PV panels depend on a cost analysis of the installation of PV systems because the lifecycle of these systems is a very important issue. PV systems with long lifecycles are preferred. Examining module prices according to PV panel technology enables an understanding of why silicon technology is preferred. Figure
Efficiency and price development for different PV module technologies in 2010 [
Module efficiency varies between 10% for thin-film cells and 20% for single crystalline cells. Moreover, because efficiency significantly affects cost, it is essential in determining module prices. Greater efficiencies provide higher energy output for each square metre. In Figure
Estimated price development for different PV technologies [
In Figure
Photovoltaic industry learning curve cost per watt [
In a 20-year period, many industries proved that making significant cost reductions is possible by increasing volumes [
Learning curve for photovoltaic panel price development with 22% learning rate [
Material charges covered by PV systems correspond to 50% to 70% of the overall cost of the technology. In addition, cost reductions are significantly affected by location, and the reduction in material consumption and the increase in conversion efficiency might affect material prices per watt. Figure
Cost reduction—material consumption for different photovoltaic panel technologies [
Today, PV technology meets the demand for any power amount—from a few watts to the MW level. The superiority of PV-based production enables the manufacture of PV modules from various mines, thus the maintenance of energy generation [
Annual PV production capacities of thin-film and crystalline silicon-based solar modules [
Although PV installation capacity is increasing, the cost of PV panels has decreased. PV installation capacity is also associated with cost reductions, because when installation capacity is increased, technological improvements and scale economies increase for generation of PV panels. In addition, the PV panel manufacturing process is examined to determine the cost reduction potential of PV panels. Figures
Crystalline Si cell standard chain: bulk of photovoltaics today [
Sharing the cost of processing photovoltaic modules [
The c-Si PV module was adopted because the c-Si share of the PV market is approximately 70% to 80%, and the module has broad application globally. A current cost analysis of PV systems shows that the cost of the PV module is approximately $1.75–$1.41. In addition, developing technology and the increased capacity of PV electricity generation show that PV system prices will decrease until 2020. The expected cost of the PV module is approximately $0.85–$0.73. This target PV module cost is very important given the need for electricity generation throughout the world and the broad use of low-cost PV modules.
In addition, researchers studied numerous cost reduction techniques to improve cost potential. The cost reduction potential techniques for c-Si module technology are noted as follows.
Si shortage influences technology choices: Accelerated trend towards thinner wafers (more wafers per kg Si): >150–200. Trend towards larger wafers slowing down, with 156 mm seeming as the standard for several years ahead. Interest in alternative ways to use PV grade silicon more effectively.
More interest in high-efficiency solar cell technology: More Wp per kg Si. Reduction in system costs for applications requiring high installation costs per m2 [
Needed for €/Wp reduction: Reduction in materials usage. Simplification of module manufacturing process. Improving cell and module efficiency.
To increase the use of PV modules in the future, minimizing production costs is essential [
The c-Si PV module is obtained from the share of c-Si in the PV market, which is 70% to 80%, and the module is commonly used globally. A current cost analysis of PV systems shows that the cost of a PV module is approximately $1.41–$1.75. In addition, developing technology and increased capacity of PV electricity generation show that PV system prices have decreased until 2015, when the cost of a PV module is expected to be approximately $0.85 to $0.73. This target PV module cost is very important because of the need for electricity generation throughout the world, and low-cost PV modules will become commonly used. Table
Crystalline Si: estimated total module cost [
EUR/US/JP | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
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Scale increase over time | 150 | 400 | 650 | 900 | 1150 | 1400 |
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Low cost | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
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Scale increase over time | 350 | 600 | 850 | 1100 | 1350 | 1600 |
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Reduction in photovoltaic system prices [
The PV industry is constantly developing to improve product efficiency and to make use of more environmentally friendly materials because the equipment is an important parameter for the cost efficiency of PV systems. PV systems have two parameters: the cost of a PV panel and the balance of the system.
Certain factors affect the reduction in the cost of PV systems. Technological innovation, production optimization, economies of scale, increased performance ratio of PVs, and the extended lifetime of PV systems can be known as the lifecycle development of standards and specifications [
Price structure of photovoltaic systems for installations [
When PV systems are evaluated against each other, Table
Pathways of cost reduction potential for photovoltaic systems [
Characteristic | Value or qualifier |
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Module | |
Efficiency | >25% |
Substrate | Lower cost and weight than glass |
Reliability | 30 years or can be replaced with minimum labour |
Materials | Earth-abundant, nontoxic, or established or recycling plan |
BOS/installation | |
Labour | Can be done with nonspecialized labour |
Process | Lightweight (ease of handling, no special equipment) |
Assembly | Snap together mechanical and electrical |
Power electronics | |
Efficiency | >95%, improved module-peak power management |
Reliability | 30 years |
Assembly | Integration of wiring, components to minimize electrical connections |
BOS cost saving potential in €/kWp for c-Si and TF modules [
c-Si (€/kWp 250) is less cost efficient than TF (€/kWp 650) regarding BOS. The reasons for this phenomenon are that cost saving measures support TF systems because they generally have a higher BOS cost percentage and because an expectation exists that a significant increase in TF efficiency will occur despite the fact that c-Si systems include 1,000 V DC and have the capacity to use MWp inverters. Another point to be considered is that, in the past 15 years, numerous efforts were made to enhance BOS components in accordance with c-Si module requirements [
Managing the reduction in these costs by decreasing panel costs as much as BOS costs is possible. Because they are less efficient and have lower system working voltage, BOS costs are higher for TF plants. In particular, when compared with TF plants, crystalline plants are less expensive regarding the auxiliary structure, DC cabling, and inverters. The reference to DC cabling means that the increase in panel efficiency that is expected to occur requires fewer cables for gross power. Using higher system working voltages means using more panels in each row and a decrease in the amount of field boxes required to observe these rows. Prefabricated DC cables are also cost efficient. Panel packing, installation process, project management, and standardized blocks of panels are also cost efficient [
DC power can be converted to AC power by inverters. This conversion makes the electricity distribution network and the best-known electrical devices compatible with the system. Inverters include power classes that vary from a few hundred watts to several kW and sometimes up to 2000 kW central inverters for larger systems [
The inverters are a significant development point. The DC–AC inverters, which contribute to 10% of the system costs, provide the opportunity for significant discoveries in engineering design. For the utility scale PV systems, inverters are produced at larger capacities. Whereas these latest units facilitate system design and installation and support increases in energy efficiency, they are still not used frequently [
To preserve the electric power produced from sunlight, batteries are primarily used in independent PV systems [
The most frequently used batteries are deep-cycle lead-acid ones. These flooded or valve-regulated batteries can be found in different sizes. When compared with valve-regulated batteries, flooded batteries require more maintenance and last longer when used properly [
PV electricity prices are compared with other electricity production sources using cost per kilowatt hour (kWh). In 2010, electricity production costs for large systems varied: €0.29/kWh in northern Europe, €0.15/kWh in the south, and €0.12/kWh in the Middle East [
In Europe and the United States, the summer season is always a key period in the year, and this peak can often be exacerbated when it coincides with country or local subsidy programmes change as consumers seek to beat those reductions. In particular, in this period, the demand from Germany and Italy affects prices throughout the world. Module costs correspond to 50% to 60% of the cost of a completely installed solar energy system [
Cost reduction brings about improvements in module and system efficiency. Efficiency improvements decreased the cost of PV modules, BOS, and fixed systems. For instance, when the efficiency of the modules doubled, the energy generated increases twofold; thus, BOS cost also decreased [
The key cost reduction points related to electricity generation from PV systems are as follows [ Higher efficiency of energy conversion. Less consumption of materials. Cost efficient materials. Optimized manufacturing and mass production. Optimized PV module technologies. Optimized grid integration (smart grids). New concepts of PV electricity energy conversion.
Research and developments indicated that PV system prices will decline in the near future, even as the ratio of PV system use will increase exponentially. In addition, PV industry researchers determined a variety of pathways given the aim of the cost reduction potential for PV systems.
PV system components are indicated and are separately examined. Table
The minimum efficiency of the PV module should be 25% and its lifetime should be 30 years. To reduce costs, material production costs per watt in today’s conditions should be reduced from 50 cents to 23 cents using the latest technology instead of conventional methods, and labour costs should be reduced from 10 cents to 6 cents [
Today, the main agenda of the world’s countries is energy. The price analysis factor is very important for electricity energy generation because energy generation costs are increasing throughout the world [
High costs and low efficiency limit electricity production from solar energy. However, developments in the PV sector indicate that costs will decline in the near future. Therefore, low-cost and more efficient PV modules are envisaged as being manufactured for the PV sector each passing day.
Although the installation costs of PV systems are fairly high, these systems have many advantages. The major problem is that PV panels have low electricity generation conversion efficiency. To be broadly used, the electricity generation system should be economical and feasible. Systems with the highest capacity for electricity generation require maximum sunlight. Moreover, factors such as panel technology, the environment, and selection of material, among others, influence the operation and efficiency of PV-based electricity production systems.
Fifty years ago, in the beginning days of PV panels, the energy needed to produce a PV panel was more than the energy that the panel could produce in its lifetime. In the last 10 years, payback periods were reduced to 3–5 years through improvements in the efficiency of the panels and production methods based on the sunshine available at the installation area. Today, the peak cost of PV panel systems is approximately €1.34 per watt.
In many countries, PV systems markets have yet to reach maturity. However, in Germany, today’s system prices represent the lowest rational prices that can be reached in other parts of the world. In 2010, the average price for PV systems was €2.80/Wp. Until the middle of 2010, prices were a minimum €2.20/Wp for large floor-mounted systems in some nations. Prices are reduced in accordance with production volume [
When we assess the existing situation, PV systems installed on a turnkey basis in major markets include the same manufacturing costs but prices differ from nation to nation [
PV panel efficiency, correct product selection, ensuring the balance of the system equipment, and accurate predictions of electricity generation are essential for gaining reliable knowledge of PV systems. Therefore, the feasible work is very important to installing PV systems. In addition, the location of the installation of a PV system is important because of the solar irradiance that directly affects the capacity of electricity generation from PV panels.
Ten years ago, when a few MW of energy was needed to be produced annually, 16 cell and module production facilities survived because they produced sufficient solar modules. Today, market leaders own facilities that have capacities higher than 1 GW, several hundred times that of 10 years ago. Along with technological changes and production optimization, increases in capacity have decreased the cost per unit. Doubling of production output decreases the cost per unit by approximately 22% [
In the last 10 years, growth in the PV market has been unprecedented. In 2010, capacity increased to 16.6 GW from 7.2 GW in 2009. Despite difficult financial conditions, the EU enhanced its 1 GW capacity in 2003 to 13 GW in 2010 and, today, continues to rapidly increase its PV capacity. Germany is the lead in the PV sector, with the United States and China also continuing their investments to ensure a stronger influence in this sector. In Figure
Annual installed capacity of photovoltaic electricity generation throughout the world [
In the last 30 years, significant price reductions occurred in the PV industry. The cost of PV modules declined by 22% each time the cumulative installed capacity (in MW) increased twofold. Reductions in PV modules and systems prices also decreased power generation costs, caused by broad innovation, research and development, and continuing political support for the development of the PV market [
Yet, costs—for panels, inverters, mounting systems, and other components—are the same in each market. However, system prices seem to depend largely on anticipated rates of return; thus, the stronger the incentives, the higher the prices.
Energy generation costs are known to be very important for all countries and their efforts to ensure low-cost energy generation. Solar energy is an indispensable source of energy generation, and the most important parameter is the cost of the generated energy.
Solar energy is the most abundant, useful, efficient, environmentally friendly, and unlimited type of energy among all renewable energy sources. In addition, in recent years, the capacity of electricity generation systems from solar energy increased rapidly throughout the world given an increase in the economic viability and reliability of PV systems.
In this study, the cost of PV systems is examined and investigated in detail. Current costs are obtained and a discussion on the advantages or disadvantages of PV systems is included. The capacity of PV electricity generation systems throughout the world is considered separately and this study is extended to address expected future developments.
Enhanced efficiency of installations results from experience, scale, and learning. The general opinion is that automatic tools and higher preassembly levels caused by economies of scale and standardization also reduce installation costs. Predictions suggest that these strategies might save approximately 30% in work time and costs. “Plug and play” installations, which reduce the need for specialized labour, might become possible for inverters.
Moreover, this paper presents certain crucial techniques that contain the cost reduction potential of PV systems. First, current manufacturing costs of PV modules are examined in detail. Second, future PV module costs are predicted regarding developed techniques and technology.
The c-Si PV module is obtained from c-Si and it has obtained an approximate 70% to 80% share of the PV market and broad applications throughout the world. An analysis of the current cost of PV systems indicates that PV modules cost approximately $1.75–$1.41. In addition, developing technology and the increasing capacity of PV electricity generation indicate that PV systems prices are expected to decrease until 2020, for which the expected cost of a PV module is approximately $0.85–$0.73. This target PV module cost is very important given the need for electricity generation throughout the world and the broad use of low-cost PV modules.
Ultimately, the primary factor in determining system prices seems to be the amount of profit available for PV system operators in each market. The larger the returns from feed-in tariffs and other incentives such as tax breaks and subsidies, the higher the system prices.
The authors declare that there is no conflict of interests regarding the publication of this paper.