Bloomberg has released May 2014 PV Spot Prices with current module costs (COGS), margins and sales prices. This data is extended to profile the levelized cost of energy (LCOE) for solar PV technology, and is combined with new solar efficiency data to define the LCOE roadmap for solar energy in Qatar going forward.
Solar conversion efficiency for PV research cells established new records in May with efficiency for commercial thin film (CdTe) technology on a fast track to improve 60% over the next 24 months. If the transition from research to the commercial market is realized as planned, thin film efficiency will soon surpass crystal silicon modules, yielding an LCOE below gas and nuclear generation in most markets. LCOE confirmation is provided in the table below, which is particularly striking as the simple LCOE includes all capital costs, operating costs, while ignoring subsidies, debt financing, and tax impacts.
The data profiles current prices and market share by technology, commercial cell efficiency, and the best research cell efficiencies. Key observations:
- Solar conversion efficiency, as defined under standard IEC test conditions, is adjusted for Qatar’s average annual temperature profile. LCOE production estimates use average annual irradiance from three sources.
- Single crystal modules have the highest efficiency and the lowest LCOE, remaining the best option for immediate cash and carry transactions.
- The most efficient multi crystal modules compete with with single crystal panels, but struggle to achieve grid parity in many markets absent support mechanisms and financial structuring
- Thin film modules have the lowest efficiency and the highest LCOE of the modules profiled. However, recent records for research cells have conversion efficiencies on par with high efficiency single crystal modules.
- A review of stock market guidance supplied by thin film manufacturers asserts that thin film conversion efficiencies will equal multi crystal performance by 2015 and exceed 21% by 2017. A new cost estimate for thin film modules released by First Solar in March 2014 targets $0.40/W by 2018, a decline in excess of 30%.
- Solar companies are in the habit of providing ambitious guidance, but there’s good reason to be optimistic. NREL performance validations are objective, companies are already releasing new assembly line schedules to trigger order uptake, and stock market valuations of thin film companies are up 21% year-to-date.
- The new efficiency numbers confirm that technology innovation in RE is sure to disrupt utility business plans, to transform the future generation mix of the power industry, and to impact power sector coal and gas demand.
- The new outlook may also delay or redirect generation CapEx spending, regardless of technology, given significantly improved performance and economics for PV technology in the near-term.