ETIP PV Updates Whitepaper On European PV Manufacturing

• ETIP PV looks at the industrial policy developments for PV in the EU between May 2023 and December 2023 
• It recommends policymakers to also bring in dedicated tools for OpEx support to local industry along with CapEx 
• The industry needs to build resilience and be ready to ride the upcoming wave of innovative technologies 

The European solar PV manufacturing industry continues to suffer from a lack of consistent defined pathway for investors with fragmented support at the national level and complex application procedures despite high-level political support. 

This is an observation of the European Technology and Innovation Platform for Photovoltaics (ETIP PV) in its update of the whitepaper on industrial policy developments for PV in the May 2023 to December 2023 period. 

A follow up of ETIP's May 2023 white paper, the latest edition attempts to explore building resilience for the European PV value chain and the role of innovation to capitalize on the European research and innovation expertise in this space. 

During this time frame, there has been a swift adoption of TOPCon solar technology along with a renewed focus on innovative technologies such as perovskite. 

ETIP PV analysts believe the total production cost or the cost of ownership (CoO) for a representative 10 GW integrated PV manufacturing factory varies significantly. In the case of TOPCon solar modules in China, the production cost ranges between $0.160/W and $0.189/W. For India, it is slightly higher at $0.195/W. In comparison, the EU can produce these within $0.243/W to $0.300/W and the US for $0.281/W. 

The lowest production cost for heterojunction (HJT) modules in China is $0.173/W, compared to $0.209/W in India, $0.250/W in the EU and $0.290/W in the US. For tunnel back contact (TBC) as well, China's total production cost is a low of $0.162/W vis-à-vis the rest. 

"For different PV technologies, we see that there is little difference in the cost of ownership from one technology to another (up to 8.4% between HJT and PERC), and can largely be explained by different raw material requirements, notably silver, and different cell production processes for innovative technologies," reads the whitepaper. 

Factors that are at work in this cost variation relate to material costs, labor costs, building depreciation costs, equipment costs, building costs, and the like where China scores over EU and the rest of the world. For instance, building costs for a manufacturing plant are around 2 times higher in western markets than in China. Similarly, equipment CapEx can be 40% more for western equipment including the imposed import duties. 

ETIP PV also points out that newer, higher efficiency technologies have a larger potential for cost-reduction through the introduction of new processes & materials, and further efficiency gains, on the medium term. 

While calling the current focus of support policies in Europe on CapEx as important, analysts recommend adding dedicated OpEx tools to consolidate the European PV industrial supply chain. 

The whitepaper also points to the fast-evolving solar PV technology cycle that can move a highly innovative and high-cost application to a market baseline within as little as 5 years, making way for newer technologies. 

In the European context, it says, "In Europe, this is the order of magnitude of the time needed to construct a new production facility for PV in the GW scale, which means that new investments are at risk of not being able to compete on performance soon after starting operations." 

ETIP PV adds, "A crucial challenge of the current industrial policy is to ensure the European PV sector will be able to ride the upcoming wave of innovative technologies, most notably with the emergence of new processes for emerging materials such as perovskites." 

The complete ETIP PV whitepaper titled PV Manufacturing in Europe: Ensuring resilience through industrial policy is available on its website. 

European Commission funded industry platform ETIP PV identified cost of energy as chief threat to the EU's local manufacturing cost competitiveness (see Raise Investments For EU PV Manufacturing).