Vietnam currently offers the lowest solar module manufacturing costs, comparable to China, with further cost reductions expected by 2030, according to IRENA
Electricity consumption and silver use are major cost drivers in solar PV manufacturing, but both are projected to decline significantly in the coming years
Module production costs can fall sharply when manufacturers import lower-cost components such as solar cells or wafers instead of producing everything domestically
While low-priced Chinese solar imports have accelerated global deployment, they are putting financial pressure on manufacturers, prompting calls for a balanced approach
Even as China continues to be the market leader with the lowest-cost solar PV manufacturing supply chain, it is Vietnam that offers the lowest manufacturing costs ex-China – even comparable to the Asian giant – says the International Renewable Energy Agency (IRENA) in a new report.
The total module production cost for a TOPCon module produced in Vietnam was $0.180/W in 2025. By 2030, it is likely to further come down to $0.171/W. In comparison, India’s all-domestic total module production cost is currently $0.191/W, while Australia and Germany produce the same at $0.256/W and $0.284/W, respectively.
Backed by favorable government policies and its lower-cost labor and electricity tariffs, Vietnam outperforms India. It is one of the few Asian countries with a full-fledged PV supply chain. Compared with its Asian counterparts, Australia’s manufacturing costs are higher due to higher electricity, labor, building, and facilities costs.
Germany has the highest manufacturing costs, for which IRENA lists high electricity rates, elevated labor and construction costs, along with smaller economies of scale as reasons.
In its Solar PV Supply Chain Cost Tool Methodology, results and analysis report, IRENA lists electricity consumption as one of the major cost drivers for the solar PV supply chain. However, it projects this to come down significantly between 2025 and 2030, by 6% each for polysilicon and wafer and ingot production, by 25% for solar cells, and by 20% for modules.
Silver consumption too will decline by 25% over the period, according to IRENA analysis. The signs are already there (see Silver Substitution Efforts To Lower Demand In Solar Sector In 2026). On the other hand, the authors of the report expect solar cell efficiency as well as the power output to improve.
The report also highlights that solar module production costs decline when using imported components from lower-cost markets, especially solar cells, according to the open-source Excel-based tool developed by IRENA, which also offers cost projections till 2030.
In Vietnam, for instance, the total module production cost of $0.180/W comes down by 31% to $0.124/W when using imported solar cells. There is a 19% cost reduction to $0.146/W if China-produced wafers are used.
Analysts assert that the overall module price is highly dependent on the stage at which components are imported versus domestically manufactured.
While Chinese solar imports at competitive prices have contributed to global solar uptake, IRENA notes that these prices are so low that many manufacturers cannot cover their production costs. They are losing money as their financial data shows. This is eventually creating stress across the supply chain.
It calls for a balance between solar’s affordability and the sustainability of manufacturing operations. “Without some corrective action, there is a risk of deepening market distortions within the solar industry,” caution the report writers.
The recommendations include government intervention to reduce electricity costs for the industry by offering preferential tariffs, encouraging captive consumption, and supporting low-cost energy through power purchase agreements. There must be clear national quality standards and a certified manufacturer list, something on the lines of India’s Production Linked Incentive (PLI) scheme, which will make these projects more bankable while promoting exports.
“Countries can adopt hybrid strategies that combine importing of key upstream components (such as wafers or cells) with a focus on domestic assembly and module manufacturing. This approach helps balance cost competitiveness, job creation and ensure some level of security, especially where full domestic production remains uncompetitive,” reads the report.
IRENA says its analysis can be used as guidance for regional industry investment and policy development as the world goes about diversifying the PV supply chain. The complete report is available on IRENA’s website for free download.