The economics of photovoltaic device technologies

There are a number of PV device technologies, loosely categorized as crystalline silicon, thin films, and concentrators, each designed to reach low cost goals. Two decades ago, PV-generated electricity prices were in the range of one or more dollars per kilowatt-hour. Today, in excellent sunlight, the lowest cost systems produce electricity at barely over 10 c/kWh, and systems the size of Hoover Dam (in terms of output) are being planned (e.g., in China). Most cost reduction has occurred because of technical improvements in PV devices, through improved efficiency of converting sunlight to electricity; cost reductions in manufacturing; and extensions of device operating lifetimes to over thirty years. These trends continue and form the heart of expected progress to even lower costs. However, in addition, necessary improvement is also occurring in other hardware and labor associated with installed PV systems, and in non-hardware costs (e.g., overhead) associated with market size and aggregation. Finally, permitting and financing fees also tangibly impact PV economics. We will examine the key aspects of PV cost reduction by PV device technology to construct a satisfactory understanding of present and future PV cost reduction. Then we will extend this understanding to see how PV fits among the various no- and low-carbon strategies for climate change relief and energy diversity.