Solar module makers need to focus on non-active materials to lower costs

luxresearchlogoBoston, Mass. — Although the solar industry’s focus has been on active semiconductor materials like silicon and cadmium telluride to reach grid parity, it’s the non-active materials — all of the other components of a solar panel — that offer big opportunities to reduce overall cost of solar modules, according to a new report from Lux Research. The market researcher estimates that these materials account for 15 to 48 percent of module manufacturing costs.

The report, “Driving Down Solar Costs: Non-active Material Opportunities,” evaluates new and incumbent non-active materials technologies such as metallization, antireflection (AR) coatings, encapsulants, and transparent conducting oxide (TCO) replacements, which can impact the cost and efficiency of today’s solar modules.

“As module prices continue to fall, solar players need new ways to lower cost and improve performance in order to stay competitive,” said Johanna Schmidtke, a Lux Research analyst, in a statement. “But new technologies need to clearly lower cost-per-watt to win,” he said.

A key finding of the report finds that as modules move to higher efficiencies so does the value proposition of large-area AR and TCO coatings. With higher efficiency, a given cost-per-square-meter translates into a lower cost-per-watt at high efficiency, according to the researcher.

The study also indicates that large players are better positioned to capitalize on bundled non-active technologies, which means diversified suppliers and large crystalline silicon (x-Si) incumbents, such as DuPont or Q-Cells, have the means to bundle multiple non-active technologies into a single platform for greater margin gains.

In addition, the study finds that thin-film modules see greater margin potential, but longer development cycles. Lux Research says non-active materials comprise 36 to 48 percent of standard thin-film module manufacturing costs, and new entrants with improved non-active technologies will have a greater edge in thin film than in x-Si. The researcher’s caveat: longer development cycles.