Back in 2013, GTM Research’s Shyam Mehta suggested in his base-case estimate that in 2017 the cost (which is different than price) to manufacture PV modules could fall to 36 cents per watt. This prediction was forecast after a whopping 70-cent decline over the preceding several years. Since those cost declines were driven by manufacturer margin erosion and the bursting of the polysilicon bubble, surely this couldn’t be the case, right? The 2013 GTM Research analysis was indeed met with disbelief at the time. “Many on this site and others have expressed a mixture of consternation and disbelief at how apparently low this number is,” Mehta later wrote in a Greentech Media online article in June 2013. More recently, in 2015, the International Renewable Energy Agency (IRENA) published an analysis in the “Solar and Wind Cost Reduction Potential to 2025” report with factors such as continued efficiency increase, manufacturing scale, innovation in materials and vertical integration production. IRENA estimated costs could fall to the mid-30s by 2025. Similarly, these cost projections were considered very aggressive then. As we now know, by mid-2016, module selling prices hit the 40-cent price range and continued to plummet into the low 30s by early 2017!
One can’t be too critical of the analysts: Nobody saw this coming. The truth is that, thanks to financial innovation, manufacturing scale and technological innovation, the global solar industry consistently outperforms forecasts of price and installation volumes. This is a fantastic trend that we’d all like to see continue. However, in every industry aggressively falling prices likely means growing production volumes, lower-cost raw materials, increased efficiency, less labor or increased automation, or perhaps all of the above. In an evolving manufacturing process, quality control is a moving target.
Although market fundamentals and macro trends typically favor a declining price and growth in solar installations, policy and market dynamics can cause temporary disruption. There have been periods when the PV module price in the U.S. has temporarily increased. In 2008 and 2009, polysilicon, the primary raw material in most PV modules, grew to almost $500/kg. Today, the price has settled to less than 5% of that price (roughly $20/kg). In early 2013, soon after the initial SolarWorld-driven anti-dumping and countervailing duties were implemented, module pricing ticked up. This happened again in late 2014 after the second round of that process. More recently, Suniva and SolarWorld have filed yet another trade dispute asking for a minimum module price that is twice the market price and would apply to all imports into the U.S. Unwilling to take the policy risk, many manufacturers have stopped committing to 2018 supply, resulting in a rush to buy modules now for 2018 construction. This has caused near-term undersupply, which has increased module pricing in the market. If implemented, the Suniva/SolarWorld policy would obviously be detrimental to the industry and result in, according to GTM Research, the evaporation of tens of thousands of solar jobs and gigawatts of planned installations.
Keeping a global perspective and some wishful thinking on U.S. policy, let’s plan for continued pricing declines and explore PV module technology pathways to continue to drive that.
Mono PERC, glass-glass modules, multi-busbar modules, half-cut cells, bifacial modules, high-density modules, lower-cost raw materials – research and development (R&D) in the solar industry has never been busier. With each technological advancement (even incremental) come potential benefits and potential performance risks. These risks are exacerbated in a seller’s market, as the buyer does not always have sufficient leverage to require strict due diligence. When thinking about PV module expected service life, I like to remind myself that my five-year-old son will have graduated from medical school when my PV module warranty expires. The benefits of technological innovation are clear: reduced price and potentially improved performance. As efficiency levels increase, more watts are produced from the same investment in glass, frames, shipping, land, racking, manpower, etc., thereby reducing overall cost per watt. For example, Figure 2 shows the forecast module power for Jinko Solar mono PERC (passivated emitter and rear contact) technology. Generating 390 watts from the same inputs that generated 365 watts just a few years earlier would be an amazing technological advancement.
PERC cell-based modules are growing fast in market share and are forecast to take up more than half of the market within the next decade, according to the International Technology Roadmap for Photovoltaic Results 2016 report. Adding the rear-side passivation in the cell manufacturing process can boost efficiency and reduce the cost per watt. Controlling the process in high volume production is critical. Depending on the technology, a small variability in thickness or stoichiometry of the rear-side film may disrupt the performance. High levels of LID (light induced degradation) have been reported for mono and multi PERC modules. In fact, more efficient solar modules will naturally be more sensitive to various degradation mechanisms. Just like a race car, when the cell is well tuned, any deviation from optimal will lead to a steeper degradation of performance. Maintaining quality of processing and screening for serial defects becomes critically valuable.
Glass-glass modules replace the backsheet with another piece of glass. While this adds weight, it could actually reduce the module price and potentially improve reliability. However, a backsheet is “breathable,” which means vapor can slowly pass through. This could be good or detrimental. Moisture ingress in a module can accelerate some degradation mechanisms and corrosion of cell metallization and busbars. Unlike a backsheet, a piece of glass is not breathable. Any outgassing inside of the PV module caused by encapsulant degradation, interactions between tapes, and flux or any other residue can slowly seep out of a glass-backsheet module but will be trapped inside the glass-glass sandwich, potentially resulting in bubbles and delamination. Despite these risks, most glass-glass modules on the market today come with 30-year warranties.
Like the race to offer more blades in razors, solar cell manufacturers have increased the number of busbars over time. Back in the original standards-development efforts carried out in the JPL (Jet Propulsion Labs) Block Buys in the 1970s and 1980s, PV cells were produced with one busbar and the reliability wasn’t great. This quickly evolved to two busbars, and now four or five busbars are typical. Some are now pushing the limits with more than 10 very thin busbars, which requires a different cell-to-cell interconnect process and a more sensitive manufacturing process.
It could seem a bit counterintuitive that just cutting cells in half will result in increased output. The incident light intensity and surface area of the solar cell is what defines the current, and the number of cells in series is what defines the voltage (roughly 0.6 volts per cell). The power loss due to heating in a circuit is proportional to the square of the current (power loss = current^2 *resistance). So, reduce the current flow and thereby reduce the power loss in the module. Simple! However, when cells are cut in half, the number of solder joints in a module roughly doubles. Bad solder joints are a leading cause of failures and degradation in PV modules, so one needs to be careful with adding solder joints.
Another critical consideration with all of these advanced modules is accurately modeling the energy output. PV module manufacturers sell watts under optimal conditions; power plant operators sell kilowatt-hours under a wide range of conditions. Low light performance, thermal coefficients and angle of incidence response are all impacted by these technological advancements, as well as relative degradation over time.
In addition to these few technological advancement efforts, there are many more under way in R&D labs. So, how can module buyers or power plant investors stay ahead of the curve and protect themselves in such a dynamic landscape?
In 2012, PV Evolution Labs (now DNV GL Laboratory Services) launched the Product Qualification Program (PQP) through which downstream players such as financiers, developers, EPCs and insurance companies could gain access to detailed reliability test reports and PAN files (used for energy modeling) at no cost. The PQP now supports over 180 downstream partners spanning North America, Latin America, India, Asia (China, Japan and Singapore), Europe, and Australia to help manage their approved vendor lists. Manufacturers similarly see value by accessing tens of gigawatts of annual selling potential through this program. Over 50 manufacturers across more than 300 various individual bill of materials (BOMs) have participated in the program to date, resulting in one of the largest consistent data sets of PV module reliability and performance test data. Similar programs exist for PV inverters and energy storage systems.
Recently at Intersolar Europe in Munich, DNV GL released the third edition of its PV Module Reliability Scorecard Report, which summarizes some of the findings of the testing performed in the PQP over the past year. Figure 3 shows performance degradation after PV modules were exposed to 600 thermal cycles, three times the duration called for in IEC or UL certification. Each bar represents a different product identified by its BOM. Several manufacturers demonstrate degradation that isn’t measurable, while others degrade substantially – well beyond 5%. Some even exhibit complete failure. Only Kyocera and Trina Solar have been named as top performers in the thermal cycling test for all three PV Module Reliability Scorecard reports.
Additional tests performed in the PV Module Reliability Scorecard report are damp heat for 2,000 hours, humidity freeze for 30 cycles, dynamic mechanical load testing, and potential induced degradation testing.
Although there is no truer test of a module’s reliability than real-world experience, accelerated lifetime tests are the best-known proxy to evaluate PV component quality today. Very few PV module technologies on the market are old enough to be qualified as “proven.” When they are, choosing them is generally at the cost of lower performance compared to newer module types; the power output of modules increases by about one power bin every six months.
Some developers and investors may believe that selecting their modules from the largest companies ensures quality modules. However, one of the results described in the 2017 DNV GL Module Reliability Scorecard is that this criterion is not a good proxy for quality. On average, large manufacturers make good modules, but we have also observed high degradation rates in modules manufactured by large companies. And the history of PV is full of world-leading manufacturers going bankrupt.
Similarly, other developers and investors rely on country of origin as a proxy for quality. It’s tempting to assume modules from Europe or the U.S. are “good.” Unfortunately, according to the latest data collected and published in the 2017 Scorecard, this does not provide investors with the protection from potential long-term underperformance they are seeking.
One of the best ways today to increase the probability of quality and long-term performance of components is through accelerated lifetime testing. In order to guide procurement managers, DNV GL has developed procurement best practices, described in Figure 4.
The guidelines include the following elements:
Product Qualification Program: Triggered typically at the beginning of the lifecycle of a product, the PQP, described previously, is a set of extended accelerated lifetime tests that are much tougher than what is required for module certification. For instance, the PQP calls for 800 thermal cycles, which is four times the IEC 61215 minimum duration required in some markets. This set of tests probes the BOM and the manufacturing process for capability to produce high-quality modules. DNV GL’s reliability test database allows the PQP data to be leveraged to effectively manage approved vendor lists by setting degradation thresholds (e.g., 5%, or top 20%, of the PQP or Scorecard participants).
Production oversight and statistical batch testing: Modules are produced in very large quantities, and even if a fixed BOM is built in the same factory, some variation of the quality during the manufacturing process is inevitable. Many quality deviations stem from mistakes in the manufacturing process rather than fundamental design flaws. DNV GL typically tests a pallet of modules per batch to ensure that this variability does not bring the quality below basic standard levels. Just flash testing and visual inspection are simply not sufficient to ensure that the modules sold are free from latent defects that can cause long-term underperformance.
On-site electroluminescence (EL) imaging: Even if production is performed to best-known practices, shipping and installation may be damaging for the modules delivered to a project site. EL is the technology of choice to detect microcracks in the PV modules. Microcracks can be a signature of mishandling. They may have a limited effect on maximum power at commissioning; however, research has shown that the presence of microcracks can increase the degradation rate over the years.
These guidelines are already followed by several big players in the industry, including developers, financiers and even manufacturers.
Continued technological innovation is the lifeblood of the solar industry. It will enable manufacturers to continue down the cost curve and keep beating analyst forecasts. It is amazing what manufacturers are able to accomplish at such minimal pricing levels. Buyers who do their homework in module selection and quality management are procuring and installing very reliable and highly efficient modules at cents-per-watt prices in the low to mid 30s today. As prices continue to come down, we must all continue to stay vigilant to maintain product quality.
Jenya Meydbray is the vice president of strategy and business development for DNV GL’s Laboratory Services group.
