Manufacturing Cost Analysis

The Clean Energy Manufacturing Analysis Center's (CEMAC's) cost analysis examines regional clean energy technology manufacturing cost trends and asks questions such as: What has led to dramatic growth in China's photovoltaic (PV) manufacturing sector, and is that growth sustainable?

CEMAC's manufacturing cost analyses show that:

• U.S. incentives to strengthen access to capital for investment in innovative solar technologies could offset China's current advantage.
• U.S. incentives are dwarfed by the scale of Chinese incentives.
• The United States is a leader in early stage technology investments that have disruptive potential.
• U.S. access to capital is a critical component to the capacity to innovate.

Cost Analysis Highlights: Comparison of China and U.S. Solar Photovoltaic Industries and Manufacturing Costs

In a study by CEMAC partners NREL and the Massachusetts Institute of Technology (MIT) published in the journal Energy & Environmental Science, researchers concluded that production scale, not lower labor costs, drives China's current advantage in manufacturing PV systems. The study shows:

• China's historical advantage in low-cost manufacturing is mainly due to advantages of production scale and offset by other country-specific factors, such as investment risk and inflation.
• Technology innovation and global supply chain development could enable increased manufacturing scale around the world, resulting in broader, subsidy-free PV deployment and the potential for manufacturing price parity in most regions.