Economic assessment of local solar module assembly in a global market

Abstract

Summary: With increasingly competitive pricing and net-zero targets driving the growing demand for solar photovoltaics, new manufacturing supply-chain models are under consideration to increase local resilience and to ensure continuity of supply. We report a cost model that assesses the opportunity for local module assembly in a competitive global market context and extends techno-economic analysis to include important supply-chain aspects of trade and logistics costs. The initial analysis focuses on the economic viability of photovoltaic (PV) module assembly at different scales in Australia and then generalizes to include the global supply chain. The analysis shows that, with economies of scale and sufficient demand, local module assembly from imported materials can compete with the price of imported modules. Key cost drivers and their impact on profitability are discussed in the light of broader benefits and potential policy mechanisms that influence decision-making that can support investments in domestic solar module manufacturing.

Keywords

• solar photovoltaics
• PV manufacturing cost
• transportation cost
• economic optimization
• PV global supply chain
• local manufacturing