The Capital Intensity of Photovoltaics Manufacturing: Barrier to Scale and Opportunity for Innovation

Michael Woodhouse, Ran Fu, Kelsey Horowitz, Paul Basore, Douglas Powell, Tonio Buonassisi

Research output: Contribution to journalArticlepeer-review

130 Scopus Citations


Using a bottom-up cost model, we assess the impact of initial factory capital expenditure (capex) on photovoltaic (PV) module minimum sustainable price (MSP) and industry-wide trends. We find capex to have two important impacts on PV manufacturing. First, capex strongly influences the per-unit MSP of a c-Si module: we calculate that the capex-related elements sum to 22% of MSP for an integrated wafer, cell, and module manufacturer. This fraction provides a significant opportunity to reduce MSP toward the U.S. DOE SunShot module price target through capex innovation. Second, a combination of high capex and low margins leads to a poor financial rate of return, which limits the growth rate of PV module manufacturing capacity. We quantify the capex of Czochralski-based crystalline silicon (c-Si) PV manufacturing, summing to 0.68 $/WaCap ($ per annual production capacity in watts, $year/W) from wafer to module and 1.01 $/WaCap from polysilicon to module. At a sustainable operating margin determined by the MSP methodology for our bottom-up scenario, we calculate the sustainable growth rate of PV manufacturing capacity to be ∼19% annually-below the historical trend of ∼50% annually. We conclude with a discussion of innovation opportunities to reduce the capex of PV manufacturing through both incremental and disruptive process innovation with c-Si, platform innovations, and financial approaches.

Original languageAmerican English
Pages (from-to)3395-3408
Number of pages14
JournalEnergy and Environmental Science
Issue number12
StatePublished - Dec 2015

Bibliographical note

Publisher Copyright:
© 2015 The Royal Society of Chemistry.

NREL Publication Number

  • NREL/JA-6A20-63703


  • Capex
  • initial factory capital expenditure
  • manufacturing
  • minimum sustainable price
  • msp
  • photovoltaic
  • PV


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