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.
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