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SinoLink Securities says aluminum frames now dominate solar panel costs as changes in material prices reshape the cost structure of the PV industry and drive the need for innovation.
Yao Yao, a renewable energy analyst at SinoLink Securities, pointed out drastic changes in solar industry costs during a recent speech at the China Photovoltaic Industry Association (CPIA) annual conference earlier this month.
Yao said secondary materials have reshaped the sectors cost structure this year as they now dominate production costs.
SinoLink Securities said aluminum frames were the largest component in November 2024, accounting for 14% of total solar panel production costs. This was followed by packaging glass, accounting for 13.4%, and silver paste, accounting for 11.6% of total production costs.
Polysilicon, historically a major cost factor, has fallen to fourth place at 9.9%. In contrast, figures for the end of 2023 showed glass in the lead at 16.4%, polysilicon at 14.1% and aluminium frames at 12% of total production costs.
According to SinoLink Securities, high aluminum prices have pushed up costs for aluminum frames, even as processing rates decline due to increased capacity and pressure to cut costs. Manufacturers are testing alternatives such as aluminum alloys, rubber clips and composite materials, although concerns about reliability have slowed their adoption. Standardized designs aimed at reducing material use could further reduce costs.
Chinas energy policies, which restrict the production of photovoltaic glass, have kept costs high. According to Yao, glass prices are likely to rise further in 2025 as demand for panels increases, exacerbating capacity constraints and leading to a rapid increase in prices.
Silver paste costs remain high amid tight global supply and rising industrial demand for solar and AI applications. Yao estimated silver usage in oxide passivated tunnel contact (TOPCon) cells at 9-11 mg/W and in heterojunction (HJT) cells at 15-16 mg/W, but zero busbar (0BB) technology could bring these figures down. Metal costs remain significant, accounting for up to 42% of non-silicon costs in advanced cells.
Copper paste has attracted interest as a possible alternative to silver, but Yao said high equipment costs and technical hurdles make it impractical for photovoltaic applications at this stage.
SinoLink Securities expects global solar installations to grow annually by 10% to 15% through 2025, with demand for PV panels reaching 650 GWp to 700 GWp.
Looking ahead, Yao said technological innovation and material optimization will be crucial to maintaining growth and reducing costs in the global PV market. |
