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  Date: 15/09/2013

Solar PV cost dependent on automation, not on cheap labour

The manufacturing cost of Solar photovoltaic(PV) cells is dependent more on manufacturing automation, material research, and supply chain management rather than cheap labour, according to the latest study by MIT researchers and US Department of energy's National renewable energy laboratory (NREL). This team finds, China the leading supplier of solar PV is selling low-cost solar photovoltaic cells, due to production automation and well-established local supply chain.

The main contributors to that country’s lower PV prices are economies of scale and well-developed supply chains not cheap labour, says MIT release.

Tonio Buonassisi, an associate professor of mechanical engineering at MIT says, the study makes clear that China’s current price advantage in solar-panel production “can be replicated elsewhere, if the right conditions are met.”

Buonassisi suggests improvements such as thinner silicon wafers to greater cell efficiency and better ways of mounting the cells in a panel could end up making solar PV highly competitive with other sources of power.

“We could be hitting grid-competitive costs … within the next few years,” adds Buonassisi.

So what this means to India, the companies and researchers here have to develop automated manufacturing technologies and research on extremely efficient Solar PV cells, and use the abundant labour to build off-grid solutions and on-grid installations.

American companies try to protect the U.S. domestic market from Chinese Solar PV industry, and at the same time they oppose some of the policies in India, which are created to protect domestic solar PV industry. When it comes to source of good technology for India, Japan looks to be the best partner, some of the companies there have developed highly efficient solar PV cells. Panasonic and Sharp are good examples.

From past two years, solar PV industry is undergoing major changes and continue to do so for another 1-2 years. So any strategic decision must be reviewed regularly to make it successful.
Author: Srinivasa Reddy N
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