The PV industry spends countless hours debating the merits, weaknesses, and prospects of the firms that occupy the competitive landscape. Aside from the ever-important yardsticks of cost-per-watt andconversion efficiency, however, the conversation to date has lackeddefinitive metrics with which to gauge the competitive positioning ofcompanies in the space. We spend a lot of our time at GTM Research thinking about the metrics that matter and quantifying therelationships between them: the seven discussed below represent our best attempt thus far. To put it succinctly, if you’re not doing at leastone of these things, chances are your days in the PV industry arenumbered. Of course, none of this is rocket science, but this discussion should provide a useful framework for assessing the positioning ofindividual producers and charting the course of industry dynamics in the days ahead.
Low Manufacturing Cost per Watt: We all know this one. Now as much as ever, cost per watt remains the most important source of competitive advantage in PV manufacturing, as well as the easiest(though not necessarily easy) metric to discern and value. It’s anumber, which means it can be compared, and many companies currentlyreport it. The reason that it is important is also easily understood:electrons are a commodity, and consequently any grid-connectedenergy-generating technology will be valued primarily on the (levelized) cost of electricity it drives, questions of reliability and generationrisk aside (which is where technology and balance-sheet bankability candistort the equation).
For markets and applications constrained by finance, however, upfrontcost is more front-of-mind — especially with a capital-intensivetechnology like PV — meaning that the buyers of the technology(developers), despite attempts to shift the onus of the discussion, arestill very much focused on the per-watt installed cost, of which themodule remains a key part of the equation. This, of course, is why the Chinese crystalline silicon giants (JA Solar, Yingli, Trina) and First Solar have grown into the behemoths they are today — their industry-leading manufacturing costs. Scale,technology, value chain participation, and location are the primarydrivers of manufacturing cost at a high level.
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