Cost of PV Electricity
The cost of PV electricity is determined from solar cell conversion efficiency together with areal
cost of the module. The relationships are simple:
C = $/peak watt = (module areal cost/Eff) + (BOS areal cost/Eff) + 0.10, (1)
where
C = cost per watt of incident solar irradiance at peak solar intensity, $/Wp
Eff = converted solar power (fractional conversion efficiency × 1,000 W/m^2 ), Wp/m^2Module areal cost = cost of modules only per unit area, $/m^2
BOS areal cost = balance of systems (support structure, installation, wiring, land, etc.) cost
per unit area, $/m^2
$0.10 = cost of power conditioning, AC-DC inverter, $/Wp
Then, taking into account the cost of capital funds, interest rates, depreciation, system lifetime,
and the available annual solar irradiance integrated over the year (i.e., considering the diurnal
cycle and cloud cover, which reduce the peak power by a factor of about 5), cost per peak watt
$/Wp can be converted to $/kWh from the simple relationship:
1$/Wp ≈ $0.05/kWh (2)
Currently, silicon PV module costs are about $350/m^2 and BOS costs are about $250/m^2 , so that
with present silicon module conversion efficiencies of 10%, C ~ $6/Wp, and the electrical energy
costs are about $0.30/kWh.
Solar electricity is currently more than a $7 billion per year business, growing at more than 40%
per year.
PV TECHNOLOGY OPTIONS — FLAT PLATE OR CONCENTRATORS
Photovoltaic technologies can be divided into two main approaches: flat plates and
concentrators. Flat-plate technologies include crystalline silicon (from both ingot and ribbon- or
sheet-growth techniques) and thin films of various semiconductor materials, usually deposited on
low-cost substrate, such as glass, plastic, or stainless steel, using some type of vapor deposition,
electrodeposition, or wet chemical process. Thin-film cells typically require one-tenth to one-
hundredth of the expensive semiconductor material required by crystalline silicon. Even thinner
layers are involved in some of the future generation technologies, such as organic polymers and
nanomaterials. In the case of concentrators, a system of lenses or reflectors made from less
expensive materials is used to focus sunlight on smaller, somewhat more expensive, but highly
efficient solar cells. Table 1 provides a breakdown of PV module production in 2003 by
technology.