Many industry participants have the misplaced belief that higher conversion efficiency equates to lower cost. We call it the “Efficiency Myth”.
The ultimate goal of the solar industry is to achieve “grid parity”, meaning that solar electricity price is competitive with the price of electricity generated from fossil fuels. Efficiency is one of many factors affecting the cost of solar electricity. By itself, efficiency CANNOT predict module cost. It is only one factor. It also does not determine the total system cost, or the total cost of per kWh of electricity generated over time.
At NovaSolar, our focus is not efficiency. It is cost per watt and cost per kWh. Increasing efficiency helps reduce cost. Over the next four years, we will increase the cell efficiency from 8% to 11%.
The cost of installing solar panels will be higher for panels with a lower efficiency. During installation, we mount the solar panels and wire them to collect the electricity route it to the DC to AC inverter. For the same level of DC watts, we will need to install more solar panels if the efficiency is lower. Therefore, the cost will be higher.
We have greatly reduced the impact of efficiency on installation cost by developing a very low cost installation method. We have replaced expensive pounded steel posts with low cost concrete ballasts to hold the solar panels against the wind. With this design, we have reduced both material and labor costs. In addition, we have a novel wiring design that is especially well suited for a-Si solar panels and reduces the DC wiring cost. This is another example of synergies across the value chain that we have utilized with our vertically integrated business model.
Even more important, we have a relentless focus on cost. We have a world-wide supply chain to get our materials at the lowest possible cost. As our volumes increase, we expect significant cost reductions in materials. In addition, in our R&D roadmap, we have several design changes that will reduce the cost of our production equipment, the cost of the electrical connections to our module, and the cost of our module protection. We also have several design changes that will improve the utilization of process gasses and materials.
In summary, the right focus is cost per watt and cost per kWh of electricity. These are the numbers that count. With thin-film silicon solar panels, we will have a leading cost per watt in the industry for the solar panels. With our low cost installation design, we will have a leading cost per watt for the complete solar installations. Finally, we will have the leading cost per kWh of electricity. On top of our low cost per DC watt installed, a-Si gives us an extra 15% in kWh per year per DC watt. And, our focus on reliability has reduced the yearly power loss from 1% per year to almost zero. Averaged over 20 years, this gives us another 10% more kWh. Putting this all together, compared to poly-Si solar panels, we expect that we will deliver a 20 – 25% more kWh per year for the same price.