Summary
The article by Laura Insee correctly points out how cost cutting of solar panels is now focusing on the installation process.
Much work has been done on the manufacturing process of the panel, and it is evident how further cost reduction is going to be way more difficult, law of diminishing returns.
With 30% of the panels going to the residential market, building-integration should increase its market penetration.
Analysis
The economic crisis and the changes in feed-in tariffs around the world have brought the industry to greatly cut its costs. Specifically, much work has been done on the manufacturing process of the panel, with many innovations in industrial automation and much effort in reducing the cost of raw materials. During the past year photovoltaic panels have dropped more than 50% from 2008 values of $4.20 a watt.
It is now evident how further cost reduction is going to be way more difficult, law of diminishing returns, and installation is now being targeted to squeeze more margins out.
With 30% of the panels going to the residential market, and the fact that due to smart grid and distribution consideration this is set to increase (estimates of 35-38% over 12 months), one need consider several factors:
1. Fragmentation of the market segment "Installators": specially in the residential market the high number of small enterprises hinders standardization and thus economy of scale.
2. Fragility of the panels. Most products require extreme care in handling and fixing on roofs. Recent building integrated roof tiles from System Photonics (www.system-photonics.com ) solve this issue but are still in early entry in the market phase.
3. Accessories of the panels. Manufacturers can improve the installation by offering pre-installed frames and slides, although lack of standards (see above) makes it difficult to guess the best accessories. Again building integrated solutions provide an advantage when they actually make part of the roof or facade.
4. Life cycle of the panels. Most panels have 25 years guarantee on the output and only 5-10 years guarantee on their actual physical resistance. When considering total life-cycle cost it is evident that both more robust materials allowing for a full 25yrs lifespan, and an efficient post-life recycling, would help reduce costs farther.
In conclusion, in the general trend of green technologies moving to a cost per watt that is comparable with traditional energies, thus making it less and less necessary to have public funding in support, there is arguably ground for more re-design of the photovoltaic panels. The industry can develop standards regarding the materials used for panels, the process and tools for installation, the process and tools for after-life treatment of the panels. In this scenario building integrated has some more ground to catch.
