Study Report:Do you agree with this report--that production scale, not lower labor costs, drives China's current advantage in manufacturing photovoltaic (PV) solar energy systems? This--according to a new report released by NREL and MIT.
Although the prevailing belief is that low labor costs and government subsidies for PV manufacturing in China account for that country's dominance in PV manufacturing, the NREL (Energy Department's National Renewable Energy Laboratory), and MIT(Massachusetts Institute of Technology) study shows that a majority of the region's current competitive advantage comes from production scale and resulting supply chain benefits. The study's findings also suggest that the current advantages of China-based manufacturers could be reproduced in the United States. "Assessing the Drivers of Regional Trends in Solar Photovoltaic Manufacturing," co-authored by NREL and MIT, and funded by the Energy Department through its Clean Energy Manufacturing Initiative, was published today in the peer-reviewed journal Energy & Environmental Science. By developing manufacturing cost models, the team of researchers examined the underlying causes for shifts from a global network of manufactures to a production base that is now largely based in China.
The study shows that China's historical advantage in low-cost manufacturing is mainly due to advantages of production scale, and offset by other country-specific factors, such as investment risk and inflation. The authors also found that technology innovation and global supply chain development could enable increased manufacturing scale around the world, resulting in broader, subsidy free PV deployment and the potential for manufacturing price parity in most regions. Their analysis indicates that further innovations in crystalline silicon solar cell technology may spur new investment, significantly enhancing access to capital for manufacturers in most regions and enabling scale-up, thus equalizing PV prices from manufacturers in the United States and China.
Let us know if you think this manufacturing theory can be reproduced in the United States as the study suggests?
Article Source: NREL -- See Publication HERE
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