Home ›

Solar Energy Mini-Series: Solar PV Manufacturing -- U.S. Competitiveness in a Global Industry

Alan Goodrich, National Renewable Energy Laboratory

Monday, October 10, 2011 | 04:15 PM - 05:15 PM | NVIDIA Auditorium, Jen-Hsun Huang Engineering Center | Free and Open to All

Over the past five years, solar Photovoltaic (PV) module shipments from China and Taiwan has grown from 6% to 54% global market share, while the U.S. has slipped from 9% to 6% market share. Chinese PV companies have gained an international pole position, in part, by achieving the industry’s lowest silicon module manufacturing cost. There is also a clear strategic effort on the part of the Chinese government to drive an expansion into the high technology enterprises of the future, like solar PV by offering strong state support for export industries such as solar PV component manufacturing. Over the long term, however, there are many challenges facing the Chinese PV industry that will impact its ability to sustain its dominant position.

China’s rapid growth has fueled relatively high inflation rates which will raise manufacturing costs over the mid- to long-term. And while capital is certainly more accessible in China, the funds that are made available often require companies to acquiesce majority-ownership and intellectual property rights. In addition, the influence of government ownership on company strategy can be at odds with other equity owners.

In this analysis we seek to quantify the decision points of two hypothetical solar PV manufacturers that are considering U.S. and non-U.S. production locations. We consider the full suite of details underlying regional differences in manufacturing including shipping costs, policies of governance and trade, intellectual property protection, and subsidies. Going against conventional wisdom, our analysis shows that the U.S. is a competitive manufacturing location for solar PV modules, in select cases.

Brief Bio:

Alan Goodrich, B.S.
Senior Analyst - Solar PV Costs, NREL

Alan Goodrich has more than ten years of experience conducting techno economic analysis in support of R&D management and business development decisions, including as a management consultant to Fortune 500 firms, such as Johnson & Johnson, General Motors, General Electric, Corning, Dow Chemical, and Eastman Chemical. Alan joined the National Renewable Energy Laboratory (NREL) in 2009 where he serves as the lead analyst for the Solar PV Cost Analysis team, which provides critical analytical support to strategic R&D decisions facing DOE, NREL, and Industry partners. Alan’s research activities and the team’s scope of work include: solar PV module manufacturing costs, materials resource availability, and the installed cost of solar PV systems. 

Alan holds a B.S. in Industrial and Management Engineering from Rensselaer Polytechnic Institute’s School of Decision Sciences and Engineering, and completed the first year of his MBA at RPI’s Lally School of Management and Technology before relocating to Colorado, in order to join NREL. Alan is currently an MBA candidate at the University of Colorado, and expects to graduate in May 2012.

Recommended Reading:

1. Augustine, N. et al. (2010). “Rising Above the Gathering Storm, Revisited – Rapidly Approaching Category 5.” National Academy of Sciences, National Academy of Engineering and Institute of Medicine. The National Academies Press. Washington, D.C.

2. Pisano, G., Shih, Willy C. (2009). “Restoring American Competitiveness.” Harvard Business Review, Special Issue: Global Competitiveness in the New World, 114-125

3. Gertner, J. (2011). “Does America Need Manufacturing?” New York Times, August 24, 2011.

4. "U.S. Solar Energy Trade Assessment 2011" (PDF) Greentech Media, Boston, MA. Solar Energy Industries Association, Washington, D.C.

5. Rosen, D., Hanemann, T. (2011). “An American Open Door? Maximizing the Benefits of Chinese Foreign Direct Investment.” (PDF) Special Report: Center on U.S.-China Relations (Asia Society) and Kissinger Institute on China and the United States, Woodrow Wilson International Center for Scholars. (AsiaSociety.org/ChineseInvestment). Washington, D.C. 

Related Themes: