Solar Panel Technologies
Solar photovoltaic panels are primarily differentiated by the technology used to generate electricity from sunlight. The basic principle of the solar photovoltaic effect is that sunlight displaces electrons in the material creating an imbalance between 2 parts, and electric current flows to restore that displaced electron. The most commonly used photovoltaic material is semiconductors, primarily crystalline silicon and thin-film technologies such as Cadmium-Telluride and Copper Indium Gallium diSelenide. Crystalline silicon is available in polycrystalline silicon and monocrystalline silicon form. In some cases, the terms poly-silicon or mono-silicon are also used to describe the same material. One of these solutions is what you will probably buy and use when looking at solar panels. Therefore, it pays to know a little background about the technologies and how they are likely to affect the cost of your solar panels.
In some cases, mainly if you are using a PPA or Lease terms, you are unlikely to be concerned about the solar panels because the solar panels used and the various aspects of the technology will not be relevant to your cost-benefit analysis. In these circumstances, the study of solar panels will generally be for academic purposes.
Why Crystalline Silicon is ‘the’ Solar Technology in 2022
Most solar panels manufactured in 2022 use crystalline silicon, and thin-film technologies such as Cadmium-Telluride and Copper Indium Gallium diSelenide are more niche products. Most thin-film technologies are used in utility-scale projects, where the technology directly impacts electricity generation. For domestic users such as yourself, crystalline silicon panels are sufficient. High volume manufacturing of crystalline silicon solar panels has led to this technology being the lowest cost in the market. The low cost is by no means a compromise on the quality and capability of crystalline silicon solar panels. Crystalline silicon solar panels continue to break records in efficiency every year. The prominent solar panel manufacturers using this technology spend a sizeable amount of their operational budget on research & development.
Technology Improvements that increase Crystalline Silicon Electricity Generation
In crystalline silicon panels, additional features and technical nuances enhance the efficiency of solar cells and solar panels. The logic to improve solar efficiency is really very simple. Maximize the amount of sunlight that reaches the semiconductor material and reduce the resistance in the electrical circuits. This is achieved in various ways, some of whom are as follows;
- Increase the size of the solar cells
- Fit as many solar cells in a single panel as possible
- Add backing material that reflects the sunlight within the solar cell to increase electron displacement
- Move the connector ribbons to the back of the cell
- Arrange solar cells with smaller spaces in between them to have a seamless arrangement of individual cells
- Reduce the cell sizes to half-cut cells to reduce the internal electrical resistance, which increases the flow of current
When you look through the spec sheets and marketing material of various solar panels, you need to look for these points. And assess the technologies they are referring to delivering on increasing the amount of electricity the solar panels generate? Every manufacturer has a self-interest in presenting their product as the premier product in the market; it is our job to recognize if these claims will be delivered during the use of the product. So, as is the case in any other industry, the brand and the track record of the solar panel manufacturer have much to do with why you would commit to a particular solar panel.
Bloomberg NEF is not the Correct Reference Point for the Performance of Solar Panels
The most commonly used reference point is Bloomberg NEF’s Tier system, but as Bloomberg themselves have begun to disclaim, being listed by them alone isn’t a reliable metric of a manufacturer’s capability. A better measure would be to rely on reports by independent certification bodies such as PVEL, DNV-GL, or PTL. Certification bodies that conduct tests on solar panels, including accelerated degradation, to predict the solar panel’s future performance. Solar panels typically have guarantees of 10 -12 years and warranties of 25 – 30 years. Still, given that most companies have been in the industry and manufacturing panels for less than 30 years, it would appear to be a claim without evidence. The solar industry, although nascent, is growing at a tremendous pace; the technology and its capabilities have been proven, but not necessarily by the particular manufacturer that you could be considering.
Supply Chain and Ancillary Industries’ Contribution to the Cost of Solar Panels
The increase in adoption has also established a sustainable supply chain and ancillary support industries. Why is this relevant in the discussion of the cost of solar panels? Solar panel manufacturing can be compared to 2 industries, the manufacture of electronics and the energy industry. Both of which are mature industries, and therefore the question of the quality of their products is no longer questioned. The nascent solar industry has shorter historical data to establish trends and predict outcomes. Thus comparing the solar panel manufacturing industry and the energy industry allows for a rational analysis of the evolution of the solar industry. The energy industry creates durable long-term infrastructure, and the electronics industry drives continuous growth with the performance of products improving with each iteration. Suppose these positive aspects of the energy and electronics sector contribute to the development of solar panels. We can assert that solar panels will continue to become more efficient, durable, highly productive, and therefore cost-effective in subsequent years. Furthermore, these are the underlying contributors to the cost of solar panels;
- Technology
- Efficiency
- Reliability
- Manufacturer Track Record
- Manufacturing Capacity
- Supply Chain
- Distribution & Sales
Demand & Supply Influence on Cost of Solar Panels
Obviously, there is a demand & supply component to the cost of the solar panels at any given time, and while, in general, the price of solar panels has trended downwards, there have been momentary spikes in the price due to supply constraints or increased demand. Any increase in electricity prices tends to drive up demand for solar panels and therefore has a consequence on the cost of solar panels. The demand for solar panels has seen exponential growth in the past decade, and manufacturing capacity has kept pace with this growth in the market. Solar panel manufacturers have continued to add manufacturing capacity, and this trend is likely to continue at the same rate for the next decade.
Electronics & Energy the Unique Factors that Affect Cost of Solar Panels
Another factor is that while the cost per Wp of solar panels has remained within the range of $1/Wp to $1.1/Wp for several years, the solar panels’ efficiencies have continued to increase. As a result, older technology and relatively less efficient panels are now available at rates below $0.75/Wp. By this measure, the cost of solar panels has indeed fallen, a pattern reminiscent of the electronics industry, such as the smartphone sector, where; the cost of the new model remains in a similar price range, but the additional features and functionality results in you getting more for the same cost.
When you spend on an electronic device, electrical appliance, or kitchen cabinets, you rarely consider it an investment but a utilitarian expense. In other words, you do not have direct monetary benefit but derive the benefit through the utility of these additions to your home. Unlike these expenditures, however, solar panels are an investment and will have a positive monetary return on the investment. The electricity generated by solar panels results in direct cash savings or, in some cases, additional income due to a net surplus of electricity export. Therefore, the upfront expenditure on the solar panels can be recouped within a payback period, and all future savings and incomes are additional gains. The return on investment does not directly apply to solar panels but to the solar PV system; nevertheless, as solar panels are the primary component of any solar PV system, they significantly affect the payback period.
In summation, purchasing solar panels from a utilitarian view is to choose the best available deal with the best specifications. Keep in mind the recommended solar panel manufacturing brands and their respective track records. While a strong track record is not necessarily a guarantee for future performance, it is the most reliable metric available. Unfortunately, there is not a lot of brand recognition for solar panels, and it isn’t easy to reliably judge the performance of solar panels based on other user reviews. Therefore it is left to experts like us to provide you with our considered opinion on the solar panels you should be choosing for your home. We have created a list of our preferred solar panel manufacturers and a brief of their product lines for your convenience.