VALUE CREATION IN THE PHOTOVOLTAIC SECTOR
In designing policies to support value creation from the development of a domestic solar PV industry, a deeper understanding of the requirements in terms of labour, skills, materials and equipment is needed.
Cost breakdown of a PV project
The total cost of a utility-scale ground-mounted solar system can be divided into three categories: the cost of modules, the cost of inverters, and balance of system costs (other hardware, installation and soft costs). In 2015, balance of system costs were the major cost component of solar projects, accounting for about 60 percent of total cost; modules accounted for 30 percent and inverters 10 percent (IRENA, 2016b).
Hardware costs other than modules and inverters include cabling, racking and mounting, safety and security, grid connection and monitoring and control. Installation costs involve construction and electrical installation and health and safety inspection. Soft costs include those related to financing, permitting, system and engineering design (IRENA, 2016b).
Balance of system costs vary significantly across countries. Figure 3 shows the average costs for utility-scale projects in 12 markets.
REQUIREMENTS FOR SOLAR PV DEVELOPMENT
With a total at 229,055 person-days needed to develop a solar PV plant of 50 megawatt (MW), labour requirements vary across the value chain. People working on O&M are needed throughout the project lifetime, and therefore represent the bulk of the labour requirements (56 percent of the total)4 (see Figure 4). Equipment manufacturing (22 percent) and installation and grid connection (17 percent) also require significant labour inputs.
The composition of solar panels depends on the type of panel used. Silicon-based (c-Si) PV technology (including monocrystalline, poly and multicrystalline, ribbon and amorphous silicon) currently dominates the market, with a market share of about 92% (IRENA and IEA-PVPS, 2016). However, the materials used for the inverters, mounting structures and cables are often common regardless of the selected panel technology. Figure 5 illustrates the quantities of materials needed to manufacture and install 1 megawatt (MW) of silicon-based solar PV plant. Almost 70 tonnes of glass are needed for the PV panels, almost 56 tonnes of steel and 19 tonnes of aluminium go into the mounting structures and panels, and around 47 tonnes of concrete are required for foundations. Other key materials, such as silicon, copper and plastic make up smaller share of total weight of material for a solar PV plant.
A more detailed breakdown of labour, materials, equipment and information required to undertake the various activities can be analysed at each segment of the value chain.