We’ve been trying for some time to find a good prediction of how quickly worldwide photovoltaic manufacturing is going to increase.  We know in 2005 the entire world production of photovoltaic cells was about 1.6 gigawatts.  How much will we add in 2006?  Where will we be by 2010?

Photo: Sandia National Labs

Because of the revolution in thin film photovoltaic technology, along with the predicted end to the bottleneck in polysilicon production which has limited manufacturing of crystaline photovoltaics, exponential growth in production is possible, if not likely. 

Huge figures are being kicked around.  Just some of the high profile thin-film photovoltaic manufacturers, Miasole, Nanosolar, First Solar, Daystar Technologies, and Unisolar, will themselves be adding another gigawatt to the world’s production within a few years.  With the polysilicon shortage easing, leaders in crystaline manufacturing, such as SunPower, will probably also double their output in the next few years.

Add to this the rest of the world, China in particular.  China has 3.5x the population of the USA, yet consumes only half as much energy.  On a per capita basis, the Chinese use only 1/8th as much power as the Americans.  For this reason, the Chinese are developing every source of energy they can, including photovoltaics.

An excellent website that tracks developments in photovoltaics is SolarPlaza.com, which has just published an article entitled “Solar Cells ‘Made in China’ Coming Our Way.”  In this article, Zhang Cheng, as spokesperson for a consortium of Chinese photovoltaic manufacturers, makes an astonishing claim:  In 2005, 12 manufacturers in China produced 150 megawatts of photovoltaic cells.  In 2006, an estimated 30 manufacturers will produce 1,450 megawatts.  This is just the beginning, and this is happening all over the world.

Based on these figures, it is likely worldwide photovoltaic production in 2006 will easily be twice what it was in 2005, and 2007 could show another doubling in capacity.  According to the S-1 released last month by First Solar, manufacturing costs on their thin-film line have now dropped to $1.30 per watt.  This is very nearly competitive with conventional energy; in fact this cost is already cheaper than conventional energy in several regional applications around the world.

Because the manufacturing costs have dropped so much, photovoltaics are now a ‘capacity constrained’ market, which drives prices artificially high.  This means anyone who wishes to enter this market will enjoy high margins and they will sell their product as fast as they can make it.  And that is going to continue to happen for a long, long time.  Compared to photovoltaics, there is probably nothing else on earth with more potential to change the global energy paradigm.