A new report claims that the cost of manufacturing solar photovoltaic wafers will continue its sustained decline to hit record lows next year.

The latest Polysilicon and Wafer Supply Chain Quarterly report released by market research firm NPD Solarbuzz projects that silicon solar wafer manufacturing costs amongst vertically integrated tier 1 makers will fall a further six per cent in 2014 to hit US$0.20 – a mere third of the 2008 level of around US$0.60.

According to the report, solar PV wafer manufacturing costs have fallen by over 16 per cent on average per annum since 2008 for tier 1 makers, which include OCI, REC Silicon, SunEdison, Tokuyama and Wacker.

Crystalline Silicon (c-Si) Wafer Manufacturing Cost Forecast with Internally Supplied Polysilicon

Crystalline Silicon (c-Si) Wafer Manufacturing Cost Forecast with Internally Supplied Polysilicon

Charles Annis, vice president at NPD Solarbuzz, said that although the pace of cost declines is beginning to dwindle, manufacturers still find themselves compelled by market circumstances to find further means of reducing their expenses.

“The severe oversupply and extremely low selling prices are forcing polysilicon and wafer makers to continue to find ways to lower costs to previously assumed impossible levels,” Annis said.

In order to reduce polysilicon costs, which paired with wafer processing comprise the two key cost components of silicon solar wafer manufacturing, companies are converting to new fluidized bed reactor (FBR) plants, shifting their facilities to areas with lower utilities rates, cutting electricity usage, and in some cases going so far as to build their own power plants on site.

A number of top polysilicon producers believe these measures will enable them to bring costs to as low as $14 per kilogram in the near future, with FBR costs set to fall to below $10 per kilogram in the next several years.

With respect to the processing side, makers are reducing costs via a broad range of technical measures, including raising the multicrystalline ingot size to Gen 6/7 from Gen 4/5, cutting down on slurry consumption and ramping up recycling efforts. Sustained improvements to crystallization quality are also yielding benefits for manufacturers by increasing conversion efficiencies.

NPD Solarbuzz also foresees a sustained boom in the US solar market, with its double-digit annual demand growth surpassed only by China and Japan.

The PV project pipeline in the US is currently in excess of 43 gigawatts, making it the third-largest end market in the world.