The Value of Efficiency in Photovoltaics

Herein, we introduce the value of efficiency (VOE)—a metric defining the allowable cost for innovation by analyzing the co-dependence of levelized cost of electricity (LCOE) on manufacturing cost and efficiency. Historically, VOE values have dropped rapidly and will further, yet slower, decline in the future. Additionally, VOE values for residential and utility installations converge at different levels, indicating a stronger diversification of these market segments. Similarly, local differences in VOE suggest a regional market diversification. Advanced concepts like n-type monocrystalline PERC silicon solar cells could be economically preferable to multicrystalline silicon solar cells in some countries but may fare worse in others, including China and India. Extending the analysis to tandem photovoltaics, we confirm its potential to improve LCOEs for residential applications but foresee challenges for utility markets. Finally, we explore detrimental impacts of degradation and show that competing for lower LCOEs demands matching degradation rates of established technologies.