Solar: Is it About Cost or Scale?

It’s about both evolving together. For the first time in history a manufactured good — a solar photovoltaic (PV) panel — can supply energy. Traditionally, we have consumed resources to make power. Burning wood, coal, oil or natural gas has been the norm.

Today we can follow the “learning curve” typical of manufactured products like transistors or big screen TVs and apply it to PV. The more we make, the more we learn and the more we reduce cost. Solar applications are everywhere. From spacecraft to lighthouses to road signs to village lighting to solar farms, we have markets that are expanding, especially as we hit large steps in elasticity.

Early on, PV was deployed in remote mountaintop locations for telecommunications power, displacing thermo-electric generators. Then village electrification in rural areas grew as PV displaced diesel generators. Today, PV is capable of displacing gas turbines for peak power usage, which is the time of day when electricity demand is the highest. Growth has been predictable as costs have declined and sales channels have matured. The predictable, long-term reliable performance with little or no maintenance has enhanced adoption rate.

The equipment used to make solar panels leverages proven manufacturing technology adapted from the semiconductor, flat panel display and automotive industries. In these existing businesses, scaling has significantly reduced production cost. Experience enables us to reliably predict that bringing scale to the solar industry will create a credible cost reduction trajectory.

For the past 30 years, we have witnessed the cost of manufacturing solar PV decrease by 20% with every doubling of installed output. At Applied Materials, we are using our strengths of commercializing technology and delivering manufacturing scale to make PV even more cost effective.

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