Utility-Scale Solar Economics
Analysis of photovoltaic deployment, supply chains, and LCOE trajectories.
The Polysilicon Supply Chain
Utility-scale solar has seen the most dramatic cost reductions of any energy technology over the past decade. The primary driver has been economies of scale in the Chinese polysilicon and wafer manufacturing sectors. However, recent trade policies and forced labor concerns have prompted efforts to onshore or 'friend-shore' supply chains, increasing short-term CapEx in Western markets.
Grid Integration Constraints
The core challenge for solar is its diurnal generation profile. As solar penetration increases, it creates the 'duck curve' phenomenon, depressing wholesale power prices during midday (price cannibalization). This necessitates pairing solar with storage to shift generation to peak evening hours.
| Region | Avg CapEx ($/Wdc) | Typical LCOE ($/MWh) |
|---|---|---|
| US (Southwest) | $0.95 | $28 - $41 |
| Europe (South) | €0.70 | €35 - €50 |
| China | $0.55 | $22 - $35 |
Source: Lazard 2023 / BNEF 2H 2023.
Interactive: Solar Yield Estimator
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