Yao Yao, a renewable energy analyst at SinoLink Securities, noted dramatic cost shifts in the solar industry during a recent speech at the China Photovoltaic Industry Association's (CPIA) annual conference earlier this month.

Yao said secondary materials have reshaped the industry’s cost structure this year, as they now dominate production costs.

SinoLink Securities said that aluminum frames were the largest component by November 2024, representing 14% of total solar panel production costs. Packaging glass followed at 13.4%, with silver paste accounting for 11.6% of total production costs.

Polysilicon, historically a major cost driver, has fallen to fourth place at 9.9%. By contrast, late 2023 figures showed glass leading at 16.4%, polysilicon at 14.1%, and aluminum frames at 12% of total production costs.

High aluminum prices have driven up aluminum frame costs, even as processing fees decline due to increased capacity and pressure to cut costs, according to SinoLink Securities. Manufacturers are testing alternatives such as aluminum alloys, rubber clips, and composite materials, though reliability concerns have slowed adoption. Standardized designs aimed at reducing material use could further cut costs.

Chinese energy policies restricting PV glass production have kept glass costs high. Yao said that glass prices will likely climb further in 2025 as panel demand rises, exacerbating capacity limitations and fueling rapid price increases.

Silver paste costs remain high amid tight global silver supply and rising industrial demand from solar and AI applications. Yao estimated silver usage in tunnel oxide passivated contact (TOPCon) cells at 9 mg/W to 11 mg/W and heterojunction (HJT) cells at 15 mg/W to 16 mg/W, but zero busbar (0BB) technology might lower these figures. Metal costs remain significant, comprising up to 42% of non-silicon costs in advanced cells.

Copper paste has drawn interest as a potential alternative to silver, but Yao noted that high equipment costs and technical hurdles make it impractical for PV applications at this stage.

SinoLink Securities said it expects global solar installations to annually grow 10% to 15% through 2025, with PV panel demand set to reach 650 GWp to 700 GWp.

Looking ahead, Yao said that technological innovation and material optimization will be crucial for sustaining growth and reducing costs in the global PV market.