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Growing Markets,
Growing Opportunity
One of the key challenges of the 21st century is meeting growing
energy needs while stewarding our local and global environment and
contributing to a healthier economy.
The shift to clean power generating capacity over the next 25 years is
being accelerated by increasing economic competitiveness of wind,
solar and other clean energy technologies. Electrification of transportation and increasing
efficiency of vehicles is helping lower carbon impact while extending opportunities for
mobility. Carbon fiber and other advanced materials and manufacturing processes are
creating new ways to create goods more efficiently.
This market-driven shift creates a unique economic opportunity. Public and private
investments in energy research, design, development, and deployment have catalyzed
important advances in energy technology that can contribute to economic competitiveness
and energy production.
This report is CEMACs first research highlights publication, compiling the exciting findings
from our first studies in 2015. Using detailed bottom-up cost analysis, CEMAC examines the
dynamics and health of the full supply chains for clean energy technologies and from that
gains insights to help policymakers, industry, and investors better understand the global
market for clean energy technologies. CEMAC analysis illuminates why certain countries or
regions lead in production of these technologies, and how or if those circumstances can be
replicated elsewhere. Technologies spotlighted heresolar photovoltaics, wind turbines,
automotive lithium-ion batteries, and carbon fiber manufacturingrepresent work completed
by CEMAC and DOEs National Laboratory network. Over time, CEMAC analysis will expand to
encompass a more complete suite of clean energy technologies.
Thank you for your interest in CEMAC. We look forward to engaging with you in a prosperous,
clean energy future.
CEMAC | 3
IMPORTANCE OF CLEAN
ENERGY MANUFACTURING
ANALYSIS
Global primary energy demand is likely to grow by more than 30% over the next 20 years, with
much of the increased demand driven by emerging markets (Citi GPS 2015; REN21 2015; IEA 2015).
Much of that demand is likely to be met with clean energy resources. Globally, annual investment in
clean energy is approximately $300B and anticipated to grow from that level for many decades.
10,000
Coal
Oil
8,000
Natural Gas
Nuclear
6,000
Renewables
TWh
Other1
4,000
2,000
0
1971
1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
1
Includes non-renewable wastes, electricity from chemical heat and other sources (e.g. fuels cells)
Figure 1. Increase in global power generation, by source (19712013). Data source: International
Energy Agency
100%
90%
Transportation costs
80%
70%
Shipping
60%
Maintenance
50%
Equipment
Energy
40%
Labor
30%
Materials
Synergistic industries
and clustering
Existing or growing market
Ease of doing business
20%
Safety
10%
Regulations
0%
Li-ion Batteries
PV
Wind
Carbon Fiber
Figure 2. Normalized cost components for select clean energy technologies in the
United States. Data source: CEMAC
CEMAC | 7
MANUFACTURING
ANALYSIS:
Findings and Opportunities
CEMAC has conducted four major studies on the manufacturing of clean energy technologies. Three of these
focused on the end product: solar photovoltaic modules, wind turbines, and automotive lithium-ion batteries.
The fourth area focused on a key material for manufacturing clean energy technologies, carbon fiber.
Contents
10
16
19
25
CEMAC | 9
Europe
ROW
Japan
China
USA
60
40
20
India
80
120
100
SNAPSHOT:
Solar PV Market
2011
2012
2013
2014
2015P
2016P
2017P
2018P
2019P
2020P
Note: P = Projection.
Figure 3. Historical, current, and projected global installations of photovoltaics. Data sources:
Data displayed represents the median figures from the following sources: Henbest and Giannakopoulou 2015, Osborne,
Boyes, and Sutton 2015, Shah and Booream-Phelps 2015, GTM 2015, Labastida and Gauntlett 2015.
40%
20%
0%
-20%
-40%
-80%
Wafers
3%
Japan
42%
Europe
88%
20%
results for companies included in Bloomberg Solar Energy industry coverage, 3rd Quarter 20041st Quarter 2015.
USA
ROW
12%
Solar Cells
Wafer Capacity
0%
7%
2%
22%
Figure 4. Average and range of gross margins across a sample of todays 20 largest solar
photovoltaics manufacturing and installation firms. Data source: Bloomberg L.P. (2015). Operational
Ingots
Polysilcion Capacity
Average
Max
Min
-60%
Polysilicon
60%
20
10
20 Q1
10
20 Q2
10
20 Q3
10
Q
20 4
11
Q
20 1
11
Q2
20
11
Q
20 3
11
Q
20 4
12
20 Q1
12
20 Q2
12
20 Q3
12
Q
20 4
13
20 Q1
13
20 Q2
13
20 Q3
13
20 Q4
14
20 Q1
14
20 Q2
14
20 Q3
14
Q
20 4
15
20 Q1
15
Q2
1%
2%
PV Modules
Cell Capacity
Module Capacity
17%
20%
3%
77%
3%
5%
2%
70%
4%
Figure 5. The wafer-based multi- and mono-crystalline silicon PV value chain and manufacturing capacity by country/region for each
segment. Data source: NREL Solar Database
CEMAC | 11
Canada
Germany
Japan
United States
China
India
Mexico
Taiwan
Philippines
Malaysia
< 500,000
100,000,000
300,000,000
750,000,000
1,500,000,000
Exporter
Importer
Figure 6. Value of trade in solar photovoltaic components between the United States and top five export markets and top five import
sources, 3-year average (2012-2014)
Manufacturing Today
Global PV manufacturing can be treated
as an integrated value chain from
polysilicon production through module
assembly. Silicon-based PV modules
are manufactured modularly via the
discrete steps of polysilicon, wafer, cell,
and module (Figure 5), all of which have
relied on relatively standard product
sizes and processes. These factors have
facilitated commerce of intermediate
products and the geographic diffusion
of product and manufacturing-process
technologies (Basore, Chung, and
Buonassisi 2015).
PV modules are primarily a commodity
product, and the industry and supply
Germany
Poland
Ukraine
Netherlands
Canada
France
Spain
Portugal
United
States
Italy
Czech Republic
Hungary
Mexico
South Korea
Turkey
Romania
Egypt Qatar
India
United Arab
Thailand
Emirates
67,000
Singapore
Wafer
Cell
Module
Taiwan
Philippines
Malaysia
Brazil
South Africa
Argentina Uruguay
35,000
15,000
1,000
100
Total Capacity
(Metric Tons)
Japan
China
180,000
100,000
50,000
10,000
3,000
Polysilicon
Figure 7. Distribution of photovoltaic component manufacturing (top 500 firms in 2015). Data source: CEMAC analysis of Bloomberg New Energy
Finance and Greentech Media data.
China Dominates
PV Manufacturing. Why?
The sheer scale of production,
in addition to lower labor costs,
drives Chinas current advantage in
manufacturing solar PV modules.
The growth of the Chinese PV
manufacturing sector has been
dramatic, moving from being very
small ten years ago to dominating
global markets today. Chinas scale
advantage may have been enabled,
in part, through preferred access to
capital (indirect government subsidies)
and additional incentives to create jobs
within its provinces. As the domestic
ecosystem for PV manufacturing
CEMAC | 13
Jilin
Inner
Mongolia
CHINA
Ningxia
Tianjin
Shanxi
Hebei
Shandong
Qinghai
Shaanxi Henan
Hunan
Guangxi
SOUTH KOREA
JAPAN
Jiangsu
Hubei
Sichuan Chongqing
Yunnan
Liaoning
Beijing
Anhui
Jiangxi
Shanghai
Zhejiang
Fujian
Guangdong
Total Capacity
(Metric Tons)
Xinjiang
Polysilicon
80,500
59,000
37,500
16,000
3,000
28,000
Wafer
Cell
Module
INDIA
Hainan
THAILAND
TAIWAN
PHILIPPINES
MALAYSIA
20,000
10,000
1,000
100
SINGAPORE
Figure 8. Distribution of photovoltaic component manufacturing in Asia. Data source: CEMAC analysis of data from Bloomberg New Energy Finance,
Greentech Media, and ENF Ltd.
NET Difference,
$(0.078)
Overhead, $(0.005)
Equipment, $(0.013)
Maintenance, $(0.004)
$(0.08)
$(0.06)
$(0.04)
$(0.02)
$-
$0.02
$0.04
$0.06
Figure 9. Cumulative cost differentialU.S. vs. urban China mono c-Si poly, wafer, cell,
and module production. Insight: Low electricity prices provide a cost advantage to U.S.
manufacturers of c-Si modules compared to China-based competitors, although that
advantage appears to be offset by labor cost and supply chain benefits for manufacturers
in China. Data source: Ongoing NREL cost analysis
Opportunity Space
Improved levels of cost and
performance, such as those outlined by
the DOE SunShot Initiative, could spur
demand, encourage industry growth,
and drive dramatic scale-up if regions
facilitate supply-chain development
and access to capital (SunShot Vision
Study 2012).
If it remains constant, existing global
PV manufacturing capacity is capable
of producing PV supply sufficient to
generate 5% of the worlds electricity.
$0.80
$0.79
$0.74
$0.68
$0.66
$0.70
$0.72
$0.72
$0.66
$0.60
Research and
Development;
Plus Sales, General
and Administrative
$0.50
Manufacturing
Equipment and
Facilities
$0.63
Maintenance
$0.40
Direct
Manufacturing
Labor
$0.30
Electricity
Materials
$0.20
Calculated
Sustainable Price
for Blended Spot
and Contract Sales
$0.10
$0.00
United
States
Urban
China
Lowest Cost
China
Taiwan
South
Korea
Malaysia
Philippines
Germany
Figure 10. Regional manufacturing costs and sustainable price requirements for a standard c-Si supply chain. Insight: The calculated regional
manufacturing costs and sustainable price requirements, by country, for the standard multicrystalline silicon PV module supply chain shows
that price differences are largely attributable to differences in variable costs for manufacturing modules, wafers, and cells, like labor and
electricity. Data source: Ongoing NREL cost analysis
CEMAC | 15
Wind Turbines
Christopher Mone, lead analyst for chapter
Since 2008, the U.S. wind industry has increased its domestic manufacturing
capacity and driven down wind power costs by more than one-third. As noted
in the Snapshot textbox, wind power is now a mainstream power source in the
United States, supplying approximately 4.4% of electricity demand in 2014.
United States investments in wind plants averaged $13 billion/year between 2008
and 2013, and total investments (which include manufacturing, development,
construction, and financial costs) tallied $8.3 billion in 2014, according to the
U.S. Department of Energys 2014 Wind Technologies Market Report (Wiser and
Bolinger 2015). Additionally, 2014 ushered in some of the lowest wind energy
prices ever, with Power Purchase Agreements (PPAs) falling to a national levelized
average of 2.35 cents per kilowatt hour (kWhr), which accounts for a 66% decline
since 2009.
This summary of the global landscape for wind turbine manufacturing is compiled
from published reports and not based on new CEMAC analysis. Our focus will
be primarily on the market and value chain associated with land-based turbines.
Future CEMAC analysis may explore additional segments of the wind power
manufacturing sector, such as nacelles, and may explore additional market
segments such as off-shore wind.
Manufacturing Today
Wind turbines are composed of more than 8,000 individual components, and
about 90% of the value is captured in three main component groups: blades and
hubs, towers, and nacelles (Mone et al. 2015). In 2012, the United States was home
to more than 60 manufacturers devoted exclusively to the wind sector. And in
SNAPSHOT:
Wind Power Market*
Wind power is a mainstream power
source in the U.S. electricity portfolio,
supplying approximately 4.4% of U.S.
electricity demand in 2014
General Electric (GE), Siemens, and
Vestas captured 98% of the United
States market in 2014.
More than half of the content used to
build turbines domestically is built in
the United States to support 7 GW of
domestic manufacturing.
Exports of wind-powered generating
sets from the United States rose from
$16 million in 2007 to $488 million in
2014. Tower exports equated to $116
million in 2014.
Wind sector employment increased
from 50,500 at end of 2013 to 73,000
at end of 2014, a 30% increase.
*Data from Mone et al., 2015
Denmark
United States
Spain
China
S. Korea
Brazil
Wind Component Trade
US Dollars ($)
< 500,000
100,000,000
300,000,000
750,000,000
1,500,000,000
Exporter
Importer
Figure 11. Value of trade in wind components between the United States and top five import markets, 3-year average (20122014)
Opportunity Space
The industry is moving toward longer
blades and taller towers that capture
more energy from the wind as part
of efforts to improve performance
CEMAC | 17
100%
80%
60%
21%
Margin
Labor
40%
30%
Maintenance
Depreciation
50%
Materials
Material Costs
Tooling Costs
Energy
70%
$1,000,000
16%
90%
$1,200,000
8%
$800,000
Labor Cost
$600,000
$400,000
53%
20%
$200,000
10%
$-
0%
U.S. (45 m)
30
40
50
60
70
80
Blade Length (meters)
90
100
Note: The NREL analysis was completed using NuMAD-based modeling and is focused on vacuum assisted resin transfer molding processes. Scaling factors are from an industryvalidated modeling project led by Sandia National Laboratories. The starting mass for the models 5 MW blade point design is 20% higher than some of todays commercial products.
Figure 12. Larger blades increase U.S. manufacturing opportunities as labor becomes a proportionally smaller share of factory gate prices.
Source: James and Goodrich 2013
Manufacturing Today
Today, manufacturing capacity for Li-ion battery cells is heavily concentrated in
East Asia (Figure 13). Currently, China, Japan, and Korea collectively produce 78%
of all Li-ion batteries and 74% of automotive Li-ion batteries.
Like other technologies described in this report, production lines are operating
far below their maximum capacity (Figure 14 and Table 1). Initial overly optimistic
assumptions regarding plug-in electric vehicle demand contributed to over-building
of large format Li-ion battery cell production capacity for automotive markets.
Manufacturing investment incentives have also been made available for capacity
expansions in recent years. In the United States, the American Reinvestment and
Recovery Act of 2009 provided $1.5B to support the expansion of U.S.-based
advanced battery manufacturing. Beginning in the 1990s, the governments of
China, Japan, and Korea set aggressive goals for domestic Li-ion battery production
through tax and other investment incentives, and have more recently supported
consumer electric vehicle adoption (Patil 2008; Pike Research 2013).
SNAPSHOT:
Automotive Li-ion Battery
Cell market
Automotive Li-ion battery demand,
estimated at 17 GWh in 2015, is
expected to more than double by
2020, to 39 GWh and $14.3 billion.*
Competitive locations and
opportunities for automotive Li-ion
battery cell manufacturing are not
indigenous to specific regions and
can be created elsewhere.
Automotive Li-ion battery pack
production may remain proximal
to end-product manufacturing, but
materials and cell production could
locate globally.
Li-ion battery components are not
commoditized; technical and quality
differentiation is possible.
* Sources: Roland Berger 2012; AAB 2014;
CEMAC analysis
CEMAC | 19
United Kingdom
Netherlands
Germany
Canada
S. Korea
United States
Japan
China
Taiwan
Mexico
Malaysia
Lithium Ion Battery Trade
US Dollars ($)
< 500,000
100,000,000
300,000,000
750,000,000
1,500,000,000
Exporter
Importer
Figure 13. Value of trade in lithium-ion battery components between the United States and top five export markets and top five import
sources, 3-year average (20122014)
Share
of Total
Capacity
Automotive LiB
Manufacturing
Capacity (MWh)
Share of
Automotive
Capacity
China
39,010
51%
11,240
41%
Japan
11,978
16%
5,750
21%
Korea
16,059
21%
4,600
17%
U.S.
4,970
7%
4,600
17%
EU
1,798
2%
1,300
5%
Rest of World
2,440
3%
0%
76,255
100%
27,490
100%
Total
Installed Capacity
100%
Production
90%
Utilization
80%
70%
60%
50%
40%
30%
20%
1
0
Regional Utilization
10%
China
Japan
Korea
U.S.
EU
0%
Figure 14. Automotive Li-ion battery cell manufacturing capacity and utilization (2014).
Data sources: Bloomberg New Energy Finance (2014); Pike Research (2013); Advanced Automotive Batteries (2013);
Roland Berger (2012); IEA (2011); CEMAC estimates.
Opportunity Space
To identify the factors that drive
regional competitiveness in automotive
Li-ion battery production, CEMAC
modeled the costs of labor, materials,
facilities, and other factors, and
compared the cost of production of
automotive Li-ion battery cells in six
different manufacturing scenarios,
described in Table 3 (Chung, Elgqvist,
and Santhanagopalan 2015). From
this analysis, CEMAC determined the
CEMAC | 21
Russia
Norway
United Kingdom
Germany
France
United States
South Korea
China
Japan
India
Status
South Africa
Annual MWh
10,000
Fully Commissioned
Partially Commissioned
Under Construction
Announced
6,000
3,000
1,000
< 100
Figure 15. Manufacturing capacity for lithium-ion batteries is heavily concentrated in Asia, though Teslas planned
Gigafactory in Nevada (reflected in yellow) could alter the status quo. Data source: Corporate reporting
Table 2. Manufacturing Capacity for Lithium-ion Cells, Operational, Under Construction, and
Planned, by Country/Region
Fully
Commissioned
(MWh)
Partially
Commissioned
(MWh)
Under
Construction
(MWh)
China
16,704
3,576
18,730
12,847
Japan
10,778
1,200
Korea
16,059
U.S.
3,770
1,200
35,000
EU
1,798
Rest of World
2,440
564
51,549
3,576
21,130
48,412
Total
Announced
(MWh)
$450
$400
$395
$363
$350
2014 USD per kWh
$378
$363
$349
$333
Shipping
(to U.S.)
$300
Margin
$250
Maintenance
Facilities
$200
Equipment
$150
Energy
Labor
$100
Materials
$50
$0
Japan
Korea
China
Tier 1
China
Tier 2
Mexico
Transplant
(Japan)
U.S.
Future
Figure reflects costs modeled using 2014 data. Costs and prices have changed since the original analysis was
performed, and the changes will be reflected in forthcoming CEMAC analysis. Figure reflects costs modeled
using 2014 data. Costs and prices have changed since the original analysis was performed, and the changes
will be reflected in forthcoming CEMAC analysis.
Figure 16. Modeled cost of automotive Li-ion battery packs (2014 USD per kWh).
Source: NREL cost analysis (January 2015)
Scenario
Description
Japan1
Japan / Japan
Korea1
Korea / Korea
China
Tier 11
China / China
China
Tier 21
China / China
Mexico
Transplant
(Japan)2
Japan / Mexico
U.S.
Future2
U.S. / U.S.
Representative scenario
Future scenario
CEMAC | 23
Raw Materials
Processed Materials
Electrodes
Battery Pack
Cells
Total
Value
$168
$28
$229
$571
Share
29%
5%
26%
40%
100%
Currently
Shipped
Globally
Globally
Regionally
Globally
Locally
Success
Factors
Indigenous
resources
Critical to quality
Critical to quality
Critical to quality
Demand assurance
Processing
know-how: e.g.
coating thickness
uniformity, solvent
& moisture content.
Processing
know-how: e.g.
stack uniformity,
drying, formation,
electrolyte
additive
End-product
knowledge and
integration
know-how
Low export
restrictions or
limitations
Cost of capital
Production cost
inputs: e.g. regulatory,
energy.
Proximity to
customers: shipping
costs, exchange
of technical
specifications
* Ex factory gate shipping from Asia to the west coast of the United States adds approximately $7/kWh
Note: $571 represents the lowest minimum sustainable price in actual scenarios at the time of the analysis.
Figure reflects costs modeled using 2014 data. Costs and prices have changed since the original analysis
was performed, and the changes will be reflected in forthcoming CEMAC analysis.
Data sources: CEMAC estimates, BNEF (2014), Pike Research (2013)
Figure 17. Value chain for best-in-class plug-in electric hybrid vehicle lithium-ion batteries 2014 (modeled costs, $US/kWh),
with success factors highlighted.
Carbon Fiber
Sujit Das, lead analyst for chapter
Manufacturing Today
In the generalized CEMAC value chain,
carbon fiber is considered one of the
major advanced lightweight materials,
and CFRP enables the design of critical
subcomponents of the finished clean
energy product. In the initial steps of
carbon fiber production (illustrated
in Figure 18), raw materials like oil
and natural gas are converted into
Numerous parallel filaments are typically grouped together into what is referred to as a carbon fiber tow. The term tow count refers to the number of filaments per tow and is often
expressed with nomenclature such as 24K where the letter K designates the number 1000. Thus, a 24K tow describes a carbon fiber tow having 24,000 filaments. Carbon fiber
having 24,000 or fewer filaments is referred to as small tow. The most common small tow product forms are 1K, 3K, 6K, 12K, and 24K tows. Tows having more than 24K filaments are
referred to as large tow, with 48K and 50K tows being common large tow product forms. However, heavy tows with multiple hundreds of thousands filaments are also available.
1
CEMAC | 25
Raw Materials
Precursor Fiber
Oil:
$0.72/kg
$36/kg
Propylene:
$1.25/kg
Acrylonitrile:
$2.20/kg
Carbon Fiber
Aerospace
$113/kg
Automotive
$25/kg
Wind
Energy
$27/kg
Pressure
Vessels
$30/kg
Intermediate Fiber
$51$424/kg
CFRP Products
Aerospace
$332/kg
Automotive
$100/kg
Wind
Energy
$97/kg
Pressure
Vessels
$102/kg
Figure 18. Value chain for carbon fiber. Data source: Oak Ridge National Laboratory
Prepreg is carbon fiber impregnated with the polymer resin matrix material of CFRP.
United Kingdom
Germany
France
Japan
Hungary
United States
& Mexico
China
S. Korea
Taiwan
Figure 19. Carbon fiber manufacturing production capacity. Data source: Witten et al. 2015
CEMAC | 27
40
35
30
kTonne CF Demand
25
20
Wind Energy
Aerospace
Automotive
Pressure Vessels
15
10
5
0
2006
2008
2012
2014
2016
2018
2020
2022
Table 4. 2014 ITC Trade Map Data for Product Code 681510: Nonelectrical Articles of
Graphite or Other Carbon
Export from
Import to
Europe
Europe
America
Asia
Africa
Japan
312,732
224,160
25,470
29,903
294,565
9,252
101,264
2,586
55,027
America
654,906
Asia
268,404
282,817
Africa
6,333
1,165
772
Japan
123,109
163,011
387,567
71
16,232
2015 U.S. production tax credit extension has not yet been factored into this analysis.
2010
Table 5. U.S. Carbon Fiber Turbine Blade Manufacturing Supply Chain Scenarios Considered
Scenario
Carbon Fiber
Manufacturing
Location
Fabrics/Prepreg
Manufacturing
Location
Blade/Turbine
Manufacturing Location
MUCP: Mexico to
United States
Mexico
US
JEPP: Japan to
United Kingdom
Japan
Europe (UK)
U.S.
U.S.
China
China
$30
$25
$20.66
$19.87
$20
$21.59
Margin
22%
Cost of Capital
Overhead Labor
Maintenance
$15
Building
44%
12%
Tooling
Equipment
$10
Utility
Direct Labor
$5
$0
Materials
Mexico to
U.S.
Japan to
United Kingdom
U.S. to
U.S.
6%
1%
7%
14%
0%
1%
0%
China to
China
Figure 21: CEMAC modeled cost of manufacturing carbon fiber. Data source: Oak Ridge National Laboratory
CEMAC | 29
$250,000
Margin
Shipping
Maintenance
$200,000
Depreciation
Energy
$150,000
Labor
Carbon Fiber
Materials
$100,000
$50,000
$0
Mexico 4 U.S. 4
Central U.S. 4
U.S. Offshore
Japan 4 UK 4
U.S. Offshore 4
U.S. Offshore
U.S. 4 U.S. 4
Central U.S. 4
Central U.S.
China 4 China 4
U.S. Offshore 4
U.S. Offshore
Figure 22. CEMAC modeled cost of manufacturing 61.5m carbon fiber spar cap blade
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Savvantidou, E.L. Morse, and A. Yuen. 2013.
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of Energy Clean Energy Manufacturing Analysis
Center (CEMAC). http://www.nrel.gov/docs/
fy15osti/63354.pdf.
CEMAC | 31
LOOKING
FORWARD
Between 2004 and 2014, investments
in renewables alone, as one component
of the broader clean energy landscape,
jumped more than five-fold, from
$60 billion to $310 billion (Bieter
2015)driven by cost and performance
improvements and supportive policy
environments. Investments in renewable
energy technologies, including
hydropower, could grow to $400
billion by 2030 (IEA 2015), as countries
commit to climate and clean energy
goals outlined in the Paris Conference of
Parties meeting (COP21), as consumers
demand cleaner options, and as
manufacturers and system providers
innovate to provide increased value and
affordable prices.
Over the past decades, manufacturers
have responded to the market growth
opportunities, principally seeking least
cost options to serve both local and
export markets, taking into account key
factors such as labor, cost of capital and
shipping costs.
While the clean energy transition in the
United States and other OECD countries
will continue to confront incumbent
technologies in legacy sectors, the
barriers to entry may be lowerand
CEMAC | 33
Advisory Committee
The CEMAC Advisory Committee composed of experts from industry, trade associations, academia, and government
provides programmatic guidance to CEMAC. Advisory Committee members include:
Tom Catania, Chair
David Eaglesham
Wayne Mays
Swami Venkataraman
University of Michigan
Pellion Technologies
Iberdrola Renewables
Paul Camuti
Steven Freilich
Ken Ostrowski
Charles W. Wessner
Ingersoll-Rand
Independent advisor
Georgetown University
Dylan Cooper
Victoria Gunderson
Ryan Preclaw
Matt Zaluzec
Department of Commerce
Barclays
Phyllis Cuttino
Paul Kaleta
Methodology
CEMAC calculates the cost of
manufacturing clean energy
technologies through the well-accepted
approach of discounted cash flow rate
of return analysis. The result of this
calculation is the minimum sustainable
price, which is the required selling
price of the product necessary for
the operation to achieve a specified
internal rate of return, or discount rate,
on the total investment in capital and
operating expenses. Included in the
calculations are capital costs (i.e., the
costs of purchasing equipment), fixed
operating costs (labor, depreciation,
property taxes, insurance, rent),
variable operating costs (raw material
inputs, supplies, utilities), maintenance
and repairs, interest rate on debt, and
general expenses (administrative, sales,
and R&D costs). Total costs include
balance of system costs that impact the
economic viability of the technology
being studied. In some cases, the
boundary of the analysis is drawn to
include the costs of retrofits, depending
on the market opportunities for the
technology. CEMAC uses the weightedaverage cost of capital specific to the
technologys industry, as the internal
rate of return.
The tradeflow maps included in this
report (Figures 6, 11, and 13) depict
three-year average (20122014) value of
trade flows in each technology between
the United States and major trading
partners. Values were derived from U.S.
International Trade Commission (ITC)
data on imports and exports, organized
by harmonized tariff schedule (HTS)
codes. HTS codes provide a proxy for
selected technologies, but are not an
exact match. For example, ITC data
for solar PV cover PV modules but
not related products like inverters or
mounting hardware.
Acknowledgments
CEMAC appreciates the vision and
support of our primary sponsor, the U.S.
Department of Energy, Office of Energy
Efficiency and Renewable Energy.
CEMAC | 35
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