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Why are Solar Panels so Expensive?

People often ask me “Why are Solar Panels Expensive?” and I thought it is best to explain it here once and for all.

Most people think that a Solar Panel is just Silicon Diodes. So let me explain what a Solar Panel is made up of:

  1. Silicon Diodes
  2. Aluminum Frame
  3. Glass Protective Layer

The Silicon Diodes take up about 50% of the total cost. The rest of the expense is in commodity metals like Aluminum. The prices of these other metals are pretty stable over a period of time.

The Silicon Part of the Solar Panel, of course follows Moore’s law.

Also, the problem lies in the efficiency of the Absorption co-efficients. Most diodes in commercials panels are pretty in-efficient.

This means: Only 18 to 21 % of energy is absorbed and converted to electricity at STC, in the field they absorb abysmal <15%

These factors make per-watt cost of Solar Panel more expensive.

If we just double the panel efficiency, we could use 50% less aluminum, 50% less glass and 50% less silicon for the same wattage.

So instead of ‘Why?’, the real question should be..

How can we make Solar Panel less expensive?

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