Solar Power » Industry

The Solar Value Chain:


Value Chain Segments & Activities


There are distinct segments within the whole eco-system of solar power, starting from the manufacturing of equipment and module production all the way to the installation and operation. Among them are also activities that span the whole lifecycle such as consulting and financing as well as publishining and training. The main products of the manufacturing process are polysilicon, wafers, cells, modules, mounting and tracking systems and electrical components. Services include project development, wholesale distribution, design, engineering, construction and maintenance.

Solar Value Chain Activities

Solar Value Chain Players

Value Chain Player Matrix These segments correspond to activities with very different industrial dynamics. Players can be categorised by the degree of vertical integration as well as diversification as follows:

Diversification: Pure-play versus Conglomerate

While there is a significant number of companies that focus exclusively on solar electricity or renewable energies, many newcomers are large corporations for whom solar is one market of many.

Vertical Integration

Most companies are partially vertically integrated in order to capture more stable value. As the whole industry develops, vertical integration becomes more feasible. However, no group covers the whole value chain today, whilst there are many highly specialised companies upstream (Q-Cells, RSI Silicon) and in the more service-oriented downstream segment.

Where is the value created?

Value Creation across Photovoltaics

Whilst prices for materials have been changing dramatically in 2008/09, here is a rough guideline for crystalline silicon modules.

70% of the cost of a system is for the module itself. Within the module, 50% of the cost is for the production of the silicon wafers. This is a huge amount.

In thin-film modules, material costs weigh in much less, though other components such as mounting systems may be more expensive per kWp, as more space is required.

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