Photovoltaic (PV) energy payback vs PV input energy due to market growth

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The question of photovoltaic “Energy Payback” has long been settled with modern modules and systems returning their input energy within just a few years or less. Cell and module efficiency have increased and manufacturing energy has decreased. Compared to the expected lifetime of 30 years or more, it is clear that PV systems will produce far more energy than was required to manufacture and install them. From a net energy balance, this is a necessary result to qualify them as a sustainable energy source.

The solar PV industry has been growing at a rate exceeding 35% per annum both domestically and abroad for the last several years (as reported in Photon and PV News market surveys). And well it should, if PV is ever to contribute a substantial fraction of the world’s electrical energy. The International Energy Agency projects that between 2000 and 2030, global energy consumption will increase by 66% (a 1.7% per annum rate), and electricity use could double.

As a proxy, this paper will focus on California’s electrical use and PV market. It will assume that all PV installed in California was produced in-state from in-state materials sources. […]

The concern is that as the industry grows, it will require ever-larger amounts of input energy to produce the new modules. The growth in input energy requirements of the industry may consume a significant fraction of the energy produced, unless more efficient methods for making PV modules and systems are devised.

This paper will show the necessity to move towards technologies that require less input energy, allowing a high rate of growth while providing significant “net new clean energy.” The reasons for this needed shift are both financial and resource efficiency.


PV modules and complete systems take a lot of energy to produce. In 1998 Alsema calculated an energy payback of about 4 years for then current multi-crystalline silicon PV systems, including module, framing, mounting hardware and the energy input to the Balance of System (BOS). In 2000 Knapp and Jester studied an actual manufacturing facility and found that, for single-crystal-silicon modules, the energy payback time was 3.3 years. This includes the energy to make the aluminum frames and purify and crystallize the silicon, but does not appear to include the energy input for the BOS components such as inverters, wiring and mounting structures. The additional energy payback time for the BOS is estimated to be about a half a year.

Accounting for the past seven and five years of process and product development since Alsema’s and Knapp and Jester’s reports, and the lag time of their reports after their data gathering, it is estimated that current systems have an energy payback time of 2.6 years.


Given a stabilized growth rate, and an installed base of PV, if the energy payback time is 4 years, the industry will consume all the energy output of the installed base if it grows at a 25% rate. […]

This becomes a cycle that could continue indefinitely. An example could be: All the modules made to date produce just enough energy to produce this year’s crop of new solar modules.

This year’s crop, plus all the ones made before will produce just enough energy to make next year’s crop, etc.


A long energy payback means a lower industry growth rate can be supported without requiring additional input energy. The Energy Payback period as of 2005 is assumed to be 2.6 years for purposes of the initial analysis. This is an estimation based on the Alsema and Knapp and Jester studies, which are 7 and 5 years old, assuming manufacturing has gotten more efficient in that time.


Industry Growth Rate Reduction Factor: This is the rate at which the industry is estimated to slow down. Large industries tend to grow more slowly than small ones. As of 2004, the PV industry is still considered very small, so a 35% growth rate, while exceptional, is not unheard of. However, at this rate of growth, the industry will soon be large. One reason the industry’s growth must eventually slow is because the input capital requirements will become very large, even by the financial market’s measures. Shell has estimated that at an annual growth rate of 25%, in 10 years, the industry will need $200 Billion in working capital and capital finance funds. For purposes of this study, a 3.5% annual growth rate reduction factor will be applied.

PV Energy Payback Reduction Factor: The industry is getting more efficient at producing wafers, cells, modules, and systems, requiring less input energy and producing more output energy, thus shortening energy payback periods. A 6.0% annual energy payback reduction factor is assumed for our initial analysis. […]


The next 20 years will serve as an incubation period until the production of net new PV energy begins to explode around 2025. By 2055, the PV industry is capable of producing over 40% of California’s electrical energy needs.

Energy payback periods have been steadily improving. The above results can be achieved

sooner by more quickly improving energy payback periods.

Photovoltaic (PV) energy payback vs PV input energy due to market growth


Solar World Congress 2005, Orlando, Florida

© Copyright 2005, Andy Black & the American Solar Energy Society.

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