Metal Trade Show | Rethinking Solar Costs: Aluminium Frames Redefine Profit Margins in the PV Industry

At the recent annual conference of the China Photovoltaic Industry Association (CPIA), a renewable energy analyst from a prominent publicly traded securities firm—known for its robust asset quality and innovative capabilities—highlighted notable cost shifts within the solar energy sector. The event, held earlier this month, emphasized the rapidly evolving dynamics of the industry. As a key exhibition in the field, the Metal Trade Show remains attuned to such developments, providing industry professionals with timely insights.

According to the analyst, secondary materials have emerged as a major factor reshaping the cost structure of the solar panel industry in 2024, driving production expenses to new levels.

A report from SinoLink Securities revealed that by November 2024, aluminium frames had become the most expensive component in solar panel manufacturing, accounting for 14% of total production costs. Close behind were packaging glass at 13.4% and silver paste at 11.6%.

Polysilicon, historically the dominant contributor to production costs, has dropped to fourth place, making up 9.9% of the total. This marks a significant change from late 2023, when glass led with 16.4% of costs, followed by polysilicon at 14.1%, and aluminium frames at 12%.

The rising cost of aluminium frames has been attributed to soaring aluminium prices, despite reductions in processing fees driven by expanded production capacity and mounting cost-cutting pressures. This trend has significantly impacted overall manufacturing costs.

To counter these challenges, manufacturers are exploring alternative materials. However, concerns about the reliability of these substitutes have slowed their widespread adoption. Concurrently, efforts to standardize designs and minimize material usage are being pursued as long-term solutions for cost reduction.

Global solar installations are projected to grow at an annual rate of 10% to 15% through 2025, driving demand for photovoltaic (PV) panels to an estimated 650 to 700 gigawatts peak (GWp). This surge in demand underscores the critical need for cost-effective solutions within the PV industry.

The evolving role of aluminium frames in the solar industry highlights the delicate balance between innovation, material costs, and the drive for sustainability. As the industry navigates these complexities, platforms like the Metal Trade Show play a pivotal role in fostering collaboration and advancing shared solutions for a brighter, more sustainable future.