February 2, 2023

Solar Panel Manufacturing Plant (Cost Breakdown)

You want to start a solar panel manufacturing factory? On this site we will give details for the costs of:

  • Machinery costs for solar panel manufacturing equipment (investment)
  • Costs for building for your solar module production line (investment)
  • Costs for infrastructure (investment)
  • Cost for material in stock (working capital)
  • Cost for production per watt (material cost + operating costs)

Also working capital is needed for the solar production because you will have to buy materials first, than produce the panels and after you can sell it. Also for material working capital we will make rough estimations here in this article, however: Please have in mind that these are not real costs but only cash flow that you need for production.

Different Sizes for PV Production Plants

Solar (PV) production machines have a wide range for the size. You can start with a very small line (for example 25 MW) with refurbished equipment or you decide for brand new machines.

Brand new machines are reaching from 50 MW (smallest size) to fully automated line with 1 GW or more!

A smaller plant like a 25 MW plant will require a smaller investment. A good size to start with for new equipment will be 100 MW or more.

In this article we will discuss about the following examples:

  • 25 MW line with refurbished equipment
  • 100 MW line with new machines
  • 600-800 MW line new, fully automated line

Of course we are offering customized solar module production lines for all sizes and demands, if you are interested in a customized offer for you, please send a request with our contact form >>

Machinery Investment for a Solar Module Production Line

The investment that you need is depending on three main points:

  • Refurbished machines (cheaper) or new equipment (more options)
  • The size of the solar module manufacturing line
  • The automation of the solar module production 

Refurbished Machines 

For refurbished machines you can lower your investment a lot: Fir example a line with 25 MW you will need an invest of only 250.000,00 € (twohundredfiftythousand) for the machines. However you will be limited in the panel types you can produce and will not be able to produce the latest technology.

On the other hand this is a good opportunity to start production, test the market and start sales - without having a very big risk of a big invest.

We recommend refurbished equipment if you want to get into the market, learn the process and if you do not want to invest and risk too much money.

Especially in Areas where the salaries are low and the market is asking for smaller sized panels, refurbished solar machineries can be a very good opportunity to start!

New Machines for Solar Module Production

If you want to start with the latest technology and a high automation, than you have to go with new machines for solar production. The new machines will be able to produce latest technology, for example:

  • 650 (and more) watt panel design (210 mm wafer)
  • 550 (and more) watt panels design (182 mm wafer)
  • Half cut designs
  • Third cut designs
  • All technologies like PERC, PERCT, TopCon, HJT
  • Multi bus bar technology

Also automation degree will be much higher than for refurbished equipment - however the price will be much higher.

You can start with a new line from about 50 MW but 100 MW will be more effective. 

Just to make an example for a medium automated 100 MW line, you have to calculate with about 1,5-2 million Euro. Of course prices are variating based on automation and technology. If you are interested in an offer for a new line, please make a request and with your size that you want to go for and we will make an individual offer: Contact >>

Building Investment for a Solar Panel Factory

Additional to the machinery investment, you have to consider the investment you need for the building, for:

  • Production area where you place the machines
  • Stock for incoming material
  • Stock for outgoing material (ready made panels)
  • Infrastructure (air condition, compressed air, electrical power supply)

Here we will give you some examples for 3 typical solar module production line sizes:

20-25 MW Refurbished Equipment Solar Factory

For a small production line, refurbished - in our opinion - it makes no sense to create building by yourself, because:

  1. Its needed a small building only, for example about 500-800 sqm.
  2. Most likely you will extend your factory in the future and than your building is way too small for a new line

So lets calculate that you rent a building and only invest in the infrastructure about 100.000, 00 € (onehunderedthousend).

100 MW New Solar Factory

It might be hard to find a building that matches to your 100 MW line. Of course you can rent a building as well, but - in pur experience - most investors want to create a new building for a new 100 MW solar production line.

For 100 MW including stocks and offices, you have to make a building of about 1.000 sqm. Of course prices are variating based on the country where you want to place the building, but let's calculate with about 1.5 million €.

600-800 MW New

With a factory capacity of up to 800 MW, you will need a building of about 5.500 sqm wich is equal to about 6 million € of costs.

Invest for Prefinancing

As for every business, you will also need money for the start, for:

  • Working capital (materials for solar module production)
  • Starting salaries (for example in the building phase)
  • Starting losses (when you ramp up the factory)

Again we will give rough figures for the 3 typical sizes we are discussing here in this article:

20-25 MW

Small line need also small money for working capital, our rough figure is 100.000,00 € (onehunderdthousand).

100 MW Line

For a 100 MW line we are calculating with a bit more stock to lower the risk for possible production stop, so you can calculate with about 800.000,00 € (eighthundredthousand).

800 MW Production Line

To make sure you have enough stock to not have to stop production because of lack of material, you should calculate with about 6.5 million € for working capital including material in stock.

Manufacturing Cost: Material

Percentage of Material compared to total production costs of solar modules

For solar panels the cost for materials are more than 95% of the total production costs, so it's the dominating factor of solar module production.

95% of production costs are material costs

Manufacturing costs of solar module production

Materials for Solar Panel Manufacturing

The following materials are needed for your solar module production factory:

  • Glass for front side
  • Embedding foil 1
  • Solar cells
  • Ribbons (connector wires for the solar cells)
  • Interconnection ribbons (the bussing ribbon to connect the strings)
  • Embedding foil 2
  • Backsheet (or backside glass for glass-glass-panels)
  • Junction box and diode and connectors
  • Aluminium frame set

The main costs for the material are solar cell (more than 40%), glass (about 20%), aluminium (14%). Below you can find a picture with a percentage of each material:

Material costs of solar manufacturing by percentage

Relative costs of each material for solar module production manufacturing

Manufacturing Cost: Overheads

Overheads Cost Definition

The overheads are the operating expenses of factory and are mainly consisting of:

  • Human ressources
  • Depreciation of CAPEX (machines, building, other investments)
  • Running costs of factory (maintenance, energy costs, financing costs and so on)

While material was a major cost factor in the production, the overheads are - based on the size of the production - between 3 and 12 % of the total manufacturing costs.

Overheads Cost by Factory Size

Below you will find rough estimations for the overheads in US-Dollar-Cent per each watt for different factory sizes:

  • 25 MW factory: Overheads between 1-2 Dollar Cents / watt
  • 100 MW factory: Overheads costs about 1 Dollar Cent / watt
  • 400 MW factory: Overheads about 0,5-0,9 Dollar Cent / watt
  • 800 MW factory or above: Overheads about 0,5 Dollar cent / watt or lower!

Please note: The quality of the equipment you buy is only a small part of production costs! Based on the produced watt a high quality production line with 500 MW or more from Germany compared to a cheap low quality line from China will make nearly no difference in the cost / watt for produced solar panel!

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