Strategies To Reduce Costs Of Solar Panel Production

How To Reduce The Costs Of Solar Panel Production

Investing in a solar module production business can cost anywhere from $100,000 to a few million dollars depending on the size of the project. With that being said, reducing costs of solar panel production can have a huge impact on improving the return on investment.

In this article, we look at several cost-saving strategies for solar module production.

analyze production processes 

One of the first things to consider when looking for ways to reduce the costs of solar panel manufacturing is production processes. Analyzing production processes can help to reduce costs by identifying inefficiencies and opportunities for improvement. 

Analyze the system thoroughly to identify where time and resources are being wasted. Then make changes to eliminate inefficiencies, which will lead to eventual cost reductions. This could be in areas such as materials, labor, and energy. 

lean manufacturing 

Lean manufacturing is a method of production that seeks to eliminate waste, maximize efficiency, and reduce costs. The idea behind lean manufacturing is to eliminate any activity that does not add value to the product.

For example, by utilizing advanced production techniques manufacturers can reduce the amount of time and materials needed to produce solar panels. In addition, by using cheaper energy sources like solar, manufacturers can reduce the cost of energy used in production. 


Automation can be used in solar panel production. It reduces labor costs by eliminating the need for manual labor on certain tasks. 

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For example, robots can be used to perform repetitive non-critical tasks like assembling solar panels, reducing the need for human workers. Eliminating manual work will increase productivity, allowing manufacturers to produce more solar panels in less time and with fewer workers.

Furthermore, automation can be used to reduce production errors in PV manufacturing by increasing accuracy and precision in the production process. Automation can use sensors, vision systems, and other technologies to detect and correct errors.

By replacing manual labor with robots, automation can reduce human error, which is a leading cause of production errors. By eliminating human error, manufacturers can reduce the number of defective products and increase yields, resulting in cost savings.

A fully automated solar panel production line

negotiating with supplier 

Negotiating with suppliers can be an effective way to reduce costs in solar panel production. Negotiating supplier terms can help a business secure better deals. This includes price, delivery time, and payment terms. Reducing costs is the ultimate goal. 

Negotiating with suppliers can also help a business to reduce the risk associated with suppliers, such as ensuring that suppliers follow safety regulations and quality standards. 

Additionally, negotiating with suppliers can help a business to consolidate its supply chain, which can reduce costs of solar panel production by streamlining the procurement process or reducing the number of suppliers.


Finally, negotiating with suppliers can help a business to obtain buyer’s credit, which can reduce the financing costs for solar panels. Additionally, low-cost suppliers may offer longer payment terms or discounts for bulk orders.

applying for financial incentives

Many countries like Germany, Spain, the USA, and more offer renewable energy manufacturers with financial incentives that can off set the cost of their operations. There are many such incentives that can take the shape of subsidies or cheap loans.

Researching and taking advantage of these incentives can have a massive impact on reducing the cost of solar panel production.

minimize inventory 

Minimizing inventory can have a significant impact on reducing costs, as it reduces the need for storage space, reduces the risk of possible inventory obsolescence, and reduces the amount of inventory that needs to be managed. 

Taking a lean approach to inventory can reduce costs associated with inventory damage, insurance costs, and theft.

outsource non-critcal functions

Outsourcing non-core production processes can help to reduce costs by taking advantage of economies of scale, reducing labor costs, and reducing the need to invest in expensive equipment. 

Additionally, outsourcing can help to reduce costs associated with delays, as outsourcing can help to ensure that products and services are delivered on time. Aside from this, there is also less need to carry more inventory if part of the production is outsourced. 

This leads to cost reductions being realized by reducing the need to spend on insurance, storage space, and the other costs associated with maintaining inventory.


Automation, lean manufacturing, outsourcing, minimizing inventory, financial incentives, streamlining production, and negotiating with suppliers. These are some of the best ways of cut the costs of solar panel production and improving the profitability of a solar manufacturing business.

Not all of them will be applicable in all situations. It’s important to try each of them individually to see what type of results they will produce based on the context of your project.

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