February 2, 2023

Solar Panel Manufacturing Plant Cost Breakdown

Do you want to start a solar panel manufacturing factory and you need an in-depth solar panel manufacturing plant cost breakdown? If yes, then you are at the right place. In this article, we will give details of the following costs:

  • Machinery costs for solar panel manufacturing equipment (investment)
  • Costs of 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)

Working capital is necessary for solar panel production because you need to purchase materials first, then produce the panels before you can sell them. In this article, we will make rough estimations for material working capital. Please keep in mind that these figures represent cash flow requirements for production, not actual costs.

Different Sizes for PV Production Plants


Solar (PV) production machines come in a wide range of sizes. You can start with a very small line (for example, 25 MW) using refurbished equipment, or you can opt for brand new machines.

Brand new machines range from 50 MW (the smallest size) to fully automated lines with 1 GW capacity 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 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; therefore, 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 depends 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 significantly lower your investment. For example, a line with 25 MW capacity would require an investment of only 250,000.00 € (two hundred fifty thousand euros) for the machines. However, you will be limited in the panel types you can produce and will not be able to manufacture using the latest technology.

On the other hand, this is a good opportunity to start production, test the market, and begin sales without taking on the significant risk of a large investment.

We recommend refurbished equipment if you want to enter the market, learn the process, and avoid investing and risking too much money. Refurbished solar machinery can be an excellent opportunity to start, especially in areas with low salaries and markets demanding smaller-sized panels.


New Machines for Solar Module Production

If you want to start with the latest technology and high automation, then you need to opt for new solar production machines. These new machines will be capable of producing the 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

Automation will be significantly higher for new equipment compared to refurbished units, but the cost will also be substantially greater.

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

For example, a medium automated 100 MW line would cost approximately 1.5-2 million Euros. Prices vary based on the level of automation and technology used. If you are interested in an offer for a new line, please make a request with the desired size, and we will provide 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, refurbished production line, we believe it doesn’t make sense to construct a building yourself because:

  1. Only a small building is needed, for example, about 500-800 sqm.
  2. You will likely extend your factory in the future, and then your building may be too small for a new line.

Therefore, let’s assume you rent a building and only invest in the infrastructure, which would cost approximately €100,000 (one hundred thousand euros).


100 MW New Solar Factory

It might be challenging to find a building that matches your 100 MW line. While renting a building is an option, in our experience, most investors prefer to construct a new building for a 100 MW solar production line.

For a 100 MW line, including storage and office space, you would need a building of about 1,000 sqm. Prices vary based on the country where the building is located, but let’s estimate the cost at approximately €1.5 million.


600-800 MW New

For a factory with a capacity of up to 800 MW, you will need a building of about 5,500 sqm, which would cost approximately €6 million.

Invest for Prefinancing


As with any business, you will need initial capital for:

  • Working capital (materials for solar module production)
  • Initial salaries (e.g., during the building phase)
  • Initial losses (as you ramp up the factory)

We will now provide approximate figures for the three sizes specifically discussed in this article.


20-25 MW

A small production line also requires a small amount of working capital. Our rough estimate is €100,000 (one hundred thousand euros).


100 MW Line

For a 100 MW line, we are calculating with a bit more stock to lower the risk of potential production stoppages. Therefore, you can estimate the cost to be approximately €800,000 (eight hundred thousand euros)


800 MW Production Line

To ensure you have enough stock to avoid stopping production due to a lack of materials, you should estimate approximately €6.5 million for working capital, including materials in stock.

Manufacturing Cost: Material


Percentage of Material Compared to Total Production Costs of Solar Modules

The cost of materials for solar panels constitutes over 95% of the total production costs, making it the dominant factor in solar module production.

solar panel manufacturing plant cost breakdown

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 materials are solar cells (more than 40%), glass (about 20%), and aluminum (14%). Below, you can find a picture showing the percentage of each material.

Material costs of solar manufacturing by percentage

solar panel manufacturing plant cost breakdown of the total material costs

Manufacturing Cost: Overheads


Overhead Cost Definition

The overheads or overhead costs are the operating expenses of a factory and mainly consist of:

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

While materials are a major cost factor in production, overhead costs range from 3% to 12% of the total manufacturing costs, depending on the size of production.


Overhead Costs 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 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 wattage, a high-quality production line with a capacity of 500 MW or more from Germany compared to a low-quality, cheaper line from elsewhere will result in nearly no difference in the cost per watt for the produced solar panels.


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