The impact of efficiency on area-related system costs

There is an ongoing debate within the photovoltaic (PV) industry as to how significantly PV module efficiency impacts the installed cost of a PV system. This paper examines key factors and, through examples, concludes that under current economics, efficiency is generally not the dominant factor affecting overall cost. However, the paper also notes a variety of exceptions in which efficiency can become a principal cost driver. Therefore, in the absence of a reliable rule of thumb to guide design decisions, the paper identifies the technical and economic conditions under which efficiency has the strongest impact on overall cost.