Criticality signals from metal price fluctuations with a focus on photovoltaics

The cost decline observed in renewable energy technologies such as photovoltaics (PV) was possible due to ongoing research, production and installation experience, and scale economies. However, there may be materials... [ view full abstract ]

The cost decline observed in renewable energy technologies such as photovoltaics (PV) was possible due to ongoing research, production and installation experience, and scale economies. However, there may be materials constraints that could slow down or reverse these cost reductions. In this paper, we evaluate metals in terms of the cost-riskiness they bring to the technologies they are used in. What signals do we get from metals price fluctuations that indicate risks of using these materials in a technology? We first highlight the differences between major metals and byproducts in terms of price dynamics by analyzing their price trends and the fluctuations around these trends. We then analyze how much cost riskiness these metals bring to PV technologies.

This work develops and applies cost-riskiness metrics to evaluate metals criticality. We use historical price and production data for 35 metals over the last 40 years (1973-2012). This approach allows for comparing metals to one another and characterizing the evolution of metals production sector as a whole.

We quantify low-frequency changes from moving averages and high-frequency changes from volatilities in the historical data. Price reflects the interactions between demand and supply. Changes in price can act as an indicator of risks in the metals production system. 

Major metals have low price and high production, and tend to have lower price volatility compared to other metals. In contrast, we find that byproduct metals have high price and low production, and tend to have higher price volatility. Their supply is less responsive to price signals because byproducts represent a small fraction of suppliers’ revenues, and thus have little impact on decisions about the level of production.

To compare the cost-riskiness of different PV technologies, we treat each technology as a portfolio of metals. We obtain an aggregate score for each technology by weighting the price and price volatility of its input metals. We find that the thin film technologies CdTe and CIGS have relatively high price volatilities mainly because of their reliance on byproduct metals. GaAs, CIGS, III-V MJ, c-Si have higher weighted prices, because they use byproduct metals with high prices. CZTS, perovskites and quantum dot cells have both low average price and price volatility, since they use major metals, however they haven’t been fully commercialized yet.

This analysis focuses on a particular definition of metals criticality, namely the risks that metals price fluctuations can cause to technologies. It can serve as a first-pass assessment of metals criticality from the perspective of technology costs (such as PV costs). This approach can complement the more detailed criticality assessments published in earlier work, as well as evaluations of materials availability for PV and other technologies.