High Tech Production Still Too Costly in US

An interesting article from the Metrowest Daily News about a tech start up company. Evergreen Solar had an innovative way to produce solar panels. The cost per watt was still higher than the market would bear, but with incentives and subsidies in 2008 they could make it:

Back then, photovoltaic panels - or "modules" - sold for an average of $4 per watt. Still spending $4.35 per watt to make the panels, Evergreen knew mass production was the key to lowering costs. The race was on: Make more. Sell more.

The production strategy worked. Production costs dropped to $2 per panel by the end of 2009. Shipments rose 84 percent to 104 megawatts. By then, the company was supposed to be turning healthy profits, spokesman Chris Lawson says.

But then, competition from China.

As Chinese photovoltaic companies moved into the market, panel sale prices have plummeted to record lows in two short years.
Chinese companies manufacture panels for $1.20 per watt and sell them for $1.60 to $1.70. Evergreen spends $1.90 per watt to make the panels.

Is the difference between the cost in China and the cost in the US due only to labor costs? In a high tech production system, how much of the cost per watt is due to labor?

Read more: The eclipse of Evergreen Solar - Framingham, MA - The MetroWest Daily News http://www.metrowestdailynews.com/archive/x945640045/The-eclipse-of-Evergreen-Solar#ixzz1FsRQlnjO