The Potential Impact of                                                           PV Soft Costs                           ...
Outline• Why we should care about non-  hardware “soft” costs for PV systems.• Benchmarking non-hardware costs in  the U.S...
There is More to a System than Hardware                                5) Monitor                                performan...
Ex: Permitting, Inspection, Interconnection (PII)          The Problem : Inconsistent PII requirements,            delays,...
NREL Recently Benchmarked “Soft” Costs• Benchmarked 2010 non-hardware balance of system (soft-  BoS) costs and integrated ...
2011 Residential Total Installed PV System Price                         $8.00                              Financing     ...
2011 Residential Non-Hardware Breakdown                                                           Installation Labor• Samp...
Soft Costs: U.S. vs. Germany  Residential Installed PV System Prices in the            U.S. and Germany, 2011             ...
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Robert Margolis - GW Solar Symposium 2012

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Robert Margolis - GW Solar Symposium 2012

  1. 1. The Potential Impact of PV Soft Costs George Washington University 4th Annual Solar Summit Robert Margolis Kristen Ardani April 12, 2012NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.
  2. 2. Outline• Why we should care about non- hardware “soft” costs for PV systems.• Benchmarking non-hardware costs in the U.S.• With rapid decline in hardware costs, reducing soft-cost is becoming increasingly important. 2
  3. 3. There is More to a System than Hardware 5) Monitor performance $$$ 4) Inspect and interconnect 3) Permit and install - 2) Finance your system1) Choose • In the U.S., the process of selecting an installerinstaller through commissioning and operating a PV system can add significant time and cost to project completion. • Inefficient supply chains, O&M, and delays can also increase cost.  Need for streamlined processes. 3
  4. 4. Ex: Permitting, Inspection, Interconnection (PII) The Problem : Inconsistent PII requirements, delays, and lengthy wait times are costly. • 18,000+ local jurisdictions with different PV = permitting requirements. • 5,000+ utilities with interconnection standards and net metering programs. ≠ Permitting fees vary widely across the U.S. ex) for 5kW system: ≠ • Typical permit fees are $200-$450/install (as high as $2000/install).  Currently in the U.S. PII typically range from $0.15/W to $0.25/W, and can be as high as $0.5/W depending on jurisdiction. Uniform processes 4
  5. 5. NREL Recently Benchmarked “Soft” Costs• Benchmarked 2010 non-hardware balance of system (soft- BoS) costs and integrated into bottom up PV system price model.• Distributed an online data collection tool to residential and commercial PV installers. • Data collection focused on annual/per install labor hours expended on specific tasks to capture time and cost of PV business process.• Data has been processed to estimate the cost/W for: • Installation • Permitting, Inspection, Interconnection • Customer acquisition • Financing 5
  6. 6. 2011 Residential Total Installed PV System Price $8.00 Financing $7.00 Marketing and $6.35 Advertising $6.00 System Design NREL Data Collection $5.00 Customer Acquisition $U.S./Wp DC $4.00 Permitting, Inspection, Interconnection (PII) $3.00 Installation Labor $2.00 Profit on Materials (Materials Profit) $1.00 Profit on Installation Labor (Labor Profit) $0.00 Sales Tax (5%) Module, Inverter, Installation Materials (Hardware)• Total non-hardware BOS (including profit) $3.35/W; approx 54% of total price• NREL data collection non-hardware BOS $1.78/W; approx 53% of total non-hardware BOS 6
  7. 7. 2011 Residential Non-Hardware Breakdown Installation Labor• Sample main point Permitting, Inspection, Interconnection Labor 2% 9% o Sample sub-bullet Permit fee ($431) 1% – Sample sub-bullet Customer Acquisition and System Design  Sample sub-bullet 11% Non- Hardware Profit on Labor Hardware 5% 46% 54% $3/W $3.35/W Profit on Materials 15% Sales Tax 5% Financing 4% 7
  8. 8. Soft Costs: U.S. vs. Germany Residential Installed PV System Prices in the U.S. and Germany, 2011 • There is ~$2/W difference in installed system price between the U.S. and Germany. • Minimal and streamlined processes in Germany. • More developed supply- Soft Costs chains, distribution channels, Soft and competition in Germany. Costs • Quotes for PV systems in the U.S. continued to decline by ~$1.30/W between Q4 2010 and Q4 2011, mostly due to module cost declines.Source: NREL and LBNL 8
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