Article

Tracking the Sun: The Installed Cost of Photovoltaics in the U.S. from 1998-2007

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Abstract

As installations of grid-connected solar photovoltaic (PV) systems have grown, so too has the desire to track the installed cost of these systems over time, by system characteristics, by system location, and by component. This report helps to fill this need by summarizing trends in the installed cost of grid-connected PV systems in the United States from 1998 through 2007. The report is based on an analysis of installed cost data from nearly 37,000 residential and non-residential PV systems, totaling 363 MW of capacity, and representing 76percent of all grid-connected PV capacity installed in the U.S. through 2007.

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... In addition, c-Si and CdTe panels in Europe have a current cost of around W 0.62 €/ p , whereas a-Si is around W 0.44 €/ p [74][75][76]. For most PV power plants, the cost of PV panels and inverters account for over half the upfront costs [77][78][79][80], while the other components of the initial investment costs are associated with the installation labour costs, other material costs (components required for mounting and racking the PV system, electrical components…), overhead costs and regulatory compliance costs. Due to economies of scale, the size of the PV power plant has a notable effect on the cost of the installation. ...
... Due to economies of scale, the size of the PV power plant has a notable effect on the cost of the installation. Smaller systems -several kW-exhibit higher installation costs than larger systems -MW-range-, accounting for a 25% reduction in some cases [78,33]. In [81] is analysed the evolution of the PV power plant installation cost in Spain, from 1998 to 2013, depending on the PV plant capacity. ...
... Upfront costs also vary by country [82,83,62,66,84,14,85]. For example, the installation cost for small PV systems in 2007 was larger in the U.S. than in Germany [78], which may be partly due to the greater cumulative grid-connected PV capacity in Germany. ...
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... For most solar PV installations, the cost of PV panels and inverters can account for over half the costs (Ventre et al., 2001;Wiser et al., 2009;IRENA, 2012;Ossenbrink et al., 2013;Wirth, 2016). In 1996, the average price for c-Si modules was around 3.50 €/W p (Kumar, 2015). ...
... Due to economies of scale, the size of the PV power plant has a notable effect on the cost of the installation. Smaller systemsseveral kWexhibit higher installation costs per kW than larger systems -MW-range -, accounting for a 25% reduction in some cases (Wiser et al., 2009;Tyagi et al., 2013). ...
... Upfront costs are also highly dependent on the country (Novãk et al., 2011;Neubourg, 2014;IEA, 2015c;Tselepis, 2015;Huijben et al., 2016;Papadelis et al., 2016). According to the study conducted by Wiser et al. (2009), the installation cost for small PV systems in 2007 was larger in the U.S. than in Germany, which may be partly motivated by the greater cumulative grid-connected PV capacity in Germany compared to the U.S. This is in line with the information from the report of IRENA (2012), which shows that from 2009 PV panels are around 15% more expensive in EU than in the U.S. ...
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... The market for PV systems is global and driven by public policy initiatives (Jennings et al., 2008;Wiser et al., 2009). Feed-in tariffs, renewable energy portfolio standards, tax credits, and rebates create a demand-side pull that accelerate the accumulation of PV installations. ...
... The approach to quantifying benefits was conceptually the same. 35 Wiser et al. (2009) reviewed the installed cost of 363 MW of grid-connected residential and nonresidential PV systems from 1998 to 2007. The authors reviewed installed cost reductions from gains in nonmodule PV system components and reviewed how wide-ranging and intermittent federal, state, and local rebates and incentives influenced the installed cost over time. ...
... In their introduction, the authors highlight the more than 20-year role of public-sector financing in supporting the industry and improving the risk profile to the point where professional investment groups were willing to invest. Both Wiser et al. (2009) andJennings et al. (2008) underscore the historical importance of demand-side incentives for building the market for and demand for PV systems. ...
... System cost reductions are also correlated with PV market expansion [98,99,101]; a more developed PV market will tend to be characterized by: Greater competition among system developers and installers, which reduces margins ...
... The former are on average cheaper than the latter, as system price does not scale linearly with system size. 7 Similar trends have been found in US PV system prices [98,99,101]. ...
... PV module prices have been 90% and 180% of global average module price in countries with PV markets above 100 MW/y and below 5 MW/y, respectively.5 Similar patterns are reported in the USA, as highlighted in[98,99,101] ...
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... However, the overall lifetime of the current inverter products are difficult to predict, as these products have not been available long enough to obtain their lifetime results (Deline et al., 2011). According to the literature (Barbose et al., 2010; Branker et al., 2011; Zweibel, 2010) the replacement cost is assumed to be 9% of the initial investment of the system. The inverters selected for this work are the SMA – Sunny boy 1300TL and 5000TL since they present the best efficiency values (SMA, 2012) with efficiency values of 94.6% and 97.5% respectively. ...
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Article
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... Similarly, production of lower purity, and thus cheaper solar-grade silicon is now profitable because plants can be built at large scales. Economies of scale in unit size are also now observable: large installations show much lower costs per watt than do small residential systems (Wiser, Barbose, and Peterman, 2009 ). Increasing installation size is likely to become more important as economies of scale reduce module manufacturing costs, leaving installation costs as an increasingly large share of system costs (with total costs comprising module costs and "balance of system" costs including hardware, mounting, and installation). ...
... More recently, work at Lawrence Berkeley National Laboratory has documented the cost of U.S. installed systems from 1998 to 2010 (Barbose et al., 2011 ;Wiser et al., 2009 ). System costs have fallen from more than $10,000/kW in 1998 to $6,200/kW in 2010, with an unusually large decline during 2010. ...
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... To provide some perspective, the 2007 installed cost for large scale PV was reported to average $6.80/W [15]. As PV costs per Watt are fairly independent of efficiency [15,16] this is roughly $680/m 2 for a 10% efficient module, which we can estimate from the discussion above as giving a 5% system efficiency. This contributes over $11/gal to the price of fuel production, and is an optimistic assumption as it is based on peak numbers. ...
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... The Green-X database on potentials and cost for RES technologies in Europe The process included besides a survey of related studies (e.g. Krewitt et al. (2009), Wiser (2009) and Ernst & Young (2009)) also data gathering with respect to recent RES projects in different countries. ...
... This reduction in investment cost marks an important departure from the trend of the years 2005 to 2007, during which costs remained flat, as rapidly expanding global PV markets and a shortage of silicon feedstock put upward pressure on both module prices and non-module costs (see e.g. Wiser et al 2009). Before this period of stagnation PV systems had experienced a continuous decline in cost since the start of commercial manufacture in the mid 1970's following a typical learning curve. ...
... The electricity generation cost of fully installed systems is what matters most because, ultimately, technology adoption decisions are based on the cost of electricity produced. Lawrence Berkeley National Laboratory has documented the cost of installed systems in the 2000s (Wiser et al., 2009). They found that costs have fallen from over $10 W À 1 in 1998 to under $8 W À 1 in 2007. ...
... Similarly, production of lower purity, thus cheaper, solar-grade silicon is now profitable because plants can be built at large scale. We also have begun to observe some economies of scale in unit size, where large installations show much lower per watt costs (Wiser et al., 2009). Increasing installation size is likely to become more important as economies of scale reduce module-manufacturing costs, leaving installation costs as an increasingly large share of system costs. ...
Chapter
The cost of photovoltaics (PV) has declined by a factor of 100 over the past four decades, more than any other energy technology. This cost trajectory appears to very closely fit a learning curve, in which a power law is used to related costs to cumulative experience in production. However, the cost-reducing mechanism behind the learning curve, learning by doing, does not account for all of the observed cost reductions. Efficiency improvements, economies of scale, market structure, and spillovers from other industries have also affected the costs of PV. Analysis of patents for PV shows that the most important ones do not only emerge from experience in production. Important policy implications emerge from the finding that factors other than increasing demand affect costs. Analytical models are being developed that aim to inform policy decisions related to PV by taking into account this broader set of factors, eliciting expert judgments, and addressing uncertainty in outcomes.
... Ultimately, because technology adoption decisions are based on the cost of electricity produced, the cost of fully installed systems is what matters most. Recent work at Lawrence Berkeley National Laboratory has documented the cost of installed systems in the 2000s [4]. Costs have fallen from over $10 W −1 in 1998 to under $8 W −1 in 2007. ...
... Similarly, production of lower purity, thus cheaper, solar-grade silicon is now profitable because plants can be built at large scale. We also have begun to observe some economies of scale in unit size, where large installations show much lower per-watt costs [4]. Increasing installation size is likely to become more important as economies of scale reduce module-manufacturing costs, leaving installation costs as an increasingly large share of system costs. ...
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... First, we estimate a production of energy during the 20 years of panel lifetime that is, on average, the same as the one produced in the previous years since the installation at The Dalton School. Second, the investment cost is based on the results by Wiser et al. that investigated the cost of PV panels in the USA [27]. The value that emerges from their analysis, considering the cost for PV panels, inverters, and installation once the incentives applied by the U.S. government are subtracted, is $5.10 per installed watt. ...
... Another component that might be associated to operation and maintenance costs is the replacement of inverters, which, as suggested by Croxford and Scott, should be considered every ten years [29]. According to the findings of Wiser et al., inverter replacement amounts to about 7% of the initial investment in a PV project for residential and small commercial purposes [27]. ...
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... Installed Cost and Incentives for Residential PV Systems, Installation Cost and Incentives for Commercial PV, 2007Source:Wiser et al, 2009. ...
... After-Tax State/Utility Cash Incentives plus State & Federal Investment Tax Credits (Estimated) Pre-Tax State/Utility Cash Incentive Levels over TimeSource: Reproduced fromWiser et al (2009) ...
... The Green-X database on potentials and cost for RES technologies in Europe The process included besides a survey of related studies (e.g. Krewitt et al. (2009), Wiser (2009) and Ernst & Young (2009)) also data gathering with respect to recent RES projects in different countries. ...
... This reduction in investment cost marks an important departure from the trend of the years 2005 to 2007, during which costs remained flat, as rapidly expanding global PV markets and a shortage of silicon feedstock put upward pressure on both module prices and non-module costs (see e.g. Wiser et al 2009). Before this period of stagnation PV systems had experienced a continuous decline in cost since the start of commercial manufacture in the mid 1970's following a typical learning curve. ...
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... Similarly, production of lower purity, thus cheaper, solar-grade silicon is now profitable because plants can be built at large scale. About a decade ago, some economies of scale in unit size were observed, where large installations show much lower per-watt costs (Wiser et al., 2009). Increasing installation size will become more important as economies of scale reduce module-manufacturing costs, leaving installation costs as an increasingly large share of system costs. ...
Chapter
A variety of factors, including government activities, have enabled over three orders of magnitude reduction in the cost of photovoltaics (PV) over the past six decades. No single determinant predominantly explains the improvement to date; R&D, economies of scale, learning by doing, and knowledge spillovers from other technologies have all played a role in reducing system costs. The observed cost reductions in PV are due to both incremental and nonincremental technical improvements. Although policy models have typically emphasized incremental changes, this chapter describes the prevalence of nonincremental changes. Informing the important policy decisions related to PV depends on the development of models that reliably characterize both types of change.
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... The Net-Metering program of the United States provides financial incentives in the form of tax credits and rebates provided by the federal, state and electric utilities, and are considered to be the driving force for the deployment of solar photovoltaics. Increasing electricity rate, inflation and property value are other financial or economic reasons why many are engaged in solar PV [9]. The Federal investment tax credit (ITC) program for commercial and residential photovoltaic systems alone provides a 30% tax credit of the project costs for solar PV deployments. ...
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... This section will present a number of sources that aggregate past and current cost data on solar PV systems [36]- [39]. The difficulty of an aggregation of past data is that it usually entails total system installation costs but it does not necessarily reflect present costs, as the average installed cost of residential and small commercial solar PV systems has dropped from about $1 1/W in 1998 to about $8/W in 2007 [36]. On the other hand, aggregation of current cost data usually does not include installation or balance of system (BOS) costs, as they use mainly module and inverter cost data available from retail manufacturers. ...
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... The component efficiencies used in this analysis are shown in Table 2. The PV-battery system was simulated using MATLAB built-in Nelder-Mead simplex optimization, using solar data for five years obtained from the HelioClim model, which estimates local data using satellite measurements [27]. Again, the Nelder-Mead simplex algorithm was chosen since it can easily accommodate the continuous nature of the design variables and the discontinuous nature of the constraints. ...
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Electrification of remote areas in the developing world can greatly improve the health and economic standing of the population. Unfortunately, providing power to these remote areas can be expensive and determining the most economical solution is not trivial. This paper presents a method to compare the economics of different small-scale power systems for developing world. In this method, models are developed to describe the performance of power systems composed of diesel generators, batteries with photovoltaics or wind turbines, and hybrid systems. These models are coupled to an optimizer to determine the lowest cost solution that meets the desired system reliability. The reliability is expressed as Loss of Load Probability, and is computed using hourly solar and wind data. In this paper, this method is used to design a power system for a small hospital in the developing world. The results are presented for three sample locations in Honduras, Pakistan, and Uganda. Results show that the economic attractiveness of different technologies varies greatly due to local climatic conditions. The variety and soundness of the solutions found using this method show that it can aid in the design of a small-scale power system for any location in the developing world.
... At present, tax incentives have worked well, reducing the cost of wind by 25 % 267 and of solar by up to 50%. 268 RPS have been adopted by 29 US states and the District of Columbia (as of May 2009), 269 and in March of 2011 the California legislature passed a bill mandating 33% renewable electric power by 2020. 270 However, a carbon tax or a cap-and-trade system has not been passed by Congress, and, given the contentious nature of any proposed climate legislation, their enactment seems unlikely for now. ...
... decreased signifi cantly over the past couple of decades and is projected to continue decreasing rapidly as PV technology and markets mature. However, the system price decrease 11 varies signifi cantly from region to region and depends strongly on the implemented support schemes and maturity of markets (Wiser et al., 2009). Figure 3.18 shows the system price developments in Europe, Japan, and the USA. ...
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... As of 2011, solar photovoltaic (PV) accounts for 1.4% of the global installed electricity capacity and has been growing at a rate of 43% annually from 2000 to 2011 (Gelman, 2012). The cost of installed solar (PV) systems in the United States (U.S.) has dropped from USD 11.8/W in 1998USD 8.3/W in 2007(Wiser et al., 2009 and is falling rapidlyas of 2012 it was as low as USD 2.2/W in Germany, although it could be higher in other less efficient countries (IEA-ETSAP and IRENA, 2013). The cost is expected to fall to USD 1.7-2.4/W ...
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Drawing from research interviews and the academic literature, this article conceptualizes the conditions that promote investor confidence and the social acceptance of wind and solar sources of electricity. It explores the factors influencing the acceptance of commercial wind turbines in Denmark and India and residential solar panels in Germany and the United States. The article begins by justifying its selection of case studies and explaining the methodology behind its research interviews and field visits. It then summarizes some of the key findings in recent surveys of public attitudes and market acceptance concerning renewable energy, with a focus on why some investors and communities reject wind and solar systems whereas others rapidly approve and adopt them. The article proposes that acceptance has multiple dimensions – socio-political, community, and market – that must be met holistically in order for investors and users to embrace renewable energy. The article argues that acceptance hinges upon the prevalence of nine factors; the lack of such factors creates environments where they are rejected. The theory is tested against four case studies that explore the forces driving renewable energy in Denmark, Germany, India, and the United States.
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This study used ZIP code level data from the 2000 US Census to investigate the influence of local environmental, social, economic and political variables on the distribution of residential solar PV arrays across the United States. Current locations of residential solar PVs were documented using data from the National Renewable Energy Laboratory's Open PV project. A zero-inflated negative binomial reression model was run to evaluate the influence of selected variables. Using the same model, predicted residential solar PV shares were generated and illustrated using GIS software. The results of the model indicate solar insolation, cost of electricity and amount of available financial incentives are important factors influencing adoption of residential solar PV arrays. Results also indicate the Southwestern region of the United States and the state of Florida are currently underperforming in terms of number of housing units with solar PV installations.
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Climate change and its potential impact is one of the greatest challenges facing mankind today. Viticulture and winemaking, much like the ski industry, are climate change bellwethers as both are highly dependent upon the weather, climate and place. Any future changes in the seasons, their duration, local maximum, minimum and mean temperatures, frost occurrence and heat accumulation could have a major impact on the winegrowing areas of the world. These changes are already evident in the form of increased vineyard plantings in what were a number of years ago thought to be marginal regions, such as southern England, or the movement of ‘traditionally warmer’ varietals into new ‘cooler’ regions.
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