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US solar plant costs fall another 30 per cent in one year

reneweconomy.com.au

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Re: US solar plant costs fall another 30 per cent in one year

#21

Post by maxerickson »

ggm wrote: post #12

The non-decline in the associated costs for individual installs has to be thought about. If this is a true reflection of unavoidable costs, home installs are unlikely to break a cost barrier, and won't make substantive differences in centralized generation. If on the other hand they are mutable costs, and can be brought down, then microgrids and local power has more chance of becoming something of substance. The bigg…

6% isn't really a non decline, it just isn't a huge decline.

The major component of residential cost is non-labor soft costs. The NREL pdf is easier to read (https://www.nrel.gov/docs/fy17osti/68925.pdf) and lists them: permitting, inspection, and interconnection, land acquisition, sales tax, overhead and profit.

According to their modeling, it's mostly profit, overhead and sales and marketing costs.

Re: US solar plant costs fall another 30 per cent in one year

#22

Post by mikeash »

taneq wrote: post #5
mc32 wrote: post #2

On the one hand it's great to get Solar below cost _at someone else's_ expense (Chinese over producing manufacturers), on the other hand I'd prefer that some of our own PV mfgs remain afloat. Ultimately the goal is to wean off of fossil fuels, but if all our R&D is unprofitable we may miss some breakthroughs.

"Over-producing" isn't really a thing. You're complaining about supply outstripping demand causing prices to fall - that's always going to happen with any mass produced goods. It sounds like the real issue is that doing R&D in the U.S. is uncompetitively expensive compared to doing the same work in China.

Over-producing isn't a thing in a pure free market, but it's absolutely a thing when government subsidies get involved.

Re: US solar plant costs fall another 30 per cent in one year

#23

Post by sounds »

ggm wrote: post #12

The non-decline in the associated costs for individual installs has to be thought about. If this is a true reflection of unavoidable costs, home installs are unlikely to break a cost barrier, and won't make substantive differences in centralized generation. If on the other hand they are mutable costs, and can be brought down, then microgrids and local power has more chance of becoming something of substance. The bigg…

Inflation-adjusted residential costs according to nrel.gov are shown in the chart on page vi of https://www.nrel.gov/docs/fy17osti/68925.pdf

The raw costs, not adjusted for inflation:

Q1 2014: $4.52/W total for $1.03/W modules [0]

Q1 2015: $3.09/Wdc total for $0.70/Wdc modules [1]

Q1 2016: $2.93/Wdc total for $0.63/Wdc modules [2]

Q1 2017: $2.80/Wdc total for $0.35/Wdc modules [3]

Conclusion: Even if the modules cost $0.0000001, the total price could not fall much more unless the rest of the business model gets updated. Probably some solar installer companies will drop out of the market, and the survivors will adapt to lower profits.

[0] Page 12, https://www.nrel.gov/docs/fy14osti/60401.pdf

[1] 5.2kW system. See page 7, https://www.nrel.gov/docs/fy15osti/64746.pdf

[2] 5.6kW system. See page 16, https://www.nrel.gov/docs/fy16osti/66532.pdf

[3] 5.7kW system. See page 21, https://www.nrel.gov/docs/fy17osti/68925.pdf

Re: US solar plant costs fall another 30 per cent in one year

#24

Post by [deleted] »

ggm wrote: post #12

The non-decline in the associated costs for individual installs has to be thought about. If this is a true reflection of unavoidable costs, home installs are unlikely to break a cost barrier, and won't make substantive differences in centralized generation. If on the other hand they are mutable costs, and can be brought down, then microgrids and local power has more chance of becoming something of substance. The bigg…

[deleted]

Re: US solar plant costs fall another 30 per cent in one year

#25

Post by [deleted] »

sounds wrote: post #23
ggm wrote: post #12

The non-decline in the associated costs for individual installs has to be thought about. If this is a true reflection of unavoidable costs, home installs are unlikely to break a cost barrier, and won't make substantive differences in centralized generation. If on the other hand they are mutable costs, and can be brought down, then microgrids and local power has more chance of becoming something of substance. The bigg…

Inflation-adjusted residential costs according to nrel.gov are shown in the chart on page vi of https://www.nrel.gov/docs/fy17osti/68925.pdf The raw costs, not adjusted for inflation: Q1 2014: $4.52/W total for $1.03/W modules [0] Q1 2015: $3.09/Wdc total for $0.70/Wdc modules [1] Q1 2016: $2.93/Wdc total for $0.63/Wdc modules [2] Q1 2017: $2.80/Wdc total for $0.35/Wdc modules [3] Conclusion: Even if the modules cost…

[deleted]

Re: US solar plant costs fall another 30 per cent in one year

#26

Post by simonh »

taneq wrote: post #5
mc32 wrote: post #2

On the one hand it's great to get Solar below cost _at someone else's_ expense (Chinese over producing manufacturers), on the other hand I'd prefer that some of our own PV mfgs remain afloat. Ultimately the goal is to wean off of fossil fuels, but if all our R&D is unprofitable we may miss some breakthroughs.

"Over-producing" isn't really a thing. You're complaining about supply outstripping demand causing prices to fall - that's always going to happen with any mass produced goods. It sounds like the real issue is that doing R&D in the U.S. is uncompetitively expensive compared to doing the same work in China.

It's a problem when market prices drop below the cost of manufacture. That can lead to a financial collapse for individual producers, lack of investment in maintaining capacity and a lack of investment in new technology and manufacturing processes. That can lead to sudden reductions in supply and unpredictable price surges which make it very difficult to control the costs of long term projects.

Extreme price swing for panels aren't guaranteeed to happen, it depends on how governments respond in financial support for producers and changes to subsidies, but that's just shifting the costs of all of this on to tax payers.

Re: US solar plant costs fall another 30 per cent in one year

#27

Post by bagacrap »

sounds wrote: post #23
ggm wrote: post #12

The non-decline in the associated costs for individual installs has to be thought about. If this is a true reflection of unavoidable costs, home installs are unlikely to break a cost barrier, and won't make substantive differences in centralized generation. If on the other hand they are mutable costs, and can be brought down, then microgrids and local power has more chance of becoming something of substance. The bigg…

Inflation-adjusted residential costs according to nrel.gov are shown in the chart on page vi of https://www.nrel.gov/docs/fy17osti/68925.pdf The raw costs, not adjusted for inflation: Q1 2014: $4.52/W total for $1.03/W modules [0] Q1 2015: $3.09/Wdc total for $0.70/Wdc modules [1] Q1 2016: $2.93/Wdc total for $0.63/Wdc modules [2] Q1 2017: $2.80/Wdc total for $0.35/Wdc modules [3] Conclusion: Even if the modules cost…

So from 16 to 17, the total cost aside from modules went up?

Re: US solar plant costs fall another 30 per cent in one year

#28

Post by maxerickson »

sounds wrote: post #23
ggm wrote: post #12

The non-decline in the associated costs for individual installs has to be thought about. If this is a true reflection of unavoidable costs, home installs are unlikely to break a cost barrier, and won't make substantive differences in centralized generation. If on the other hand they are mutable costs, and can be brought down, then microgrids and local power has more chance of becoming something of substance. The bigg…

Inflation-adjusted residential costs according to nrel.gov are shown in the chart on page vi of https://www.nrel.gov/docs/fy17osti/68925.pdf The raw costs, not adjusted for inflation: Q1 2014: $4.52/W total for $1.03/W modules [0] Q1 2015: $3.09/Wdc total for $0.70/Wdc modules [1] Q1 2016: $2.93/Wdc total for $0.63/Wdc modules [2] Q1 2017: $2.80/Wdc total for $0.35/Wdc modules [3] Conclusion: Even if the modules cost…

The discussion in your first link is interesting. Smaller installers can end up having lower costs because they spend less on customer acquisition. They pay somewhat higher prices for material, but plummeting panel costs and not holding panels in inventory have worked out well for them.

Re: US solar plant costs fall another 30 per cent in one year

#29

Post by sounds »

bagacrap wrote: post #27
sounds wrote: post #23

Earlier quoted context omitted.

Inflation-adjusted residential costs according to nrel.gov are shown in the chart on page vi of https://www.nrel.gov/docs/fy17osti/68925.pdf The raw costs, not adjusted for inflation: Q1 2014: $4.52/W total for $1.03/W modules [0] Q1 2015: $3.09/Wdc total for $0.70/Wdc modules [1] Q1 2016: $2.93/Wdc total for $0.63/Wdc modules [2] Q1 2017: $2.80/Wdc total for $0.35/Wdc modules [3] Conclusion: Even if the modules cost…

So from 16 to 17, the total cost aside from modules went up?

I haven't collected the hard numbers for what is presented on page vi of https://www.nrel.gov/docs/fy17osti/68925.pdf, but soft costs appear to have swollen to take up most of the cost savings from reduced module prices.

In other words, yep.

Re: US solar plant costs fall another 30 per cent in one year

#30

Post by D_Alex »

sounds wrote: post #23
ggm wrote: post #12

The non-decline in the associated costs for individual installs has to be thought about. If this is a true reflection of unavoidable costs, home installs are unlikely to break a cost barrier, and won't make substantive differences in centralized generation. If on the other hand they are mutable costs, and can be brought down, then microgrids and local power has more chance of becoming something of substance. The bigg…

Inflation-adjusted residential costs according to nrel.gov are shown in the chart on page vi of https://www.nrel.gov/docs/fy17osti/68925.pdf The raw costs, not adjusted for inflation: Q1 2014: $4.52/W total for $1.03/W modules [0] Q1 2015: $3.09/Wdc total for $0.70/Wdc modules [1] Q1 2016: $2.93/Wdc total for $0.63/Wdc modules [2] Q1 2017: $2.80/Wdc total for $0.35/Wdc modules [3] Conclusion: Even if the modules cost…

Based on the Australian experience, the next wave of price declines for residential solar will indeed come from balance-of-system cost declines, increased installation efficiency and lower profits.

Current costs in Australia are about A$ 1.70 /pk-W (~US$1.35), pre-subsidies, split roughly into 35% modules, 10% inverter, 10% mounting system, 10% other hardware (cabling, switchboard etc), 10% installation and 25% "vendor's margin", including marketing, sales and profits.

The household has also to pay for a bi-directional meter to allow for energy sales. IIRC that was around A$350.

It's a mystery why the US costs are so high - maybe not enough competition?

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