Subscribe free to our newsletters via your
. Solar Energy News .




SOLAR DAILY
NREL Reports Soft Costs Now Largest Piece of Solar Installation Total Cost
by Staff Writers
Golden CO (SPX) Dec 12, 2013


Residential soft cost categories for the first (2010 data) and second (2012 data) editions of the benchmarking study. For the first edition of the benchmarking study, 2010 "all other soft costs" had not been differentiated. For the second edition, we quantified five sub-categories within this broader category.

Two detailed reports from the Energy Department's National Renewable Energy Laboratory (NREL) find that solar financing and other non-hardware costs - often referred to as "soft costs" - now comprise up to 64% of the total price of residential solar energy systems, reflecting how soft costs are becoming an increasingly larger fraction of the cost of installing solar.

"The two new reports, along with previous reports, provide a comprehensive look at the full cost of installing solar, while delineating and quantifying the various contributors to that final cost," NREL analyst Barry Friedman said.

The first new report, "Benchmarking Non-Hardware Balance-of-System (Soft) Costs for U.S. Photovoltaic Systems, Using a Bottom-up Approach and Installer Survey - Second Edition" is a follow-up to the first edition published in 2012, but offers a more in-depth look at non-hardware business process and installation costs associated with photovoltaic (PV) solar energy systems.

Research interviews included 55 residential PV installers representing about 27 megawatts of capacity installed during the first half of 2012. Researchers also gathered data from 22 commercial PV installers representing 269 commercial PV installations for the same time period, for a total of 66 megawatts of capacity.

The authors found that in the first half of 2012, soft costs represented the majority of all costs - 64% of the total price for residential systems, up from 50% of the total price in the first edition. Similar results were found for small and large commercial installations - 57% of the total cost for small (less than 250 kilowatts) commercial systems (up from 44%); and 52% of the total costs for large (250 kilowatts or larger) commercial systems (up from 41%).

For residential systems, the greatest soft costs were supply chain costs ($0.61/watt), installation labor ($0.55/W), customer acquisition ($0.48/W), and indirect corporate costs ($0.47/W), such as maintaining office management and accounting functions. Other soft costs examined for the report included costs for permitting, inspection, interconnection, subsidy applications and system design. Soft costs for small commercial (<250 kW) and large commercial (>250 kW) systems were also collected and analyzed.

In contrast to the first edition of the report, the new report unpacked the "other" soft costs category, using a detailed "bottom-up" cost-accounting framework to quantify five sub-categories: transaction costs, indirect corporate costs, installer/developer profit, supply chain costs, and sales tax (see figure below).

By modeling a third-party ownership structure - solar energy systems leased to homeowners, for example - the new approach captured costs of doing business that had not been previously quantified. Those costs include engineering, procurement, and construction; developer and finance department staff and overhead; professional and legal services; capital costs during construction; and other costs.

The second report "Financing, Overhead, and Profit: An In-depth Discussion of Costs Associated with Third-party Financing of Residential and Commercial Photovoltaic Systems" takes a deeper look at the five sub-categories identified in the benchmarking study that had been lumped together in the first edition of the benchmarking study.

Researchers and industry developed and vetted a bottom-up analysis of costs associated with developing, financing, constructing and arranging the financing for third-party owned systems. The model quantifies the indirect corporate costs required to install distributed PV systems as well as the transactional costs associated with arranging third-party financing. The authors conducted in-depth interviews with members of finance departments at large PV installation companies and collected data from corporate public filings.

They found that third-party ownership added $0.78 per watt for residential systems and $0.67 per watt for commercial projects. They also noted three of the main benefits of third-party financing arrangements:

+ Third-party financiers offer additional services, such as shopping for systems, maintaining systems, and applying for incentives.

+ Third-party financing may effectively lower the levelized cost of energy over time through economics of scale.

+ Businesses offering third-party ownership of installations have gained approximately 70% of residential market share in the United States, driving much of the PV demand.

NREL is the U.S. Department of Energy's primary national laboratory for renewable energy and energy efficiency research and development. NREL is operated for the Energy Department by the Alliance for Sustainable Energy, LLC.

The findings in these reports provide benchmarks and help track progress of the SunShot Initiative, a national effort to make solar energy fully cost-competitive with traditional energy sources by the end of the decade. Through SunShot, the Energy Department supports efforts by private companies, universities and national laboratories to drive down the cost of solar electricity to $0.06 per kilowatt-hour. Learn more here.

.


Related Links
National Renewable Energy Laboratory
All About Solar Energy at SolarDaily.com






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle








SOLAR DAILY
Rooftop solar powers past new milestone
Canberra, Australia (SPX) Dec 10, 2013
More than 3 gigawatts of solar power has now been installed on Australian rooftops, which will produce enough energy over the next year to run Melbourne's entire train network for more than a decade, Clean Energy Council Chief Executive David Green said in an address to the Energy Efficiency Council's national conference today. Mr Green said official Clean Energy Regulator figures this wee ... read more


SOLAR DAILY
Ground broken on $6 million Hungarian farm biogas plant

Team reports on US trials of bioenergy grasses

Companies could make the switch to wood power

Turning waste into power with bacteria and loofahs

SOLAR DAILY
Literal Android: Google develops robots to replace people in manufacturing, retail

Droids dance, dogs nuzzle, humanoids speak at Madrid robot museum

Spanish scientists are designing a robot for inspecting tunnels

Penguin-inspired propulsion system

SOLAR DAILY
Renewable Energy Infrastructure Fund acquires 16 MW wind power asset from O2

Morgan Advanced Materials Delivers Superior Insulation Solution To Wind Farm

Ethiopia spearheads green energy in sub-Saharan Africa

Small-Wind Power Market to Reach $3 Billion by 2020

SOLAR DAILY
Peugeot confirms in talks with Chinese carmaker, GM pulls out

China auto sales hit record high in November

Britain pledges commitment to driverless car technology

China approves $1.3 bn Renault-Dongfeng joint venture

SOLAR DAILY
Nigeria's leader under fire over missing $50B in oil money

Another cost blowout for Chevron's Gorgon LNG in Australia

Persian Gulf states seek joint military command -- again

Added molecules allow metal-organic frameworks to conduct electricity

SOLAR DAILY
US Risks Losing Critical Clean Electricity if Nuclear Power Plants Keep Closing at Steady Pace

US takes last shipment of Russian uranium

Company says no danger after fire at US nuclear plant

S. Korea scales back nuclear expansion plans

SOLAR DAILY
Who Is Keeping the Lights on in California?

The heat is on...or off

French Alstom sues Chinese firm in Bulgaria over patent

India needs $2.1 trillion investment for energy: IEA

SOLAR DAILY
Young tropical forests contribute little to biodiversity conservation

More logging, deforestation may better serve climate in some areas

Humans threaten wetlands' ability to keep pace with sea-level rise

Development near Oregon, Washington public forests




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement