The US National Renewable Energy Laboratory (NREL) has released a new report exploring the opportunities for reducing solar PV ‘soft costs’ by 2020. The report has been funded by the Department of Energy’s Sunshot Initiative and builds off NREL’s ongoing soft-cost benchmarking analysis, charting a path to achieve SunShot soft-cost targets of $0.65/W for residential systems and $0.44/W for commercial systems by 2020.
Non-hardware costs, also known as ‘soft’, balance of system or business process costs, include permitting, inspection, interconnection, overhead, installation labor, customer acquisition, and financing. They represent the majority of costs for residential solar, accounting for more than 50 percent of total installed residential solar costs and also represent a large minority of costs for commercial PV projects according to RMI’s programme director, Jon Creyts.
“Regardless of the specific path taken to achieve the SunShot targets, the concerted efforts of numerous photovoltaic (PV) market stakeholders will be required” said NREL’s Solar Technology Markets and Policy Analyst Kristen Ardani. “This report illustrates how the required participation of each type varies substantially by soft-cost-reduction category while noting that roles and responsibilities will be complementary and evolve over time.”
The report sets out strategies for overcoming market barriers and decreasing costs across four key areas, notably customer acquisition; permitting, inspection and interconnection; installation labour; and financing. It also presents proven methodologies adapted from the semiconductor and silicon PV industries, offering comprehensive findings from market analysis and interviews with solar industry soft-cost experts. Customers can reduce acquisition expenditures, for example, by using software tools to reduce time spent on site, designing templates to reduce system design costs and leveraging consumer-targeting strategies in order to increase the number of leads generated.
The report is the first in a series of publications that will explore this issue in detail while also quantifying the impact of innovation, with future reports looking at soft cost benchmarks and cost reduction strategies.
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