Soft Costs Still Hurting U.S. Solar – Opportunities from Leading Countries Waiting to Be Implemented

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Rocky Mountain Institute and Georgia Tech Research Institute release the report “Lessons from Australia: Reducing Solar PV Costs Through Installation Labor Efficiency,” detailing opportunities for the U.S. to reduce PV system costs. As a result of not implementing these best practices, the U.S. continues to lag behind global leaders Germany and Australia.

With solar module costs relatively the same everywhere, total soft costs — including customer acquisition, installation labor, permitting, inspection, and interconnection — now comprise approximately 70% of the total installed price for a U.S. residential PV system. This makes soft costs a prime opportunity for drastic cost reductions.

With funding from the Sunshot Initiative, a series of studies are being completed by Rocky Mountain Institute (RMI) and Georgia Tech Research Institute (GTRI) to identify opportunities for cost reductions. Germany’s installation labor practices were looked at last year and released in a December 2013 study. RMI and GTRI have now traveled to Australia to analyze the varying PV installation processes of that country. Each provided a unique opportunity to draw a comparison between installation costs and methods; when combined with the U.S., the three countries comprise more than 39% of total global distributed PV generation.

Australia has emerged as a dominant player in the world residential solar market. More than 10% of households possess a rooftop solar system with costs of $2.56/W, closely rivaling Germany’s $2.21/W (compared with $4.93/W in the U.S.). Without using advanced technologies or processes, Australian installers can install solar systems in less than two-thirds the time per kW than U.S. installers, again, very closely rivaling Germany.

Several cost-reduction opportunities were identified during observations in Australia:

  • Pre-installation and base-installation process optimization
  • Integrated racking and mounting solutions
  • PV meter integration

It is interesting to note that these observations closely mirror the recommendations made by Fraunhofer USA at this year’s Intersolar North America. This adds weight to the idea that these recommendations should be attainable here in the U.S.

“Lessons learned from these leading markets in Germany and Australia are formative for advanced residential and commercial PV racking technologies currently under development,” said GTRI Senior Research Engineer Joseph Goodman. “Ultimately, we are looking to not only leapfrog best-in-class U.S. systems, but also surmount these global benchmarks—helping us reach the Department of Energy SunShot cost reduction targets.”