Wednesday, February 20, 2013

German Solar Is Half The Cost Of USA Solar

Lawrence Berkeley National Laboratory (LBNL) has studied why it costs double to install solar system in USA than in German. LBNL found that residential German solar system goes for $3.00/watt and a residential U.S. solar system goes for $6.19/watt. The price difference is mainly due to the soft cost. Below picture shows the breakdown of solar system cost.

So, here’s a summary of LBNL’s findings of the causes of cost difference:
  • Total non-hardware costs for residential PV in Germany are ~$2.70/W lower than in the USA
  • Customer acquisition costs average just $0.07/W in Germany, or roughly $0.62/W lower than in the USA
  • Installation labor requirements reportedly average 39 hours for German systems, leading to $0.36/W lower costs than in the USA
  • PII processes require 5 hours of labor, on average, in Germany, with no permitting fee, resulting in PII costs roughly $0.21/W lower than in the USA
  • German residential systems are exempt from sales/value-added tax, while USA systems are subject to an average sales tax of roughly $0.21/W (accounting for sales tax exemptions in many USA states)
  • The remaining gap in soft costs between Germany and USA (~$1.32/W) is associated with overhead, profit, and other residual soft costs
  • Shorter project development times in Germany contribute to ~$0.2/W lower
  • Residential PV systems are larger in Germany (partly due to differences in policy design), benefiting from economies of scale ($0.15/W effect)

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