Why Americans Pay 80% More for PV

In a study supported by the Department of Energy’s SunShot program, the Lawrence Berkeley Lab has revised its assessment of why solar installations are cheaper in Germany than in the United States.  It’s not because labor rates are lower; instead, standard practices mean fewer labor hours on each installation, with no permitting fees or sales taxes. In 2012, the lab finds that the average cost of a customer-owned PV system (under 10kW) in the United States was $6.21 per watt before incentives; that’s 80 percent higher than the average cost in Germany, $3.42. Hardware costs were nearly equal.

Here’s a summary of the report:

• Total non-hardware costs for residential PV in Germany are about $2.70/W lower than in the U.S.

• Customer acquisition costs average just $0.07/W in Germany, or roughly $0.62/W lower than in the U.S.

• Installation labor requirements reportedly average 39 hours for German systems, leading to $0.36/W lower costs than in the U.S.

• PII (permit, inspection, interconnection) 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 U.S.

• German residential systems are exempt from sales/value-added tax, while U.S. systems are subject to an average sales tax of roughly $0.21/W (accounting for sales tax exemptions in many U.S. states)

• The remaining gap in soft costs between Germany in the U.S. (~$1.32/W) is associated with overhead, profit, and other residual soft costs not captured in the categories above.

To download a summary of the report, click http://emp.lbl.gov/sites/all/files/german-us-pv-price-ppt.pdf

Source: treehugger.com

According to GlobalData, a leading business intelligence provider, the global offshore wind power market is expected to explode over the next decade, with the UK as a leading investor. The UK has been a major actor in the market with its ideal location for offshore wind power and its financial commitment. GlobalData states that the country’s installed capacity is expected to hit 21 GW by the end of 2020, which is a nearly 800% increase from 2012. GlobalData’s new report on the global wind power market also predicts that the market will increase from a cumulative capacity of 5.1 GW in 2012 to 54.9 GW by the end of the decade. There are of course, other countries expected to jump on board with this growing market including Germany, which plans to expand its offshore wind sector greatly in the near future.

Source: GlobalData press release, Offshore Wind Power to Grow Tenfold by 2020, with UK Leading the Way

LBL Chart

The answers won’t surprise you. German installers reported average soft costs of $0.62 per watt in 2011, roughly $2.70 per lower than the average soft costs reported by U.S. installers.  Customer acquisition costs averaged just $0.07 per watt in Germany, roughly $0.60 per lower than in the U.S.
Labor costs were about $.55 per watt lower in Germany for equivalent systems.  Permitting, interconnection, and inspection (PII) processes required 10 hours of labor, on average, in Germany, with no permitting fee, resulting in PII costs roughly $0.20 per watt less than in the U.S. Read the full report:

http://eetd.lbl.gov/ea/emp/reports/german-us-pv-price-ppt.pdf