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SOLAR POWER COST

Solar Power Cost

Component prices are beginning to lose their price variance from country to country,” writes Gallagher. “Beyond a handful of local content requirements, many of the policies that created regional hardware pricing have been eroded by market forces.”

In the U.S., it’s only stubborn soft costs such as customer acquisition that have actually risen.

And it’s seemingly only trade disputes that can derail the price-decrease train.

65 cents per watt

GTM Research finds that India’s system of tenders has produced extremely competitive bidding, and, as a result, almost unimaginably low system pricing. India is seeing the lowest system prices of any major solar market in the world, ever.

The report finds that India has utility PV system pricing of 65 cents per watt.

The secret to these low prices? It turns out that a great way to reduce your soft costs is to pay your labor force and engineers next to nothing. (Markets with low-cost labor are more likely to use fixed-tilt systems, lowering turnkey system prices even more.)

As the report points out, even in China soft costs are 11 cents per watt higher than in India.

Is that sustainable? Or even a positive thing? The reports points out the negatives of low pricing.

“The competitive tender process has a harmful side effect: There are reportedly widespread concerns about the viable lifetimes of many of the systems currently installed, as it is suspected that many were hastily constructed using poor-quality components. Developers will look to [engineering, procurement and construction providers] to safeguard their investment by raising installation and procurement quality-control standards and reduce long-term O&M headaches,” writes Gallagher.

The report also takes a close look at price trends in China, Mexico, India, Germany and the U.K.

Japan is the highest-priced market, with systems landing at $2.07 per watt, driven by heavy wind, earthquakes and mountainside erosion that add additional engineering scrutiny and costs.

The U.K. has the lowest-priced solar in Western Europe, largely because of common adoption of string inverters, which shaves a few pennies per watt.

80-90 GW new solar capacity to be added in 5-6 years

Solar panel costs to fall by 60 pct in next 10 yrs

SINGAPORE, Oct 23 (Reuters) – Solar power costs will fall by another 60 percent over the next decade giving an already booming market another boost, the head of the International Renewable Energy Agency (Irena) said on Monday.

Solar power is in the midst of boom because of sharp drops in costs and efficiency improvements, pushing global capacity from virtually zero at the start of the century to 300 gigawatt (GW) by the end of 2016, a figure expected to rise again by 2020.

Irena expects 80 to 90 GW of new solar capacity, enough to power more than 8 billion LED light bulbs, to be added globally each year over the next 5 to 6 years, Adnan Amin, the director general of Irena told Reuters, exceeding a forecast of 73 GW from the International Energy Agency (IEA).

“This could easily accelerate as costs decline in the future,” said Amin. “China alone can do 50 GW a year.”

“In the next decade, the cost of (utility scale) solar could fall by 60 percent or more,” he said in Singapore on Monday.

That growth will mark China as the world’s biggest and fastest growing solar market as Beijing relies on renewable power to cut air pollution from coal-fired power plants.

While Amin said that India would also see sharp solar growth in coming years, he expected Southeast Asia to be more mixed.

“There is a target of 23 percent (power generation) in ASEAN for renewables by 2025. We think it’s ambitious but it’s achievable,” he said.

The solar power share of the Association of Southeast Asian Nations’ (ASEAN) 10 members is currently negligible.

Amin said improvements in solar technology were especially expected from thin films, which can be applied on windows. While this is already possible, it remains prohibitively expensive.

Irena also expects the cost of batteries, key to back up a technology that relies on daytime, to fall by 60 percent to 70 percent in the next decade.

Despite its boom, Amin said potential U.S. trade barriers would only make solar energy more costly for the world’s largest oil consumer.

Average cost of solar panels based on system size

Knowing the average cost per watt is helpful, but what does $3.16/watt actually mean for you? The cost of installing solar for your house or business depends on how much electricity you want to generate – a bigger system will cost more, because you’ll need to buy more equipment and more labor will be needed to install it.

The average solar energy system size in the U.S is approximately 5 kilowatts (kW). Based on the average price of $3.14/watt, a 5kW system would cost $10,990 after tax credits. Below are some average 2018 quotes for other solar energy systems by size:

• 6kW solar energy system cost: $13,188

• 8kW solar energy system cost: $17,584

• 10kW solar energy system cost: $21,980

These prices reflect the cost of a solar energy system after deducting the federal solar tax credit, which reduces your solar system cost by 30 percent. Some states, local governments, and utilities also offer rebates and other tax incentives that can further reduce the solar system costs in your quotes from solar installers.

We often get asked how much it would cost to install enough photovoltaic (PV) solar panels on a house or business building to generate one’s own electrical energy. There are web sites to help with this, and Solar Power Authority even has a free solar calculator and quote tool, but they can be confusing unless you’re a technologist so I’ve developed some simple guidelines (below) that will help put cost in perspective.

In the USA, a rule of thumb is that the average house consumes electricity at the rate of 1 kW per hour (kWh). There are about 730 hours in each month, and the average price of a kWh of electricity is $0.10. So an average monthly bill would be around $73 for 730 kWh of electricity.

Of course, this can vary considerably if you have non-standard items such as a hot-tub, or some electrical appliances running continuously. Extended computer use, plasma screen TVs and video games consoles can also make an impact. Your usage will increase significantly in months when you run an air conditioning unit, as well. Finally, the cost of electricity varies widely across the USA, from as low as $0.07/kWh in West Virginia to as much as $0.24/kWh in Hawaii. You’ll have to adjust my guidelines accordingly, because they apply to an average home with average consumption and average electricity costs.

A conservative value to use as a solar panel’s generating capacity is 10 watts/sq. ft. This represents a panel conversion efficiency of about 12%, which is typical. This means that for every kW you generate, you need about 100 sq. ft. of solar panels. If the sun shone 24 hours a day, you could put up 100 sq. ft. of panels and have enough energy to power the average home.

But, as we all know, the sun is available only during daylight hours, and the amount available per day is highly dependent on the extent of cloud cover. Also, the length of each day is dependent on the season. Fortunately, there are resources on the web to help you figure out how many hours per day (on average) you can count on the sun to shine, based on where you live.

The averages across the USA vary from around 3 hours per day in places like Seattle, Chicago, and Pittsburgh, to 5 or 6 hours per day in states like Colorado and California, to a high of 7 hours per day in Arizona. What that means is that the size of the panel array required can vary, anywhere from 400 sq. ft. to 800 sq. ft. (i.e., 4 kW to 8 kW), depending on where you live. You’ll need more panels if you live in a location that gets less sunshine per day, and fewer if you live in a location that gets more.