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Clean Power us solar prices

Published on June 19th, 2012 | by Zachary Shahan

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$2.24/Watt vs $4.44/Watt: Solar in Germany vs Solar in the US

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June 19th, 2012 by Zachary Shahan 

 
As reported previously, Germany had about 21.6 times more solar power installed per capita at the end of 2011 than the US (301.47 MW per million people versus 13.973 MW per million people). In absolute numbers, Germany had about 5.63 times more solar power installed (24,678 MW versus 4,383 MW). These differences also translate into big differences in solar costs, as the most recent installation cost numbers show.

According to BSW Solar, the average cost of installed solar power per watt peak was €1.776, or $2.24, in Q2 of 2012 (as we noted back in May). By contrast, as the most recent GTM Research and SEIA U.S. Solar Market Insight report finds, the average price per watt for solar in the US was $4.44 in Q1 of 2012. That’s a pretty huge difference. And it’s just a testament of what strong solar policy can do for solar power costs.

“Since Germany is dominated by rooftop systems (72 percent of installations in 2011), this is an impressively low number,” Greentech Media writes. “Assuming a module price of around $0.90 per watt peak, this implies an average balance of system cost of $1.34 per watt peak.”

As our resident German writer Thomas would probably note, a solar revolution in Germany was never a given — it has been fought consistently and solar power myths have been spread far and wide there just as they have in the US. And they still are. But the efforts and intelligence to push it to this amazing point have clearly been greater compared to the opposition than in the US so far.

At least it leaves us with an example to look up to and proof for the naysayers.

And, of course, it’s not to say solar power prices aren’t dropping in the US. As mentioned less than a week ago, the average price of installed solar in the US decreased 17.2% from Q1 2011 to Q1 2012.

Going on along these lines, Greentech Media writes: “Residential system prices fell by 4.8 percent from Q4 2011 to Q1 2012, with the national average installed price falling from $6.18 per watt to $5.89 per watt. Non-residential system prices fell by 6 percent quarter to quarter, from $4.92 per watt to $4.63 per watt. Utility system prices declined for the eighth consecutive quarter in a row, dropping from $3.20 per watt in Q4 2011 to $2.90 per watt in Q1 2012.”

Additionally, it makes the DOE’s SunShot goal of getting installers to put solar up for an average price of $2/watt pretty darn do-able, doesn’t it?

Assuming that solar hardware costs are pretty similar in the US and Germany, one of the prime culprits for the higher overall costs is the “soft costs” of going solar, which is exactly what the SunShot Initiative is currently taking aim at.

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About the Author

spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.



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  • Tim Gulden

    In Germany there are other costs that are not included like electrician AC hook up charges, extra AC hook-up material costs, data logger costs, and annual insurance costs. You will never see a 3kW system installed for a turn-key gross cost of 1.776€/W. Lets compare suns to suns (apples to apples as the saying goes)

  • Lisa

    Bob_wallace  it’s the case that we are been over charged in the US,  my contacts in Australia say that Power Station & Polluting company are paying $23 AUD a ton under carbon tax, which that money is given back to the community as cash Under there labor federal government .

    • http://cleantechnica.com/ Zachary Shahan

      I’m not sure if i follow — the revenue generated from the carbon tax is used to pay citizens who go solar? that’s the only policy i can make out of these comments, but haven’t heard of that before.

  • Ben OZman

    What you guys need to under stand in Australia compared to the USA is that we have A CARBON TAX now in place, under Climate Change Laws which started from Prime Minister John Howard on  20 Nov 1997. Since than our Labor Government start-up the third round of John Howard climate change laws, known as a carbon tax.  This is why solar panels have dropped in price under Prime Minister Julia Gillard, yesterday at the G20 she said it easy to go green, she challenge the market to drop solar panel prices even lower. Prime Minister Direct action on wind and solar power policy is working well.

    • Bob_Wallace

      I’d like to understand, but I’m lacking adequate information.

      How is a carbon tax making the price of solar panels 50 cents per watt?  What company is manufacturing cheaply enough to sell panels at that price?

      I can easily see how a carbon tax would drive up the price of fossil fuel generation, thus making solar and wind more competitive.  And I can see how creating a much larger market for solar and wind would make them cheaper.  We’ve seen that happen in Germany.  But I can’t put together carbon tax = 50 cents/watt panels.

      If you guys have pulled that off you have a major story to share with the rest of the world.

      • Jim

        Looking at eBay-au, nothing is selling on their. 200watt solar panels going around $200 – $260 AUD, however given I have seen them on eBay-au last week for $150 AUD which confirm that they must be getting solar panel at 50 cent a watt. The guys on eBay a back yard sellers and do not import solar panels; they sell at a large profit rate and not getting government handout to buy them. Also they have a 10% GST tax remove that from the prices and it even lower than those prices. Could be to do with mining minerals Australia have the world’s richest woman, in the next year she be the riches person in the world.

      • Greg

        Bob_Wallace

        United States-based Westinghouse said today it had received a large order for its Grid tied Connect systems Solar Panels from Australian electrical retailer store. Westinghouse’s shipments in 2012 more than doubling from 2011 production levels  under this new order. Word  is the Australian electrical retailer store would have had to paid less than 50 cent USD per watt, given that trader are currently selling at 50 cent per watt in Australia.

  • Bob_Wallace

    Sweet, sweet Obama administration action underway….
    “Earlier this month, the U.S. Department of Energy’s SunShot Initiative turned its attention to the soft costs of rooftop solar, including customer acquisition, financing and permitting, which can account for nearly half the costs of residential solar systems.
    The DOE handed out $8 million to nine companies, many of which focus on reducing the cost of customer acquisition through online web portals. Sales and marketing alone can account for about 25 percent of a residential install, according to SunRun….”
    “One of the companies is EnergySage, a web portal that lets consumers and businesses evaluate the cost of clean energy on their property, including solar, solar thermal small wind, geothermal, biomass and combined heat and power.
    “Our belief is clean energy will only become pervasive if it impacts the bottom line of the consumer and not just the environment,” said Vikram Aggarwal, CEO of EnergySage.
    Currently, EnergySage is building a solar PV price quote comparison platform. The founders come out of the financial services world, and think that customers should look at solar as an asset class, similar to stocks and bonds.”
    http://www.greentechmedia.com/articles/read/energysage-tackles-solar-acquisition-costs/ 

    Use market forces in the fight against climate change.  Makes so much sense to me….

  • wattleberry

     Well, if this blog isn’t letting the genie out the bottle and encouraging us all to raise our expectations to the German level I don’t know what is-and they got where they are without such stimuli.
    Vorspung durch SolarSpring.

    • Bob_Wallace

      The Germans got their solar industry built without “stimuli”?

      Sorry, you are very under-informed about the amount of subsidy Germany provided to get their renewable energy industries into high gear.  

      Germany spent some serious money up front and now they are enjoying great returns on their investments.

      Fortschritt durch Subvention

      • wattleberry

        You’re dead right about my being under-informed, very much the ‘enthusiastic amateur’ [like most politicians?] so I try to remain innocuous. However, I plead innocence on saying ‘without stimuli’, just ‘such stimuli’ because blogs didn’t exist then.

        • wattleberry

           By the way, I’m not a politician, in case you were wondering. What a prepostuous thought!

          • wattleberry

             Sorry, ‘preposterous’.

          • http://cleantechnica.com/ Zachary Shahan

            lol, maybe you should go for it! a politician willing to admit to his mistakes and change course is rare (his real mistakes,… not change course because his funder changed or threatened his job).

          • wattleberry

            Thanks for the ‘nomination’ but I’m too old to contemplate such a move. In any case I’m sure none of the existing democracies, conceived as they were in a much less complex world, is any longer capable of truly ‘representing the people’, no matter how noble the motives impelling individuals to take up the vocation in the first place. It’s strange how archaic the systems have remained when IT has transformed communications [and opportunities for representation]. No doubt the existing ‘representatives’ are in no more hurry to change the status quo on this as with any other issues because, whatever changes would occur, the common feature of a modernised political arrangement would be a dramatic reduction in their roles. This all the more ironic when the West is busy evangelising to the ‘unenlightened’ world. Just imagine a ‘CleanPolitica’ blog running alongside this one showing advancements in representation worldwide.
            We’d surely be approaching Utopia.

          • http://cleantechnica.com/ Zachary Shahan

            Too true.

            Very well put. And yes, very sad. Wouldn’t it be something to have a CleanPolitica blog?!

            Gosh, got me dreaming now.

          • wattleberry

            Great! The ‘completely screwed’ posting is right on the button and just needs to be endlessly repeated, with the proven remedy, in the hope that it will eventually dawn on enough of the policy-makers that there is a symbiosis between our economic and ecological interests never admitted to up to now. ‘All’ you need to do to achieve it is to somehow get this message on our TV screens constantly, in the news and via drama. Maybe I’ve missed it, but have we had a long-running series yet depicting the effect of complacency on the human race? Perhaps a dramatised documentary? Whatever, but it would have to adhere to objective projections to be credible. Quite a challenge but what a way to get the message across. I reckon Spielburg could do it.

          • Bob_Wallace

            I wish you were a politician.  I’d like to think we’re getting through to a few of them….  ;o)

      • http://cleantechnica.com/ Zachary Shahan

        took it to mean the stimuli of another country being so much ahead in this way… but maybe i’m wrong.

      • ThomasGerke

        Well, the German FIT is not a subsidy, it’s a price garantee. It’s more like government mandated profitability for all renewable energy technologies. While it’s no subsidy by definiton, law or design, many call it a subsidy on purpose or carelessly. Those who do so on purpose do it more out of a free market ideology. 

        The FIT certainly created investment autonomy for everyone to launch his small and big business activities in the field of renewable energy. Households & businesses did choose to invest, which lead to new industries, new products and new services. 

        While we (germans) will pay for this government mandated renewable energy market, it wasn’t up front. 

        Fortschritt durch Investitionen & Technik.
        Vorsprung durch Weitsicht. 

        Since energy and the destruction of the planet are political issues, government interference into the market has a massive legitimization. ;)

        Thank god that the politican who was the driving force behind the “Renewable Energy Act” had studied politics and economics. ;)

        • Bob_Wallace

          OK, I was using the word subsidy inappropriately. FiTs are not assistances paid.

          Well, unless you think of them as funds taken from some (taxes) and paid to others via a guaranteed higher selling price.

          I’m not very interested in the semantics of how renewables are supported during their development. The point is that Germany found a way to support an emerging market and build it to the point at which it has become self sustaining.

  • Anne

    One thing I have understood is that a part of the price difference is due to permitting necessary in the US, which adds considerable cost.

    • http://cleantechnica.com/ Zachary Shahan

      that makes sense.

      a big hurdle many places.

  • http://www.facebook.com/people/Stan-Stein/1756064509 Stan Stein

    Our company began as a commercial contractor…..but now…we decided to offer near commercial pricing to the general public…so our customers are only paying $3.15 per watt, no matter watt size system they buy (sorry about the pun there, lol) Of course, the sales commission is lower…@.10 per watt vs. .20 to .25 on $4 and $5 per watt systems, respectively. But with our pricing….the salesmen close an average of 50% on a first visit basis…..so $2000 per week (about 3 sales) is pretty easy for them on average.
    One of the biggest expenses that needs to come down is inverters……in any other industry, the same type of unit is less than 1/2 the cost…..there is NO competition from mfgs….and there should be…..a small to medium facility that wants more sales would be smart to start building them……they could instantly be selling 5000 units per month @ a profit of at least 500 each……..thats BIG BIG money, even at 1/2 that volume or 1/2 the profit.

    • Bob_Wallace

      Thanks for that info.  Your inverter comments match impressions I’ve had for a while.  Inverters are just plain expensive and for no reason that I can see except for lack of competition.

      It would seem that some manufacturers would have taken notice and have started cranking these puppies out. 

      Wonder what could be done to get someone’s attention?

      • Luke Au

        So what the price got to do with it, price is the last thing I’m concerned about, you got to think about saving the planet regardless of the price.

        • Bob_Wallace

          If even half the people on Earth thought like you we would have already fixed our problems.

          But you are a rarity.  Most people won’t do anything about a problem until they are personally suffering.  The only hope I see is to get the cost of renewable energy and EVs down to the point at which moving off fossil fuels will be painless.

          Even better, profitable.

    • ThomasGerke

      Could you take a look at those inverter prices in a german webshop?

      I am not sure what’s average and what’s not. The prices are end user prices and I expect that companys can buy them abit cheaper (10-30%). 

      http://www.solarshop.net/index.php?cPath=243&xanarioID=0dglgdhitjkn0f09ui6be3vocpvrhsdi 

      Inverters are “Wechselrichter” in German btw

    • http://cleantechnica.com/ Zachary Shahan

      thanks for the info. great to see you driving the costs down and offering a better package. best of luck to you.

      and great tip on the inverters and such. hopefully more folks will get into the game. from what i understand, just 1 or 2 companies dominate the space.

  • RobS

    In Australia we are about $3.20 pre subsidies and $2.50 after subsidies. Importantly our retail power is 25c/kwh.

    • Havey

      No that not right In Australia solar panels are 50 cent USD per watt installed current retail price for gird connected buy back power is up to 60 to 80 cent AUD kw/h on smart meter/ time day metering it all depends on the area you live.

      • Bob_Wallace

        I think you’re saying that produced power from solar panels is 50 cents per kWh.  Not per watt.

        No one is producing solar panels at 50 cents per watt.  

        • Dave IN AU

          Bob_Wallace: Regarding havey, yes it true that solar panel are been sold in Australia at 50 cent a watt, 200watt solar panel is costing 100USD. 5kw grid Solar rooftop solar system is going for $2,000 USD, we believe that cost could even drop to 20-30 cent a watt AUD/USD. Solar companies have dropped the price by 70% in the last 1 year. Even offering free installation for 1.5kw to 1.8kw grid solar system. In Australia Solar Warehouse, I just payed for 1.1kw Mono solar panels for $500 AUD this is about $492 USD.
          The USA has lost the market buying power thus Australia became rich country.

          • Bob_Wallace

            Those are amazing numbers.

            Can you provide links to any sites selling at those sorts of prices?  I’d like to see what they are offering.

            As far as I know there are no companies manufacturing for less than $0.70/watt.  (I’m using US money, by the way.)

            A quick look on the Sun Electronics page (generally the cheapest US seller) shows nothing under $1.18/watt.  And that’s for panels only.  No rack, no inverter, no wire, no installation.

            Sun seems to get their best deals from factory overruns, bankrupt companies, and “seconds”.

          • Kate.

            Bob_wallace have a look at Ben Ozman above, you will get your answer. They have a carbon tax running, Free installation under there Federal Government policy plus free solar panels to install them. No one buy solar panel any more for them self, as the Federal Government help covering the cost of the PV. Also in the States of Australia they get paid up to 60-80kw/h cent feed back to grid, they can make around $2000- $6000 quarter, plus the power company paying a extra  8-10cent kw/h on top of the 60-80kw/h cent feed back to the grid.

          • Bob_Wallace

            OK, I guess it’s the dense season here behind the Redwood Curtain.

            If one of you folks down there would write a nice clear explanation of how your carbon tax system works I would appreciate it.

            I’m now getting the feeling that “50 cents a watt” is some sort of post-government subsidy price and that may not be the case.

          • Bob_Wallace

            Looking at the “Australian Solar Warehouse” page I see only two panels offered.  
            One is a 190 watt panel for $AU525 or $AU2.76/watt.The other panel does not have a wattage rating.  Looking at the model number it might be 240 watts.  At $AU565 that would make it $AU2.35/watt.http://www.australiansolarwarehouse.com.au/index.php?route=product/category&path=35 

  • tibi stibi

    in holland the prices are close to german prices

    http://www.zonnepanelen.nl/complete-systemen/zonnestroom-systeem-2960-wp.html

     

    • John Maton

      The installed cost (as per you link) is €6674 for a 3120W system = €2140 per KW v the german average of €1776 or 20% higher.

      Of that €6674, installation accounts for €1500. Considering that the “kit” includes all of the mounting brackets, inverter, cables etc, the €1500 is paying just for labour. Rather a lot for the actual effort to install.

  • ThomasGerke

    I would indeed point out that solar power has been under constant attack here in Germany. Despite all the success it’s actually currently under very heavy attack. That’s what is to be expected when a technology biased industry is confronted with a business busting technological developement. Solar delivers benefits to end consumers by cutting out grid & power plant operators (as well as the entire fossil & nuclear fuel cycle). 
    So, the experience in Germany has been that the attacks don’t end and there is no use in trying to convince the most vocal enemies. They aren’t interessted in reality, they are into the desinformation & myth building business. However, it is possible to increase the base of supporters. That’s the way to go. :) With prices declining below end-consumer rates, that should be increasingly easy.

    What’s true is that Germany is propably the country with the highest level & concentration of renewable industry & service mobilization. It’s a handy reference to what is possible as soon as these technologies are mobilized in a similar fashion.

    My guess is that the cost difference in the US has mainly to do with the local availability of all the other equipment and services besides the solar panels. Experience in planing & installing propably also plays a role. Local manufacturing of stuff like mounting systems in combination with a local steel industry and metal & machine manufacturing sector should certainly provide an additional edge.
    The massive size of the German market also provided highly specialized S&Ms with the investment enviroment to scale up production & build specialized production lines for secondary things like special cables, mounting & tracking systems,…this certainly has been driving down costs I presume. 

    What I personally don’t understand at all is the massive price difference of solar panels when comparing different countries… Especially Japan.A Panasonic HIT modul costs 450€ in Germany and 1200€ in Japan… makes no sense at all…. Same for Kyocera, Sharp, Qcells,… Some of the newsest Japanese panels actually seem to be unavailable inside japan…. Well the Japanese solar market confuses me abit. :-S

    • http://cleantechnica.com/ Zachary Shahan

      yeah, that last bit is odd.

      on the other points: yes, and while it’s one thing to say “Germany has ________ more solar installed,” the real point is that it’s got so much more installed in a much smaller space/society. ~22 times more makes a big difference in markets.

      but that doesn’t explain why the same product (i.e. panel) is priced so differently.

      • ThomasGerke

        My observation of the Japanese market is, that consumer sophistication is very very low. The average person won’t try to get the cheapest price, so my guess is that solar companies enjoy getting paid a huge amount for their products (rising profit margins)… Though this doesn’t explain why even foreign companies are able to aggresivly expand in the japanese market.

        Perhaps this overpricing is balanced by all sorts of discounts that are usually offered. Buy a Toyota-Home and get a serious discount for a car or a “free” solar system. 
        It will be interessting how the market will develope with the new FIT in place. 

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