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Clean Power soft-costs

Published on December 12th, 2013 | by Joshua S Hill

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NREL: Soft Costs Now Largest Piece Of Solar Installation Costs

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December 12th, 2013 by  

Two reports published by the US Energy Department’s National Renewable Energy Laboratory (NREL) show that soft costs — such as financing and other non-hardware costs — now make up the largest section of solar installation costs, coming in at 64% of the total price for residential solar energy systems.

The two reports — “Benchmarking Non-Hardware Balance-of-System (Soft) Costs for U.S. Photovoltaic Systems, Using a Bottom-up Approach and Installer Survey – Second EditionPDF” and “Financing, Overhead, and Profit: An In-depth Discussion of Costs Associated with Third-party Financing of Residential and Commercial Photovoltaic SystemsPDF” — combine to show just how soft costs are becoming an increasingly more important part of solar installations.

“The two new reports, along with previous reports, provide a comprehensive look at the full cost of installing solar, while delineating and quantifying the various contributors to that final cost,” NREL analyst Barry Friedman said.

The first report showed that in the first half of 2012 soft costs represented the majority of all costs — 64% of the total price for a residential system, up from 50% as identified in a previous report conducted in 2012, and similarly high percentages for small and larger commercial installations.

soft-costs

Residential soft cost categories for the first (2010 data) and second (2012 data) editions of the benchmarking study. For the first edition of the benchmarking study, 2010 “all other soft costs” had not been differentiated. For the second edition, we quantified five sub-categories within this broader category.

The second report focused on the five sub-categories identified in the previous report only as ‘other soft costs’ — namely, transaction costs, indirect corporate costs, installer/developer profit, supply chain costs, and sales tax.

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About the Author

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.



  • Matt

    Notice that other soft cost went up between 2010 and 2012. Labor, permit, and acqu cost are down from $1.50 to about $1.20. But other cost got larger. :( Can’t see it but wonder if it is that 3rd party financing cost?

    • http://zacharyshahan.com/ Zachary Shahan

      could end up being a big thorn in our side…

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