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Published on June 26th, 2014 | by Rocky Mountain Institute

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US Could Follow Australian & German Practices With Solar PV Systems

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June 26th, 2014 by  

Rocky Mountain Institute

By Robert McIntosh & Koben Calhoun

New RMI/GTRI analysis shows how to reduce U.S. solar PV costs through installation labor efficiency

Download the report

In 2013, the United States installed more solar photovoltaic (PV) capacity than either Germany or Australia for the first time ever. (The U.S. has triple their combined population, so arguably this should have happened long ago…). With the decline of feed-in tariffs and other incentives in Germany, it is likely that the U.S. will continue to outpace that country in new PV installations. However, the U.S. continues to lag behind global PV leaders Germany and Australia in another important category: prices for residential systems installations. As of Q2 2013, the average installed residential system price was $4.93/W compared to Germany’s $2.21/W and Australia’s $2.56/W. That needs to change.

Whether you look at U.S. DOE SunShot targets or RMI’s own Reinventing Fire vision, which has the U.S. solar market scaling from 4.5 GW PV installed per year to 20 GW, system costs have to come down to accelerate residential and commercial customer adoption. A new analysis and report from Rocky Mountain Institute (RMI) and Georgia Tech Research Institute (GTRI)—Lessons from Australia: Reducing Solar PV Costs Through Installation Labor Efficiency—identifies opportunities for the U.S. solar market to take important steps in that direction.

Non-hardware costs (permitting/inspection/interconnection (PII), customer acquisition, installation, and margins/overhead) now dominate system prices in the U.S. For sub-10-kW systems, 80 percent of solar system cost decline in the U.S. since 2008 has been due to hardware price reductions. In the U.S., non-hardware costs now account for 70% of system costs. Setting aside margins/overhead, the U.S. spends $1.22/W on PII, customer acquisition, and system installation. PV leaders Germany and Australia, on the other hand, spend just $0.33/W and $0.65/W, respectively. The U.S. clearly can and should pursue significant cost reduction opportunities to eliminate this difference.

RMI and GTRI previously launched a PV installation labor data collection and analysis effort under the SIMPLE BoS project, which investigated differences in non-hardware costs between the U.S. and Germany, including installation labor. This 2013 report provided a detailed breakdown of primary drivers of PV installation labor cost differences between the U.S. and Germany. Now, in 2014, RMI and GTRI are following up on that groundbreaking work with further investigation of Australian solar installations.

Australia has emerged as a dominant player in the world residential solar market, with more than 10 percent of households possessing a solar system on the roof and system prices rivaling Germany’s. Even as feed-in tariffs (FITs) have declined, demand in Australia for residential rooftop solar has remained high and costs have continued to decline. Much of this is due to a focus on customer-owned PV, and thus an extremely competitive marketplace around system cost. Both retailers and installers have been forced to lean processes in order to offer lower pricing and gain market share; they rely on high volume rather than high margin to remain profitable. According to our on-site analysis, Australian installers are averaging 6.1 labor-hours per kW solar installed, while the U.S. is more than 50 percent higher at 9.4 labor-hours per kW installed. This is similar to averages observed in other industry surveys and studies.

Unlike Germany, Australia does not use motorized lifts, scaffolds, or other advanced installation equipment. Instead, economic incentives drive labor—installers in Australia receive a flat rate per installation, and thus make greater profit by mounting more systems in less time. That Australian installers were able to shift so quickly towards a one-day install as an industry standard indicates that Germany is not an outlier; optimized installations are possible and should be pursued at both the U.S. and international levels.

We noted several factors that may increase efficiency based on observations and analysis of installation practices in Australia, Germany, and the U.S.:

  • Optimizing the pre-installation process
  • Reducing time spent on base installations, especially for clay-tile roofs
  • Pursuing rail designs that minimize installation labor
  • Reducing the number of meters installed in each electrical system to monitor PV output
  • Viewing the one-day installation goal as an opportunity to reduce time spent on non-production activities such as meals, travel, breaks, setup, and cleanup

These opportunities vary in magnitude, but in combination could have a significant impact on the number of labor-hours/kW U.S. installers typically invest in system installations. We believe installers in the U.S. could approach or go beyond Australian levels of efficiency by pursuing these primary measures, as well as other opportunities that help the industry approach the one-day installation as standard. If it can be done in Australia and Germany, there is no reason it cannot be done in the U.S.

We hope this report on Australia, the report on Germany, and all follow-on work under the SIMPLE BoS project will help the U.S. industry continue to reduce solar PV costs and enable the widespread, cost-effective deployment of residential solar PV systems.

Download the report

Source: Rocky Mountain Institute. Reproduced with permission. 

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About the Author

Since 1982, Rocky Mountain Institute has advanced market-based solutions that transform global energy use to create a clean, prosperous and secure future. An independent, nonprofit think-and-do tank, RMI engages with businesses, communities and institutions to accelerate and scale replicable solutions that drive the cost-effective shift from fossil fuels to efficiency and renewables. Please visit http://www.rmi.org for more information.



  • StefanoR99

    Anyone have a recommend for an installer in the Bay Area?

    We want to source the hardware myself from somewhere like wholesalesolar which means we will need an installer who wont be looking to rip us off.

    • Bob_Wallace

      Try Yelp. I’ve seen a few installers reviewed in other places. Haven’t checked the Bay Area

      • Ronald Brakels

        Oh right. For some reason I was thinking Stefano was in Australia and I was wondering which bay. Depending on legal requirements, I suppose one could find a handy person and get them to install the racks and panels, and then get an electrician to wire them up and do the grid connection. There are two possible advantages to doing it this way. One, It may be cheaper than using an installer who does it all themselves, and two, you could introduce the handy person and the electrician and they could go on to become solar installers themselves. Maybe they’ll even get married.

        Note: This may not be a good idea.

        • JamesWimberley

          Yes. The competent, experienced installers will have have their own preferred sources of supply and can usually get a trade discount because they buy in quantity. Inform yourself about prices on websites by all means, then IMHO go for the best combination of price and quality on an all-in deal. Shawn Roe’s website (link) is useful.

        • StefanoR99

          Lol

      • StefanoR99

        Will give Yelp a go, it’s frustrating as following the news here you know what you *should* be paying to go solar, but that’s not what a lot of installers want to charge. Too many still think solar = time to rip off.

    • philofthefuture

      Did you ever consider doing the work yourself? It really isn’t that hard, I’ve done 10K on my roof and recently another 20K on a hillside.
      I’d recommend racking and ancillary items from:

      http://solarelectricdistributor.com/

      Wholesale solar is not usually the best on pricing. I used these guys for the modules but definitely search around as prices change all the time.

      http://www.directwholesalesolar.com/

      You will substantially reduce your outlays the more you can do, the wiring is actually pretty simple if you or a neighbor understands basic electricity. The only thing special about solar is you’ll need metallic conduit, (Home Depot), from the roof to your disconnect and it has to be grounded with a grounding washer, (HD again). The other thing is safety labels, search the web for a vendor and they can walk you through what you will need.

  • JamesWimberley

    On the other hand, both Australia and Germany have now followed the US lead in transitioning from simple, clear and effective solar policies to opaque, complex and uncertain ones designed to protect incumbent utilities.

    • heinbloed

      After complaints from the industry about the difference in electricity prices (“we gonna go emigrating …”) something needed to be done.

      http://www.agora-energiewende.de/fileadmin/downloads/publikationen/Analysen/Comparing_Electricity_prices_for_industry/Agora_Comparing_Electricity_Prices_for_Industry_web.pdf

      A good article (in German) today:

      http://www.heise.de/tp/news/EEG-Novelle-Gabriels-Theaterdonner-2239307.html

    • Ronald Brakels

      Well, no. Not really. What the current Coal-ition government is trying to do is make things much simpler. No Renewable Energy Target inventive, no solar feed-in tariffs, no carbon price, no research and development. Really their goal couldn’t be simpler. No new solar installations and no new wind capacity. Not where it could interfer with the fossil fuel interests of the Thomas the Tank Engine Club, which is everywhere. Soon I expect they will make things even simpler by openly admitting that they are actually Captain Planet cartoon villains that used a magic ticket to enter our world.

      As for commerical rooftop solar, that has never been really clear and free of interference, so we can’t really be said to be transitioning to something worse there.

      • UKGary

        For Australia, it looks to me as if the sums add up even without subsidy for both domestic and commercial clients with a reasonable proportion of self consumption through avoided electricity purchase.

        • Ronald Brakels

          It is then they will bring out the Spanish Inquisition. The two main weapons of which are retroactive taxes and fines, the banning of stand alone non-grid connected solar power, and a fanatical devotion to serving the interests of incumbant fossil fuel interests.

          But fortunately not even climate change denying coal billionaires can apparently completely stomach the Coalition’s nonsense anymore with Clive Palmer, who is building a repilica of the Titanic in China, now blocking some key parts of the Abbott Government’s attempt to axe the environment.

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