NREL: Soft Costs Now Largest Piece Of Solar Installation Costs
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 Edition” and “Financing, Overhead, and Profit: An In-depth Discussion of Costs Associated with Third-party Financing of Residential and Commercial Photovoltaic Systems” — 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.
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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.
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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