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Tuesday, January 14, 2025

U.S. Photo voltaic PV Market — Costs Go Up, Costs Go Down


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The Nationwide Renewable Power Laboratory (NREL) has launched its annual value breakdown of put in photo voltaic photovoltaic (PV) and battery storage programs. U.S. Photo voltaic Photovoltaic System and Power Storage Price Benchmarks, With Minimal Sustainable Worth Evaluation: Q1 2023 particulars put in prices for PV and storage programs as of the primary quarter (Q1) of 2023.

Annually, NREL analysts publish benchmarks that monitor photo voltaic value developments to assist the U.S. Division of Power Photo voltaic Power Applied sciences Workplace’s purpose to speed up the development and deployment of photo voltaic expertise. These benchmarks are bottom-up value estimates of all facets of PV and power storage system installations.

Benchmark Costs Declined for Residential Methods, Elevated for Utility-Scale Methods

Lots of the developments that characterised the 2022 benchmarks—together with excessive and unstable part costs and competitors for restricted provides—appeared to minimize in 2023.

The inflation-adjusted value benchmark rose in 2023 for utility-scale PV programs however fell for residential PV programs owing to current developments in community improve prices, Inflation Discount Act manufacturing tax incentives, and different value drivers

In comparison with final yr’s report, modeled market costs for put in residential PV programs have been 15% decrease this yr. Though steadiness of system prices have been greater, these elevated prices have been greater than offset by decrease module, inverter, logistics, and buyer acquisition prices, leading to total value reductions for the consultant residential system.

Nonetheless, modeled market costs for utility-scale programs have been 8% greater in Q1 2023 than in Q1 2022. Increased inverter, labor, and electrical steadiness of system (EBOS) prices greater than offset decrease module, structural steadiness of system (SBOS), and different delicate prices within the 2023 report.

“The prices of community upgrades wanted to fulfill interconnection necessities have risen quickly because the variety of initiatives within the interconnection queue has elevated,” stated the report’s lead writer, Vignesh Ramasamy. “Together with community improve prices is a method we improved our mannequin this yr, and people prices account for a lot of the rise in EBOS prices in contrast with final yr.”

Inflation Discount Act Manufacturing Tax Incentives Are Doubtless Affecting PV and Storage System Prices

This yr’s Q1 2023 benchmarks replicate the impression of Inflation Discount Act (IRA) tax incentives to producers for domestically producing and promoting clear power parts.

Quite a few U.S. producers are doubtless profiting from the IRA’s Part 45X Superior Manufacturing Manufacturing Tax Credit score, so NREL analysts accounted for this credit score in modeling domestically manufactured part costs.

The price of any PV system—residential, industrial, or utility-scale—that makes use of domestically produced parts is more likely to be affected by the manufacturing tax credit score. At one excessive, a U.S. producer who receives the credit score may cross the complete worth to the customer as a decrease part value. On the different, the producer may depart the worth unchanged and retain the complete credit score as a part of their margin. NREL analysts cut up the distinction when modeling the results of the tax credit score on domestically produced parts, assuming half of every credit score was handed to installers and half was retained by producers.

For additional element and context on how the manufacturing tax credit could possibly be affecting prices, the authors advocate consulting the associated fee figures and methodology within the report.

Group Photo voltaic Prices Are Benchmarked for the First Time

Group photo voltaic is a mannequin for distributing photo voltaic power that enables clients to share in the advantages of a big off-site PV or PV-plus-storage system, typically receiving a month-to-month invoice credit score for his or her portion of electrical energy era.

Prices for putting in neighborhood photo voltaic resemble the prices of putting in a industrial PV system for a single buyer, with two distinctions. Group photo voltaic programs incur extra preliminary prices to accumulate quite a few residential and industrial subscribers, they usually incur ongoing prices of subscriber administration, together with invoice administration in addition to advertising and marketing and buyer acquisition to handle buyer turnover.

“Group photo voltaic is an more and more common method to broaden entry to photo voltaic power in the US,” report co-author Jarett Zuboy stated. “This yr we modeled subscriber acquisition and administration bills to assist put the prices of neighborhood photo voltaic into context with the fairness advantages it offers.”

New Modeling Method Will increase Transparency Whereas Increasing Part-Stage Element

For this yr’s benchmark report, the Photo voltaic Power Applied sciences Workplace developed a brand new bottom-up PV and storage value mannequin with NREL analysts to make the benchmarks less complicated and extra clear—whereas increasing the mannequin to deal with parts not beforehand benchmarked.

The brand new strategy builds on the associated fee fashions and strategies NREL has used for the previous decade of PV benchmarking. Nonetheless, it depends extra on direct inputs from trade consultants, and it makes the aggregated and anonymized outcomes from these sources publicly obtainable on the subcomponent stage. Such transparency into detailed prices can be utilized to establish the drivers of put in costs and alternatives for system value reductions.

The Q1 2023 information and mannequin can be found in NREL’s Information Catalog.

“We developed our fashions for years to enhance our value benchmarks, however the fashions themselves have been largely inaccessible from the general public’s perspective,” Ramasamy stated. “The brand new mannequin we developed with the Photo voltaic Power Applied sciences Workplace offers the general public better entry to the inputs and assumptions that affect the benchmark outcomes.”

Obtain the report U.S. Photo voltaic Photovoltaic System and Power Storage Price Benchmarks, With Minimal Sustainable Worth Evaluation: Q1 2023.

Contact report authors Vignesh Ramasamy or Jarett Zuboy with additional questions.

Be taught extra about NREL’s photo voltaic put in system value evaluation.

By Sara Fall and Harrison Dreves, courtesy of NREL.

 


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