Home


Upcoming Events
Sustainability Summit Asia
Sunway Resort Hotel and Spa, Persiaran Lagoon, Petaling Jaya, 46150, Malaysia,
11/15/18 - 11/15/18
Future of Utilities: Smart Energy
The Tower Hotel, St Katharine's Way, Greater London, E1W 1LD, United Kingdom,
11/20/18 - 11/21/18
SPE Workshop Horizontal Wells Survey
West-Siberian Scientific and Research Institute of Geology and Geophysics, 48 Respubliki Str., Tyumen 625000, Russia,
11/21/18 - 11/21/18
Benelux Infrastructure Forum 2018
APOLLO HOTEL AMSTERDAM, Apollolaan 2, Amsterdam, Netherlands,
11/21/18 - 11/22/18
Benelux Infrastructure Forum 2018
APOLLO HOTEL AMSTERDAM, Apollolaan 2, Amsterdam, Netherlands,
11/21/18 - 11/22/18
Submit an Event
View All Events


Sain Featured Employer

Solar on Every Home? NREL Outlines Pathways to Ultra Low-Cost Residential Solar

 

Follow energycareer on Twitter

Sign-Up for Free Energy, Facility, Power Newsletter (EFPN) newsletter

 

 

 

Since 2010, solar photovoltaics (PV) have seen dramatic cost reduction across the commercial, residential, and utility sectors. For example, the levelized cost of energy (LCOE) for residential PV has declined from 52 cents per kilowatt hour (¢/kWh) to 15.1 ¢/kWh between 2010 – 2017PDF. In 2016, the Department of Energy (DOE) established new cost reduction targets for PV, including a 5 ¢/kWh target for residential PV by 2030. Looking forward, NREL estimates that residential PV may reach 9 ¢/kWh by 2030, based on current cost reduction trajectories. As a result, innovative cost reduction strategies are likely necessary to achieve the 5 ¢/kWh DOE target.        

If the solar industry reaches this DOE target, it could dramatically alter the energy market and present a future where residential PV becomes a standard, cost-effective home installation, versus a luxury or long-term investment. A recent NREL report models a set of pathways that the industry could follow to realize this future. The analysis focuses on two key markets for residential PV cost reduction: installing PV at time of roof replacement and installing PV at time of new construction. These two market segments were selected because each offers significant cost reduction opportunities while representing a 30 gigawatt (GW) annual market nationwide.

The report identifies four key cost reduction opportunities that could result in significantly lower residential PV costs by 2030, including:

  • Market maturation where small, medium, and large residential solar installers procure modules and other components at or near wholesale market prices.
  • Business model integration where solar, roofing, and home builders integrate their businesses or become closely aligned in the roof replacement and new construction markets
  • Product innovation where low-cost, potentially integrated PV and roofing products proliferate in the market
  • Economies of scale where solar installers maximize savings by deploying multiple systems simultaneously.

Given uncertainty regarding market interest and uptake of these four cost reduction opportunities, the report models two pathways for each market segment (roof replacement and new construction). Within each pathway, the less aggressive pathway represents a more incremental shift from business as usual, while the visionary case maximizes savings potential in each market segment.

Though it is possible for the industry to achieve ultra-low cost residential PV in both market segments, there are a variety of barriers to this future. First, each pathway is predicated on market maturation that allows small and mid-scale solar companies to negotiate very low module and component costs as large installers do. This allows for significant supply chain cost reductions associated with higher priced modules and historical inventory. Maximizing this savings opportunity will require significant innovation in service and support industries and streamlined procurement processes through 2030.

Second, both visionary pathways rely on a fully integrated, low-cost PV and roofing product. This product eliminates PV racking costs, while reducing installation labor and shipping costs because the roof and PV system is installed in unison. Though integrated PV products are gaining market attention, such as the Tesla Solar Roof, achieving comparable or lower costs for these systems will require significant investments in research and development. This is because developers have so far struggled to reduce equipment and installation costs to compete with traditional panels.

Third, business model integration offers critical savings associated with sales and marketing, overhead, and labor. The idea is that solar can be integrated into existing roofing material and new construction sales practices with little added costs. This integration also eliminates the need for duplicative back office materials including rental space and software among other expenses. Though there are many examples of solar and roofing companies integrating their businesses, this approach is not widespread, in either the roof replacement or new construction segments today.

Fourth, economies of scale provide additional labor, permitting, inspection, interconnection, and customer acquisition savings. These savings are predicated on the ability to install multiple PV systems in succession. These savings may be limited by construction timelines, development size, permitting delays, and workforce management challenges. These challenges, along with potential added costs from incorporating solar into new construction, particularly relating to permitting and inspection may further offset savings.

Despite these barriers, the report illustrates that there are pathways the solar industry could take to achieve low-cost residential PV by 2030. If the industry realizes these cost savings opportunities it could prove transformative in the energy market, resulting in a future where PV is ubiquitous.

The full report can be accessed at https://www.nrel.gov/docs/fy18osti/70748.pdf

Return Home

 

Follow energycareer on Twitter