Analysing solar PV installation costs to assess benefit of gluing on panels

Yesterday, nextbigfuture reported on a new system architecture for rooftop solar panels which involves gluing the solar panels directly onto a roof. Ordinarily, installing and connecting a new array of rooftop solar panels takes days, weeks, or even months because the hardware is complex and various permits are needed. Researchers completed the process in about an hour.

They claimed installation and permit-related expenses currently account for more than half of the overall cost of a new solar power setup. “By simplifying the system so that it’s like installing an appliance, we envision that the soft cost will be virtually eliminated,” says Christian Hoepfner, director of the Fraunhofer Center for Sustainable Energy Systems, which developed the system. Doing so would lower the cost of a typical residential solar installation from $22,000 to as little as $7,500.

The backers of the glue on approach are also trying to adjust the permitting and regulations to further lower costs and reflect the simplicity of the plug and play approach. They want automatic permitting. Do you have to pay $3000 in permits for installation of a fridge which costs $75-100 to install ? Or how about permits for a plug in air conditioner.

They also want house builders to include preinstalled outlets designed for solar panels similar to the preinstalled outlets for high voltage dryers.

Here is the National Renewable Energy Laboratory bottom up analysis of photovoltaic solar panel installation costs published December 2013.

Vastly simplified installation where all positioning and electrical connections are complete in one hour could cut down the installation labor detailed below. Also, solar company competition would then eliminate the installer profit to reflect the one hour installation instead days of installation. Delivering and installing refrigerator is about $75. A one hour glue on and plug in solar panel installation might be brought down to $200. This would bring the costs of solar power down by one third because of the super-easy installation (install labor and installer profit). This would bring the costs down by a total of one half to two thirds if there was auto-permitting and preinstalled outlets and electrical.

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.

In the first half of 2012, soft costs represented the majority of all costs — 64% of the total price for residential systems, up from 50% of the total price in the first edition. Similar results were found for small and large commercial installations — 57% of the total cost for small (less than 250 kilowatts) commercial systems (up from 44%); and 52% of the total costs for large (250 kilowatts or larger) commercial systems (up from 41%).

For residential systems, the greatest soft costs were supply chain costs ($0.61/watt), installation labor ($0.55/W), customer acquisition ($0.48/W), and indirect corporate costs ($0.47/W), such as maintaining office management and accounting functions. Other soft costs examined for the report included costs for permitting, inspection, interconnection, subsidy applications and system design.

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