Cost of turnkey PV in Germany drops
A German market analyst says the cost of an installed kilowatt of photovoltaics dropped by more than 20 percent in 2010. Interestingly, the cost of an installed PV kilowatt in the US seems to be at least 60 percent higher.
According to Germany's PhotovoltaikZentrum, which conducts surveys of installation prices in Germany, the price of installed PV dropped by 20.58 percent in 2010 to 2,740 euros per installed kilowatt. The survey is based on responses given by 2,758 array owners from all over Germany who installed arays smaller than 100 kilowatts in 2010.
The price decrease is the greatest since the survey began in 2006, when an installed kilowatt of photovoltaics cost around 5000 euros. In 2007, prices had only dropped slightly down to around 4,800 euros, but prices began plummeting in 2008, when an installed kilowatt cost around 4,300 euros, a decrease of just over 10 percent. In 2009, prices then dropped by 19.77 percent to around 3,450 euros. In total, the price of installed photovoltaics has dropped by around 45 percent in Germany since 2006.
It is important to keep in mind that the prices for crystalline panels on the spot market in Germany have fallen to around 1.8 euros per watt for modules from Europe and Japan and to around 1.60 euros for modules from China. It is therefore roughly possible to estimate what the local added value is even if the panels themselves are imported from China. If we assume that the difference between 2.70 (installed price) and 1.60 euros per watt (module price) is locally made installation equipment and local services charged by installers, then the local added value is potentially already at 42 percent in Germany even if the panels are imported from China.
Of course, many installers will not pay the spot market price for panels, but rather a lower wholesale price, which will increase the margin for local added value even further, so the estimate above can be considered conservative. And as the cost of panels and sales continues to drop, the share of local added value from installation costs can be expected to continue to rise. In a way, some of the "local content" regulations in places like India and Ontario are already redundant in Germany, which has never had any requirement for local content in its feed-in tariffs.
Furthermore, Germany proves that feed-in tariffs with a regular schedule of decreasing rates can bring down prices drastically. While the official figures are not yet in from Germany's Network Agency, the German Solar Industry Association estimates that some 7-8 gigawatts were newly installed in Germany in 2010. Spread across an estimated 230,000 solar arrays, the average array size comes in at roughly 32.6 kilowatts, which shows that Germany remains a market largely driven by homeowners. Thanks to this unparalleled growth, a strong wholesale market and a large pool of skilled installers has been created in Germany.
At the current exchange rate of roughly 1.33 US dollars per euro, 2,740 euros is equivalent to 3,644 US dollars, but the cost of installed photovoltaics in the US is nowhere near 3,600 dollars. In December, the Lawrence Berkeley National Laboratory published its estimates of the installed cost of photovoltaics in the US for 2010. After stagnating at around 7.50 US dollars per watt in 2008 in 2009, the price of an installed array smaller than 100 kilowatts in California had fallen in the first six months of 2010 to 6.1 dollars, compared to 5.7 dollars per watt (or 5,700 dollars per kilowatt) in New Jersey -- but prices can be expected to be much greater in other states, where PV markets are far less mature.
Those who argue that feed-in tariffs keep the cost of photovoltaics high should explain why arrays in the US cost at least 60 percent more than they do in Germany. (cm)