Small German solar roofs still cheaper than US utility PV
While the recent forecast published by Solarbuzz has drawn a lot of attention because it found 17 gigawatts in the pipeline, perhaps the most interesting finding is that even utility-scale photovoltaics remains more expensive in the US than the smallest residential systems in Germany.
In the latest edition of the United States Deal Tracker published last Wednesday, the market researchers at Solarbuzz found more than 17 gigawatts of non-residential photovoltaics in the pipeline across 601 systems ranging from 50 kilowatts to 500 megawatts in capacity up to 2015, bringing the total up to 20.3 gigawatts of non-residential arrays for the period from 2010 to 2015. It is unclear why Solarbuzz chose to have a 500 MW ceiling. A few weeks ago, Sempra Energy received a loan guarantee from the US Department of Energy for a 700 megawatt PV project to go up outside of Phoenix, Arizona, so the question is whether that plant is counted or not; Solarbuzz has yet to respond to a query about the matter.
While there is no doubt that the solar market is clearly growing in the US, it should also be pointed out that the US has repeatedly failed to meet a number of targets for renewables and photovoltaics in the past, so there is no guarantee that the US will have 20 installed gigawatts by 2015.
The state of California alone makes up nearly 2/3 of this pipeline capacity. Among project developers, SolarBuzz found that the biggest 12 currently make up half of the pipeline, with the top three solar panel manufacturers being First Solar and SunPower (both of the US) along with China's Suntech. Interestingly, the leading inverter suppliers within that pipeline are reportedly Advanced Energy and Satcon Technology, not global market leader SMA of Germany. The first two firms are from the US, so there must be some domestic preferences on the US solar market.
Perhaps most surprisingly, the study found that the planned arrays larger than one megawatt have an average installed price of $4.50 per watt, with only a third of the systems in the pipeline coming in at prices below four dollars per watt. As Renewables International reported in January, the installed system price of photovoltaics in the US was easily 60 percent above the level in Germany in 2010 for equivalent system sizes (arrays smaller than 100 kilowatts).
At an exchange rate of roughly 1.40 dollars to the euro, $4.50 works out to be roughly 3.15 euros, far above the 2.74 euros that small arrays cost on average in 2010 in Germany last year – and keep in mind that here we are comparing the largest, cheapest arrays in the States with great economies of scale to the smallest – and hence costliest per installed watt – category in Germany.
While this outcome is nothing surprising to those who have compared installed-system prices for PV in the US and Germany over the past few years, it is nonetheless surprising to see how little attention is paid to this aspect. The press largely seems to be focusing on the tremendous pipeline size (which would make the US market as big as Germany's was last year over the next five years), not on the more obvious question of why small roof arrays in Germany are less expensive than utility-scale solar in sunny southern California and Arizona.
Clearly, there is some severe profit-taking in the US, which is ironic because so many US politicians and solar industry representatives still claim that they don't want German-style feed-in tariffs for solar power because of the alleged impact on ratepayers. Or as one website put it, "reductions in feed-in tariffs across Europe" have made the US "one of the most compelling PV market growth opportunities anywhere in the world." In other words, from the perspective of businesses that want a large profit margin, you would want bids like those in the US, but if you want cheap solar power, take feed-in tariffs.
As Solarbuzz's statistics show, actual market figures continue to clearly illustrate that Germany's feed-in tariffs for photovoltaics make installed system prices cheaper than US-style bidding processes. (Craig Morris)