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US PV prices plummet but still twice as expensive as Germany

The price of an installed PV array in the US continues to drop, but the US is still not able to keep up with falling prices in Germany. While the US Department of Energy is funding research into deployment, Germans believe the best solutions will come from a market , so they create a one.

Two of the main research centers for renewables in the United States – the National Renewable Energy Laboratory (NREL) and the Lawrence Berkeley National Laboratory (LBNL) – published two reports last week, one of them taking an historic view of price trends for photovoltaics (PDF), whereas the other takes a more theoretical look at how soft costs can be reduced PV (PDF). The authors found that the installed price of solar arrays fell by 11 to 14 percent in the US from 2010 to 2011, and prices continue to drop in 2012.

Specifically, the price of a fully installed small roof array fell from 4.39 USD per watt last year to 3.91-3.77 dollars per watt this year; nonetheless, photovoltaics still remains roughly twice as expensive in the US as in Germany. In 2012, the price of large arrays fell to around 2.95-3.05 USD per watt, compared to 3.43 USD in 2011. "Hard costs" continue to drop, with solar panels themselves only making up 32 percent of the price of an installed array – compared to 67 percent in 2008, as GTM Research reported in November.

The main problem is therefore "soft costs," and a previous report by LBNL discussed the problem in greater detail. In short, the US still does not have feed-in tariffs for photovoltaics, so the processes for permitting and financing are unnecessarily complicated. But instead of switching to feed-in tariffs, the United States continues to subsidize research – paradoxically, even research into deployment.

For instance, the United States Department of Energy announced last week that 29 million USD would be made available to four projects "aimed at improving the grid connection and reducing installation costs through innovative plug-and-play technologies and reliable solar power forecasts." Of that 29 million, 21 is to be invested in plug-and-play PV systems.

 - Over the past few years, analysts have underestimated the speed with which photovoltaics was becoming cheaper.
Over the past few years, analysts have underestimated the speed with which photovoltaics was becoming cheaper.

Why is the US solar market not able to come up with these deployment innovations on its own? Because the US is not deploying enough. Over the past few years, German installers and engineering firms have sped up the installation process considerably. Solar panels used to have to be individually screwed onto substructures. Now, they are clipped into them – including an antitheft lock. All of this innovation came about without any specific governmental research subsidies; Germans believe the market will come up with the best solution, so they create a market.

Nonetheless, the amount of subsidies the US devotes to solar should be seen in an international context. The 21 million the DOE is devoting to "deployment research" pales in comparison to the 1 billion USD that China's Development Bank is lending to a single Chinese PV manufacturer, as was announced on the same day. (Sven Ullrich / Craig Morris)

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1 Comment on "US PV prices plummet but still twice as expensive as Germany "

  1. Photomofo - 11.12.2012, 20:35 Uhr (Report comment)

    The Jinko loan is no worse or better than the US grant program. At least the Jinko loan may end up going towards distributed projects. Much better than a few farms that the multi-billion DOE loan program supported.

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