Utility-scale solar photovoltaic systems cost up to 15% less per watt

by Talk Business & Politics staff ([email protected]) 552 views 

Between 2010 and 2016, the per-watt cost of utility-scale solar photovoltaic (PV) systems fell about 10% to 15%, according to the U.S. Energy Information Administration. The EIA based this information on various sources that estimate the costs.

Analysts estimate the costs of generating technologies using total reported costs and aggregated component costs. Both help to explain the cost of utility-scale solar PV systems.

Reported costs includes actual project data to provide empirical analysis on a range of project costs in the market. These costs comprise of variables in project design, location and real-world timing. Some of the issues with using reported costs are the uncertainty in them related to interconnection costs and financing expenses and that data only shows the projects completed, not the projects started in a given year.

Component costs offer more detail on the impact of change in component-level technology and costs, and this can be significant in the fast-paced solar photovoltaic market. Component costs often take into account the top and common project practices but sometimes don’t include a wide range of project cost factors, according to the EIA. Costs that exclude financing expenses, called overnight estimates, show the cost as if the plant could be built instantly without financing. Component costs might not include all potential costs such as developer profit margins.

In 2013, the EIA started to collect data on total capital costs from project owners. To maintain confidentiality, the agency publishes the value of projects based on capacity. The data includes facilities with at least 1 megawatt of alternating current, and owners are asked to exclude government incentives and financing expenses from reported costs.

The U.S. Department of Energy’s National Renewable Energy Laboratory published estimates of total system costs in the Solar PV System Cost Benchmark. The EIA also projects future capital costs as part of its Annual Energy Outlook.

In 2018, capital costs to install fixed-tilt solar photovoltaic systems are expected to be $1.85 per watt in alternating current, and for single-axis tracking systems, installation costs are expected to be $2.11 per watt in alternating current.