Installing photovoltaic cost keeps decreasing

The installation cost of photovoltaic, measured in US$ per W, varies from over 2$ in Japan to less than one in India and everywhere is decreasing. Credit GTM Research

A study from GreenTech Media shows a continuous decrease of photovoltaic cost that is expected to continue in the coming years. This cost is measured in US$ per W installed and takes into consideration the photovoltaic panel, the inverter, the SBOS (Structural costs like civil engineering) and EBOS (Electrical costs like cabling).

Cost of photovoltaic installation in various Countries split into its components in the first half of 2017. Credit: GTM

It is interesting to notice that the cost of the panel (Module) is roughly the same in all Countries considered (Germany has the highest cost, the other Countries have almost the same cost) and the cost of the inverter is the same everywhere. This is a signal that technology has become a commodity there are no difference across markets.

The real difference is in the soft cost (labour) and in the connected cost of civil engineering where Japan has, by far, the highest leading to a price per W that is double of the other Countries.

However, the forecast for the coming years foresee a linear decrease of installation cost everywhere.

India has the lower cost although some caveats on the quality of components used in the panels exist. They might result in higher maintenance cost due to failure and need to replace the panel.

The decrease of installation cost should push the adoption of photovoltaic. However, in many Countries adoption has been driven by fiscal policy and by forcing public utilities to buy the excess of produced power from residential customers. This is likely to decrease (particularly the fiscal incentive) so it is not a given that photovoltaic will see an increased adoption in the next decade. Part of it will be dependent on the availability of local storage, and of its cost.

Tesla is clearly supporting local power storage with its Powerwall offer.  The downside is the cost of local electricity storage (a Powerwall is over 5,000$ and if you add the installation cost it will get closer to 8-9,000$).

The growth of electrical cars in the next decade, coupled with local power storage will surely be a main driver for adoption of photovoltaic.  For this, however, we will need to wait for a new generation of local electricity storage going beyond the 7kW of peak power output they have today (an electrical car is using 20kW for a faster charge).

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the New Initiative Committee and co-chairs the Digital Reality Initiative. He is a member of the IEEE in 2050 Ad Hoc Committee. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.