Reducing Solar PV Soft Cost: Focus on Installation Labor:
Balance of System (BoS) costs now account for more than 60 percent of the price of U.S. rooftop Pholtovoltaic (PV) Systems. BoS costs are 75 percent lower in Germany, the worldwide solar market leader. With funding support from the Department of Energy's Sunshot Initiative and Rocky Mountain Institute (RMI) Donors, Georgia Tech Research Institute (GTRI) and RMI are partnering to explore the specific components of this cost divide between the U.S. and Germany
While the cost of permitting, hardware procurement, customer acquisition, and financing is high in the U.S., this report details how labor cost reduction represents the single most tangible near-term strategy that installers can pursue to offer more attractive prices. By aggressively pursuing new designs and adoption of the most efficient installation practices, U.S. solar installers could reduce labor costs by 64 percent—effectively undercutting observed installation labor costs in Germany. Holding hardware and non-installation labor costs constant, the overall installed costs of a U.S. rooftop residential system could be reduced by 10 percent.
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- Approach - RMI and GTI have chosen to use Time and Motion studies, a business efficiency technique that is used to measure and reduce waste within a system. By directly observing and documenting the timing and physical motion of each process step, the project will identify key drivers of the installation efficiency difference between the U.S. and Germany, providing a quantitative basis to systematically reduce installation costs for individual installers and the industry as a whole.
- Description - These studies will require partner companies that will allow RMI and GTRI to visit and observe residential and commercial installations at sites in both Germany and the U.S. These on-site visits are expected to have minimal impact on actual system installations.
- Benefits - In addition to a high-level summary comparing company performance with the performance of the rest of the industry, participating installers will receive a detailed report that highlights the main drivers and opportunities for increasing installation efficiency. See here for an example of the detailed report (with examples of statistical analysis and/or visual maps).
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1) Lawrence Berkeley National Laboratory: Why Are Residential PV Prices in Germany So Much Lower Than in the United States? (2012)
2) National Renewable Energy Laboratory: Benchmarking Non-Hardware Balance of System (Soft) Costs for U.S. Photovoltaic Systems Using a Data-Driven Analysis from PV Installer Survey Results (2012)