Study into why German PV is cheaper than US

15. February 2013 | Applications & Installations, Global PV markets, Industry & Suppliers, Markets & Trends, Top News | By:  Max Hall

An in-depth study by the Lawrence Berkeley National Laboratory has tried to identify why residential photovoltaic systems are so much cheaper in Germany than in the U.S.

A German solar installation.

Report's authors want to know why residential solar systems are so much cheaper in Germany than in the U.S.

A survey of installers in both countries has identified non-hardware 'soft costs' as the main factor responsible for a price difference of US$3.19/W between the two countries with the average German system costing $3/W compared to $6.19/W in the U.S., according to the study (actual costs are lower).

The report found several explanations for the disparity including the more densely concentrated populous in Germany – which reduces transport and supply chain costs – as well as the importance of word of mouth recommendations in a country where solar is culturally accepted.

The more wary nature of American consumers to a technology less widely adopted across The Pond means U.S. installers incur significantly higher customer acquisition costs.

The study found German installers have marketing and advertising costs of just $0.02/W installed, $0.01 for customer acquisition system design and $0.04 for 'other' customer acquisition costs, compared to marketing spend of $0.34; system design costs of $0.11; and other customer expenses of $0.24 in the U.S.

The size of the market enables German installers to benefit from learning cost reductions with 3.6 times more cumulative residential solar installations in Germany than in the U.S. – a figure which rises to a factor of 14 on a per capita basis.

Another of the report's findings was that regular downward adjustments of German solar incentives kept pressure on installers to keep prices down.

The results of the study will be presented in a webinar hosted by the U.S. Department of Energy's SunShot initiative on February 26, when the report's authors will call for U.S. policies to encourage a larger, less fragmented, solar market; a simple national solar incentive scheme, which would be regularly adjusted down; and lower interconnection, permitting and inspection costs.

To leave a comment you must first sign in or register your details

No comments

No comments have been submitted yet. Why not login or register and be the first?

Daily newsletter

Keep your finger firmly on the photovoltaic pulse: sign up for our daily newsletter

Magazine subscription

Choose between a digital and print subscription from pv magazine's online shop. A non-subscriber? Check out our sample articles.

Press releases

Want to publish your press releases for free? Simply log in or register, enter the information you want to appear and we'll publish it for you!