A roadmap to lower soft costs


As part of the U.S. Department of Energy‘s (DoE) war on solar ‘soft costs‘, its National Renewable Energy Laboratory (NREL) has released a roadmap to slashing non-hardware costs by 2020.

One of the aims of the DoE’s SunShot initiative is to further reduce the non-hardware costs that amounted to 50 per cent and 44 per cent of residential and small scale commercial solar projects, respectively, in 2010.

The DoE wants soft costs to come down to $0.65/W – of a total $1.50/W – for residential systems and $0.44/W, of $1.25/W, for small scale commercial projects, by 2020.

The snappily titled Non-Hardware (‘Soft’) Cost-Reduction Roadmap for Residential and Small Commercial Solar Photovoltaics, 2013–2020, from the NREL and sustainability promoter the Rocky Mountain Institute, uses the methodology used to reduce costs in the PV manufacturing and semiconductor industries to aim to drive down PV soft costs.

The report examines non-hardware costs in four areas: customer acquisition; permitting, inspection and interconnection; installation labor; and financing although, crucially, it leaves the question of overheads and profits to ‘future research.’

Tools and templates to reduce costs

For example, the report suggests the use of software tools to model whether the houses of potential customers are solar-ready and what sort of systems – which could be templated to reduce system design time and costs – are most suitable before the initial contact is made by telephone. Use of such tools would reduce the amount of time staff would have to spend drawing home information from customers, by telephone and on-site.

The report identifies residential system installation labor costs and permitting, inspection and interconnecting costs as the areas most problematic to guide towards the SunShot targets.

The authors point out while permitting and interconnection costs may be minimal on a household-by-household basis, they serve to deter developers entering certain markets, slowing down PV deployment and, thereby, cost reductions through mass deployment.

"Soft costs are the majority of costs for residential solar and a large minority for commercial PV projects," said Jon Creyts, program director at the Rocky Mountain Institute in a press release from the DoE on Wednesday, publicizing the report. "Aggressive soft-cost-reduction pathways must be developed to achieve the SunShot Initiative’s PV price targets."