The case for rethinking utility-scale PV economics

A frequently cited analysis by Wood Mackenzie concludes that single-axis trackers (SAT) represent the most economical system configuration for many utility-scale photovoltaic projects. This assessment is based primarily on the higher specific energy yield achieved by tracking the sun. However, in light of today’s cost structures, market dynamics, and system constraints, a more differentiated evaluation appears warranted.

From module yield to whole-system economics

For many years, the economic rationale was straightforward: modules accounted for the largest share of total system costs. It therefore made financial sense to maximize the number of kilowatt-hours generated by each installed module. The 15% to 25% yield uplift typically attributed to trackers justified additional steel, mechanical components, wider row spacing, and more complex installation and maintenance.

Today, the situation has changed significantly. PV modules are still available at historically low prices, while steel, civil works, logistics, labor, and financing costs have gained relative importance. As a result, the key optimization metric is shifting away from “yield per module” toward the economics of the overall system – in other words, the efficiency of total capital deployed, land-use efficiency, the risk profile, and the practically usable energy yield (and revenue) per installed megawatt.

Land-use efficiency as a strategic metric

Fixed-tilt east-west systems with low tilt angles achieve a lower specific yield per module than trackers. However, this difference can often be offset economically by a moderate increase in installed DC capacity. At today’s module prices, DC-side oversizing is no longer a fundamental economic barrier.

More importantly, low-tilt east-west configurations enable very high installation densities. Minimal row-to-row shading allows significantly more capacity to be installed per hectare. Lightweight, high-density systems illustrate this potential, with achievable installation densities of approximately 2.1 MWp per hectare. In markets where land availability and lease costs are becoming increasingly decisive, optimizing yield per hectare is just as relevant as optimizing yield per module.

Material use, construction time, and ease of installation

A fundamental difference between tracker-based and fixed systems lies in their mechanical complexity. Trackers require moving components, drive mechanisms, bearings, and control systems. Fixed east-west arrays do not require these elements, thereby reducing mechanical complexity and potential points of failure.

Modern lightweight designs demonstrate that material use can be reduced substantially. According to manufacturer information, some systems require approximately 70% less steel than conventional mounting structures. The total installation effort for experienced installers is stated at around 400 to 500 labor-hours per MWp. Because installation can be carried out without heavy machinery and with standard tools, logistics requirements are reduced and construction is accelerated. This helps address the current bottleneck and improves time to grid.

In today’s market environment, the availability of skilled labor is a critical constraint. Highly specialized installation crews are becoming increasingly scarce or are tied up in maintenance work. Standardized, mechanically simple systems allow substantial parts of the installation to be performed by trained crews without compromising quality. This improves scalability, increases schedule certainty, and reduces execution risk.

Shorter construction periods also have a direct impact on project economics: they accelerate grid connection, reduce the period for which capital is tied up, and lower interest costs during construction. These factors are often not given sufficient weight in yield-focused comparisons.

Lifecycle perspective and system risk

Tracking systems inherently increase technical complexity through moving parts and electronic control units. Although modern trackers are mature technologies, mechanical systems inevitably entail additional maintenance requirements, dependencies on spare parts, and long-term operational variables.

In addition, modules in tracking systems remain aligned with optimal irradiance for longer and therefore operate more frequently at peak output and elevated temperatures. Even minor differences in annual degradation rates can become economically significant over project lifetimes of 25 years or more.

Fixed systems operate statically, without dynamic mechanical loads or tracking movements. This design simplicity can contribute to long-term operational stability and lower systemic risk.

Quantifying the economic shift

The change in economic logic can be quantified. Modules now account for a significantly smaller share of total project capital expenditures than in previous years, while steel structures, civil works, and construction costs have gained relative importance. If tracking systems deliver a 15% to 20% higher specific module yield, high-density fixed east-west systems can at the same time reduce mounting-structure costs by well over 20% and shorten construction time.

In addition, a 10% to 20% increase in installed DC capacity can often be implemented with a flatter generation profile without significant clipping losses. In such cases, the economic offset is achieved not through additional mechanical complexity, but through comparatively inexpensive additional module capacity. Over project horizons of 20 to 30 years, even moderate differences in material use, construction time, and the duration of capital commitment can have a greater impact on the levelized cost of electricity than a few percentage points of additional module yield.

Reassessment rather than rejection

Trackers remain a sensible option under certain site conditions and irradiance profiles. Their economic superiority should not be treated as a universal rule, but should always be evaluated in the context of the specific project. The key question is not simply whether trackers achieve a higher yield per module – which is true in many cases – but whether this additional yield actually results in a lower levelized cost of electricity (LCOE) under the relevant local conditions.

Trackers are particularly compelling where the additional specific module yield is difficult to offset economically with further DC capacity. This may be the case when modules account for a very high share of total project costs, as they do in the United States, for example, or when latitude and the irradiance profile create a particularly large yield differential between tracking systems and high-density, low-tilt fixed east-west systems. Under such conditions, it may be more economical to optimize the yield of each individual module through tracking than to offset the lower specific yield with additional low-cost module capacity.

In many markets, however, the economic equation may look different. Projects are often determined not only by yield per module, but also by land availability, grid-connection capacity, construction and labor costs, permitting pressure, construction schedules, and long-term operational risks. Under these conditions, a high-density east-west configuration can become economically attractive because it can partially offset the disadvantage of a lower specific module yield through higher installed DC capacity per hectare, lower mechanical complexity, simpler installation, and a more favorable overall cost structure.

System selection should therefore not be based on the blanket assumption that one technology is inherently superior. A project-specific LCOE assessment is more appropriate, taking into account local irradiance conditions, land constraints, DC/AC sizing, construction costs, installation effort, grid-connection conditions, and long-term operation and maintenance risks.

Put simply, trackers are particularly attractive when modules are expensive or when site conditions make the additional yield per module genuinely necessary. In many markets, however, the equation is more complex: land use, construction costs, grid constraints, and speed of deployment may be more decisive than maximizing the yield of every individual module.

Author: Henner Jahnke

Henner Jahnke is Chief Sales Officer (CSO) at Bavaria-based Jurchen Technology GmbH, supplier and engineering services provider of PEG, a distinctive and highly efficient ground-mounted fixed-tilt east-west mounting system. At Jurchen, he is responsible for global sales activities and strategic direction and is also a member of the executive management team.