1. The Potential Impact of
PV Soft Costs
George Washington University
4th Annual Solar Summit
Robert Margolis
Kristen Ardani
April 12, 2012
NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

2. Outline
• Why we should care about non-
hardware “soft” costs for PV systems.
• Benchmarking non-hardware costs in
the U.S.
• With rapid decline in hardware costs,
reducing soft-cost is becoming
increasingly important.
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3. There is More to a System than Hardware
5) Monitor
performance
$$$
4) Inspect and
interconnect
3) Permit and
install
-
2) Finance
your system
1) Choose • In the U.S., the process of selecting an installer
installer
through commissioning and operating a PV system
can add significant time and cost to project
completion.
• Inefficient supply chains, O&M, and delays can also
increase cost.
 Need for streamlined processes.
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4. Ex: Permitting, Inspection, Interconnection (PII)
The Problem : Inconsistent PII requirements,
delays, and lengthy wait times are costly.
• 18,000+ local jurisdictions with different PV
=
permitting requirements.
• 5,000+ utilities with interconnection standards
and net metering programs. ≠
Permitting fees vary widely across the U.S. ex) for 5kW system:
≠
• Typical permit fees are $200-$450/install (as high as $2000/install).
 Currently in the U.S. PII typically range from $0.15/W to $0.25/W,
and can be as high as $0.5/W depending on jurisdiction.
Uniform processes
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5. NREL Recently Benchmarked “Soft” Costs
• Benchmarked 2010 non-hardware balance of system (soft-
BoS) costs and integrated into bottom up PV system price
model.
• Distributed an online data collection tool to residential and
commercial PV installers.
• Data collection focused on annual/per install labor hours expended on
specific tasks to capture time and cost of PV business process.
• Data has been processed to estimate the cost/W for:
• Installation
• Permitting, Inspection, Interconnection
• Customer acquisition
• Financing
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6. 2011 Residential Total Installed PV System Price
$8.00 Financing
$7.00 Marketing and
$6.35 Advertising
$6.00 System Design
NREL Data
Collection
$5.00 Customer Acquisition
$U.S./Wp DC
$4.00 Permitting, Inspection,
Interconnection (PII)
$3.00 Installation Labor
$2.00
Profit on Materials
(Materials Profit)
$1.00
Profit on Installation
Labor (Labor Profit)
$0.00
Sales Tax (5%)
Module, Inverter,
Installation Materials
(Hardware)
• Total non-hardware BOS (including profit) $3.35/W; approx 54% of total price
• NREL data collection non-hardware BOS $1.78/W; approx 53% of total non-hardware BOS
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7. 2011 Residential Non-Hardware Breakdown
Installation Labor
• Sample main point Permitting, Inspection,
Interconnection Labor
2%
9%
o Sample sub-bullet Permit fee ($431)
1%
– Sample sub-bullet Customer Acquisition
and System Design
 Sample sub-bullet 11%
Non-
Hardware Profit on Labor
Hardware 5%
46%
54%
$3/W
$3.35/W
Profit on Materials
15%
Sales Tax
5%
Financing
4%
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8. Soft Costs: U.S. vs. Germany
Residential Installed PV System Prices in the
U.S. and Germany, 2011
• There is ~$2/W difference in
installed system price
between the U.S. and
Germany.
• Minimal and streamlined
processes in Germany.
• More developed supply-
Soft
Costs chains, distribution channels,
Soft
and competition in Germany.
Costs • Quotes for PV systems in the
U.S. continued to decline by
~$1.30/W between Q4 2010
and Q4 2011, mostly due to
module cost declines.
Source: NREL and LBNL
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