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U.S. Lags Behind Australia and Germany in Solar Photovoltaic Costs

Rocky Mountain Institute (RMI) recently released a report with Georgia Tech Research Institute (GTRI) entitled “Lessons from Australia: Reducing Solar PV Costs Through Installation Labor Efficiency,” which identifies on-the-ground opportunities for the U.S. market to reduce solar photovoltaic (PV) system costs and accelerate residential and commercial customer adoption. As a result of not implementing these best practices, the report concludes the U.S. continues to lag behind global PV leaders Germany and Australia in prices for residential installations.
 
With solar module costs relatively the same everywhere, total soft costs—including customer acquisition, installation labor, permitting, inspection and interconnection—now comprise approximately 70% of the total installed price for a U.S. residential PV system, making soft costs a prime opportunity for drastic cost reductions. After examining Germany’s installation labor practices and releasing the results in a December 2013 study, RMI and GTRI traveled to Australia this past spring to analyze the varying PV installation processes of that country. Each provided a unique opportunity to draw a comparison between installation costs and methods; when combined with the U.S., the three countries comprise more than 39% of total global distributed PV generation.
 
In particular, Australia has emerged as a dominant player in the world residential solar market, with more than 10% of households possessing a rooftop solar system with costs of $2.56/W, closely rivaling Germany’s $2.21/W (compared with $4.93/W in the U.S.). Without using advanced technologies or processes, Australian installers can install solar systems in less than two-thirds the time per kW than U.S. installers.
 
“RMI’s work in Australia diversifies our understanding of how the cost of installed solar PV systems can be competitively reduced,” said Karen Crofton, a principal at RMI. “The observations gleaned from Australia will help U.S. solar providers streamline their installation processes—starting today. If it can be done in Australia and Germany, there is no reason it cannot be done in the U.S.”
 
Using time-and-motion methodologies, several cost-reduction opportunities were identified during observations in Australia: 
Pre-installation and base-installation process optimization
Integrated racking and mounting solutions
PV meter integration
 
“Lessons learned from these leading markets in Germany and Australia are formative for advanced residential and commercial PV racking technologies currently under development,” said GTRI Senior Research Engineer Joseph Goodman. “Ultimately, we are looking to not only leapfrog best-in-class U.S. systems, but also surmount these global benchmarks—helping us reach the Department of Energy SunShot cost reduction targets.”
 
For more information, visit www.rmi.org.

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