RenewEconomy - Christian Roselund (PV Magazine)
Only ten days before the U.S. solar industry finds out whether or not
it will have to deal with trade remedies imposed by the Trump
Administration, the U.S. Department of Energy’s National Renewable
Energy Laboratories (NREL) put out a new report showing new low costs
for solar in the first quarter of 2017.
U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017 shows
PV system prices falling roughly 30 per cent in only one year for
utility-scale solar, to an average price of $1.03 per watt-DC for
fixed-tilt systems and $1.11 per watt for systems with tracking.
This is a dramatic slide in prices even for an industry that has been
greatly successful in reducing prices, and appears to come mostly from
the collapse in PV module prices over the same period.
This in turn is largely due to a mismatch between supply and demand
in China, which has caused significant pain for module makers, and it is
not coincidence that there is currently a case before the U.S.
government on potential trade protection for U.S. solar cell and module
makers.
NREL has estimated that this translates to levelized costs of
electricity from $50-66 per megawatt-hour (MWh) for fixed tilt systems
and $44-$61/MWh for tracking systems, excluding the effect of the U.S.
federal Investment Tax Credit (ITC).
These prices show that utility-scale solar has already beaten the
2020 targets set by the U.S. Department of Energy’s (DOE) SunShot
Initiative, which has led the new head of the DOE’s Office of Energy
Efficiency and Renewable Energy (EERE) to shift the focus of SunShot
away from cost reduction and towards integration of high levels of
renewable energy (please see our interview with EERE head Daniel Simmons here).
As the bulk of cost reductions were driven by the module price
collapse, prices in other sectors have not fallen as quickly. NREL found
that prices for commercial and industrial (C&I) systems fell a
still-impressive 15% over the last year to an average of $1.85 per
watt-DC, while prices for residential systems fell only 6% to $2.80 per
watt.
This means LCOE of $92-120/MWh for C&I systems, and $129-167/MWh
for residential systems. This is still well below SunShot goals for
unsubsidized solar and given the current rate of price declines
residential solar may not meet its SunShot target in 2020.
However, when the effect of the ITC is calculated, such costs fall
significantly, putting the average cost of residential PV below
$100/MWh.
NREL notes that this points to the difficulty in reducing non-hardware
“soft” costs, which have increased to two-thirds of the cost of
residential systems and 59% of C&I systems.
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