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Clean Energy Ministerial 4 (CEM4)

17–18 April 2013, New Delhi, India

Solar PV: Reducing Soft Costs

Overview

New and innovative business models and tools are being developed to drive significant improvements in market conditions for solar photovoltaic (PV) technology, but barriers to increased deployment remain.  Large-scale investments in PV research over the last few decades, sponsored by both governments and private enterprise, have resulted in a sharp decline in the cost of hardware for PV systems.  However the non-hardware, or “soft costs” associated with installation, customer acquisition, and interconnection remain high and now make up a substantial fraction of the total installed cost of PV systems.

To accelerate the adoption of PV (utility-scale and residential), it is important to reduce these soft costs. Governments can play a key role in encouraging cheaper and easier ways of installing PV systems by promoting business and tool innovation around these areas:

Sample Areas to Reduce Solar Installation Costs

Non-Hardware (soft costs)

Customer Acquisition

Financing and Contracting

  • Marketing / advertising
  • Sales calls / site visit
  • Bid preparation/phantom bids
  • Follow up
  • Signing contact/collecting payment
  • Financing (capital expenses)
  • Insurance
  • Legal agreements (RFPs, PPAs, etc.)
  • Incentive application processing

Permitting, Inspection, and Interconnection

Installation and Performance

  • Wait time for permits, inspection, and interconnection
  • Permitting expenses
  • Utility interconnection expenses
  • Idle crew and trucks
  • Service (O&M)
  • Installation labor
  • Optimal system design













In addition to the factors above, there is a need for installers to keep pace with the continuous introduction of new technologies by certifying performance to ensure bankability and decrease uncertainty around technical risk. Commercialization is also inhibited by a dearth of available information on policies and incentives worldwide to incentivize PV deployment; consumers and policymakers may lack an understanding of the benefits of solar PV in the residential sector, particularly the relatively low cost over the lifetime of a system. Participants in this roundtable will discuss policy and business innovations that aim to address these challenges.

View the the pre-read presentation

Discussion Topics

  • Where is there significant opportunity to reduce installation and other soft costs?
  • What are the key market barriers to broader solar PV installations?  In the residential sector?  In the business and industrial sector? What are viable business models and existing examples, including web-based tools, to increase deployment?
  • How can governments promote innovative businesses and tools to help address these barriers?
  • What role can the Solar PV industry and NGOs play in providing better information on the benefits of solar PV as well as policies and incentives?