NREL

Alan C. Goodrich

Michael Woodhouse, PhD

Ted James

SEGIS-ADEPT Power 

Electronics in Photovoltaic 

Systems Workshop

Arlington, Virginia

February 8, 2011

NREL/PR-6A20-50955

Solar PV Manufacturing Cost Model Group:

Installed Solar PV System Prices

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.
Analysis Disclaimer

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These manufacturing cost model results (Data) are provided by the National Renewable Energy Laboratory 

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2
The Value of Module Efficiency

• $0.05–$0.10/WDC /1% (absolute)

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Source: NREL internal cost model
Installation Cost Model Methodology

• First-hand data from industry stakeholders

o Installers

o System developers

o Utilities

o Module and other component manufacturers

...Supplemented with public data sources

o For example, Photon International module and inverter price surveys; RS Means labor 

rates and contractor overhead rates

• External review of results with stakeholders and industry 

analysts

o Review critical assumptions

o Compare results to completed and quoted projects, as well as public databases (e.g., 

CSI)

• Conduct sensitivity analyses (identify key cost drivers)

o Continuously review and revise

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Actual 2009–2010 project 

costs (under NDA)

• (40+) residential &

commercial rooftop

• 8 utility-scale projects

(all > 5 MW)
NREL PV System Price Model: Utility Scale

Modules

Inverters 

• Prefabricated storage shed

Installation Materials

• Racking and ground mounts (tracker)

• DC wiring, combiner boxes, disconnect, 

conduit, and connectors

• AC wiring, meter, monitoring, disconnect, 

conduit, and connectors

Land and Site Preparation

• Land purchase or lease

• Leveling, plant removal, sediment control, 

roads, fencing, and surface treatment

Installer Markup

• Inventory and contingency costs

Labor Content and Rates

• Labor type (electrical and hardware)

• Installation time per component

• Overhead

• Installer profit

Indirect Capital Costs

• Environmental permitting

• Grid interconnect (materials and labor)

• Sales tax

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Economies of Scale

• Trend towards larger system sizes and building block system designs

• Utility-scale benefits nearly fully realized at 20 MWDC

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NREL System Price Model: Q4 2010 Results

• Markup on all materials (module, inverter, and BoS) included in “Installer Overhead & Profit”

Residential $0.89/WDC, commercial $0.55/WDC, and utility (fixed-axis) $0.31/WDC

• Reflects inventory costs (interest during construction) and contingency

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Installation Materials

Utility-scale Hardware Costs

Mounting hardware

• Fixed-axis: $0.20/WDC

• 1-axis: $0.45/WDC

1.2 MW inverter-assembly

• (2) Inverters, preassembled

• Single 34.5 kV MV transformer

(~ 6,700 kg)

• Storage shed (pre-fabricated)

• Roads not needed for installation 

(80 hrs)

Utility DC and AC wiring costs

• Wiring: $0.15–$0.19/WDC

• Conduit and connectors: $0.05–

$0.07/WDC

Markup on materials

• Inventory costs, project delays, and 

contingency

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Source: NREL internal cost model
Installation Labor

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Installation Labor Costs

Skilled electrical labor

• Role in utility-scale installations?

• Opportunities to integrate electrical 

assembly at factory?

Overhead rates > 3x national 

average for electrical contractors

• Reflects cost of permitting process?

• Design efforts?

• Customer acquisition costs?

• NREL data from inexperienced 

installers?

Source: NREL internal cost model
Indirect Installation Costs

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Indirect Project Costs

Environmental permitting

• $1 MM (CA SEQA)

Grid interconnect

• Utility scale: Substation materials 

and labor ($1.5–$3.0 MM, 69–230 

kV)

• Rooftop “commissioning” costs?

Land acquisition

• $500–$10,000/acre

o As high as $105K/acre (2008)

• 5–8 acres/MW 

Site preparation

• $5K–$25K/acre

• Leveling, hydrology, plant removal, 

roads, and sediment control

Source: NREL internal cost model
Summary and Discussion

Hardware and labor costs account for > 1⁄3 of system price

• Integrate electrical components and wiring at factories? 

Save on-site labor and hardware costs?

• Limited benefits associated with lightweight inverters?

Roads and concrete pad still necessary: Heavy MV transformers

• Cost benefits of higher DC voltages?

1,000 VDC to 1,500 VDC → 1.2 MWDC to 2.4 MWDC inverter blocks

Indirect project costs: 5%–11% of system prices

• Site preparation ~ 5x land acquisition cost

System and component designs to reduce preparation requirements?

• Commissioning costs?

• Permitting delays, opportunity to fast track standard system 

designs?

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Acknowledgments 

Robert Margolis

David Feldman

Kristen Ardani

John Bartlett

Many industrial collaborators for their willingness to share data 

and to provide invaluable external review.

Colleagues at NREL who have contributed through 

both formal and informal discussions.

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APPENDIX

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Utility-scale PV: Uncertainty Analysis (1)

Regional cost differences

• Labor rates

• Installer productivity

• Permitting and delays

• Land costs

Technology selection

• Module efficiency

• Configuration

Economies of scale

• Project size (indirect costs)

• Installer purchasing power

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Utility-scale PV: Uncertainty Analysis (2)

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Source: NREL internal cost model