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Box 6.1: WILL THE FUTURE OF PV INSTALLED COST REDUCTIONS BE DETERMINED BY BOS COSTS? Balance of system costs in both Germany and the United States have come down with increased PV deployment. However, at 1 GW, BoS costs in the United States have strongly diverged from Germany (Figure 6.4). While BoS costs in Germany have followed a fairly consistent downward trend, they have remained at high levels in the United States. The result has been a dramatic difference in BoS costs and hence in total installed costs in 2011. Further investigation is needed to identify why this is the case, but initial analysis suggests that it is partly structural, partly policy design but also due to reasons that are not well understood (such as labour hours for installation in the United States being three to ten times higher than in Germany for similar sized systems) (Seel, et al., 2012). 10 9 8 7 6 5 4 3 2 1 0 100 1000 10000 Cumulative national PV capacity installed (MW) Germany United States FIGURE 6.4: RESIDENTIAL SOLAR PV SYSTEM BOS COSTS IN GERMANY AND THE UNITED STATES, 2001 TO 2011 SOURCE: SEEL ET AL., 2012. 7 6 5 4 3 2 1 0 United States Soft BoS + profit Other hardware Germany Inverter Module FIGURE 6.5: RESIDENTIAL SOLAR PV MODULE AND BOS COSTS IN GERMANY AND THE UNITED STATES, 2011 SOURCE: SEEL ET AL., 2012. Figure 6.5 looks at a sample of residential systems in the United States (over 6 000 systems) and Germany (over 2 000 systems). For these projects, the total installed costs for the United States were more than twice as high as in Germany. The total soft costs in Germany were just 19% of those in the United States. Analysis of these differences is just beginning, but further research is needed to examine the reasons for these differences since understanding them will be critical to identifying how to drive cost reductions in solar PV in markets that have, to date, experienced higher system costs than in more competitive markets. Renewable Power Generation Costs in 2012: An Overview 53 2011 USD/W 2011 USD/WPDF Image | International Renewable Energy Agency
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