New Studies Show Soft Costs Continue to Hamper Solar

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By Daniel Cusick, E&E reporter

From Climate Wire:

As solar energy equipment becomes more affordable than ever, prompting millions of home and business owners to consider generating their own electricity using solar arrays, the overall cost burden of such systems is shifting decidedly toward "soft costs." These include financing, taxes, corporate fees, installation and other nonhardware charges, according to the Energy Department.

In two reports issued yesterday, the National Renewable Energy Laboratory stressed that soft costs now account for well over half of all spending on U.S. solar projects, with the greatest proportion of soft costs coming for residential systems, followed by small commercial systems and large commercial installations...

Solar industry representatives have credited the technology's rapid growth in part to the dramatic drop in hardware costs. Solar modules, for example, fell by $2.60 per watt between 2008 and 2012. Nonmodule costs, including for inverters, mounting hardware, permitting and fees, have also fallen, but more modestly, according to the Berkeley lab's latest "Tracking the Sun" report.

The same study found that "market-building policies that target non-module or 'soft' costs represent a significant opportunity for continued price reduction."

Ken Johnson, a spokesman for the Solar Energy Industries Association, said in an email that finding new ways to drive down solar soft costs continues to be a top priority for U.S. manufacturers and installers.

"Even though the price of a solar electric system has dropped by more than 70 percent since 2010, we can make solar even more affordable for Americans in the future by cutting red tape and reducing embedded soft costs, such as permitting and installation," Johnson said. "We will continue to work closely with DOE's SunShot Initiative, as well as with state regulators all across the nation, to come up with common-sense, cost-effective solutions."


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