U.S. Utility-Scale PV Meets Subsidy-Free Price Target Three Years Early

U.S. utility-scale photovoltaic (PV) systems have achieved the targets set by the Department of Energy’s  (DOE’s) SunShot Initiative three years early, the DOE announced on September 12 at the Solar Power International (SPI) conference in Las Vegas. The average cost of utility-scale solar is now 6 cents/kWh.

The original 2020 goal of the SunShot Initiative was for solar to reach 6 cents/kWh without subsidies. “Commercial PV and residential PV were later separated to have their own goals of costs below retail rates, estimated to be 7 cents/kWh and 9 cents/kWh respectively, or system installed costs of $1.25/W and $1.50/W respectively,” a report released by the National Renewable Energy Laboratory explains.

In addition to reporting that utility-scale PV systems have reached the SunShot goal early, the DOE reported that the residential and commercial PV sectors are also moving toward their goals quickly. “U.S. residential and commercial PV systems are 86% and 89% toward achieving SunShot’s 2020 electricity price targets,” the report says.

According to the DOE, the majority of the price reduction in PV systems is due to declining hardware costs. “Hardware costs—and module prices in particular—declined substantially in Q1 2017 owing to an imbalance in global module supply and demand. This has increased the importance of non-hardware, or ‘soft,’ costs,” the report says.

“Soft” costs include things like labor, permitting, interconnection, customer acquisition, financing, and grid integration. Interestingly, the report notes that while it is harder to decrease “soft” costs, reducing hardware costs can lead to at least small reductions in “soft” costs. “For instance, module efficiency improvements have reduced the number of modules required to construct a system of a given size, thus reducing hardware costs. This trend has also reduced soft costs from direct labor and related installation overhead,” the report says.

In addition to celebrating the achievements of the SunShot Initiative, the DOE announced that the program would be expanded and adjusted to fit the priorities of the current administration.

“With the impressive decline in solar prices, it is time to address additional emerging challenges,” Daniel Simmons, acting assistant secretary for the office of Energy Efficiency and Renewable Energy said. “As we look to the future, DOE will focus new solar R&D on the Secretary’s priorities, which include strengthening the reliability and resilience of the electric grid while integrating solar energy.”

The DOE will continue to research driving down costs, but new funding programs under the SunShot Initiative will have a renewed focus on early-stage research into the grid.

Speaking at the end of a day-long showcase of SunShot start-ups at SPI, SunShot Director Charlie Gay asked attendees to offer comments on the program. “One of the pieces of feedback that I would very much value from everybody here, and from your friends as well, is what do you see that we can build on here, what processes, as we continue to fund early stage R&D work? It’s ever more important for us to be able to see those things become commercialized, to have new businesses respond, to be able to continue to grow the economy around these technologies,” he said.

“I look forward to continuing the drumbeat as we increase the scale of what we do.”

 

Abby L. Harvey is a POWER reporter.