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COLUMN-Unsubsidised roof-top solar power grows competitive: Wynn

Feb 22 (Reuters) – Roof-top solar power is increasingly cost-competitive with retail power prices, with far-reaching implications for solar manufacturers, utilities and rival generation technologies.

Data gathered from U.S. installations by the Department of Energy suggests it is cheaper to generate electricity from roof-top solar panels than to purchase power from electric utilities, if applied to European retail power prices.

The economics of unsubsidised solar depends on the balance of self-generated solar power which is used at home, displacing more expensive purchased electricity, compared with the surplus which has to be exported back to the grid at much lower wholesale prices.

Retail power prices are higher than wholesale because of a mark-up by utilities, plus state levies and charges to cover the cost of grid transmission and renewable energy.

A report titled “The unsubsidised solar revolution” by UBS analysts last month estimated that households in southern Germany installing unsubsidised solar power could already make a net saving over the 20-year lifetime of the panels.

The analysts estimated a positive rate of return on investment of 2 percent already, rising to more than 6 percent by 2020.

The economics of solar will continue to improve as the installed cost continues to fall, retail power prices rise and residential battery storage becomes increasingly competitive, allowing households to displace more purchased electricity.


Prices of solar panels, or modules, have more than halved in the past three years, because of a global glut after manufacturing ramped up in China.

The remaining installation costs, chiefly labour, are often referred to as “balance of system” and vary according to the maturity of the supply chain.

The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) has developed an open project database detailing the combined full installation cost, excluding incentives, of projects based in the United States.

The NREL database can be found here:

Utilities, installers and the public volunteer the data, which NREL monitors to ensure quality.

“Data validation occurs on each record in the database on a regular basis. The database is continually analysed for corrupt records, bad or invalid data, and outliers such as an abnormal cost to watt ratio. Records found to contain questionable data are flagged and are dealt with on a case by case basis.”

As expected, full installed costs have fallen less precipitously than modules, given the labour component.

Median calculations are more meaningful than averages given the non-symmetrical data which includes a minority of utility-scale projects.

The NREL data show median, full installed costs fell 17 percent between 2010 and 2012, and are now around $4 (3 euros) per watt.

That is higher than some analyst estimates.
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