Non-Hardware ("Soft") Cost-Reduction Roadmap for Residential and Small Commercial Solar Photovoltaics, 2013-2020

Author:  Ardani, Kristen | Seif, Dan | Margolis, Robert | Morris, Jesse | Davidson, Carolyn | Truitt, Sarah | Torbet, Roy
Organization:  National Renewable Energy Laboratory
Report Date: 

The NREL report analyzes soft cost reduction trajectories, and compares those with the cost-reduction goals of the US Department of Energy’s SunShot Initiative. The report found that at both residential and commercial scales, the current trajectory case does not achieve US DOE SunShot Targets by 2020.

Key Take-Aways: 
  • Soft costs have become a major driver of U.S. photovoltaic system prices, and soft-cost reduction pathways must be developed to achieve the US Department of Energy SunShot Initiative’s PV price targets.
  • Customer acquisition and financing are the two most certain cost reduction pathways, with one primary challenge of enabling low cost of capital and other desirable homeowner financing in the residential sector.
  • Commercial solar PV has a higher likelihood of meeting SunShot Initiative goals in 2020, however this hinges on uncertainty of improved site assessment as well as innovative financing solutions for customers.
Key Facts: 
  • Soft costs represent 50% of costs for small residential systems 5-kW, and 44% of costs for small commercial systems sizing 250 kW and below.
  • Additional soft cost reductions beyond current trajectory reductions of $0.46 per Watt and 1.6% of weighted average cost of capital for residential systems, and $0.11/W and 1.1% of weighted average cost of capital for commercial PV systems will be required to meet SunShot Initiative goals.
  • The SunShot Initiative aims to reduce the soft costs of installed system prices to $0.06/W for residential and $0.44/W for commercial systems by 2020.