by Brianna Crandall — February 7, 2018 — The Rocky Mountain Institute and 35 solar energy industry leaders recently committed to develop an ultra-low-cost solar product able to operate in a variety of environments at fully installed costs as low as $0.50/Wp (dollars in watt peak).
Participants at the RMI-hosted event, representing at least 15 gigawatts of solar capacity — equivalent to the capacity of 25 average-sized coal plants — identified an opportunity to reduce costs by $0.20/Wp in 2018 alone. Reducing costs at this scale would mitigate the effect of newly applied trade restrictions on solar components, keeping the solar energy industry on a maintained cost-reduction pathway, says the Institute.
The 30% tariffs on imported solar cells and panels, which were called for by some in the solar industry, were put in place with the stated intent to help US manufacturers, but may have unintentional negative consequences, according to others in the industry. The Solar Energy Industries Association (SEIA) and its members expressed disappointment in President Trump’s decision to impose tariffs, saying, “The decision effectively will cause the loss of roughly 23,000 American jobs this year, including many in manufacturing, and it will result in the delay or cancellation of billions of dollars in solar investments.”
The four-day RMI workshop saw over 35 leading companies applying best practices in system design, supply chain, business model, finance, and market structures to the debate on how to keep US solar cost-effective. Members identified a pathway to create a modular, preengineered and preassembled solar product of standardized design targeting a fully installed cost of 50¢/W and lower costs by as much as $0.20/Wp in 2018 alone, corresponding to about an 8% reduction in the average national price of residential electricity.
In the last five years, the solar industry has realized year-over-year growth rates of 21%, attracted more than $100 billion in investment, and now employs more than 260,000 people in the US as one of its fastest-growing energy sectors. Yet for solar to reach its full potential as a foundational, carbon-free energy source in the US and around the world, it must compete without subsidy in wholesale markets, says RMI.
Thomas Koch Blank, principal, Rocky Mountain Institute, stated:
In addition to the benefit of a step-change in cost reduction, a more standard offering would be particularly effective in opening up new market segments of smaller installations, where the cost of project-by-project customization has diminishing returns.
Community-scale solar (CSS), also referred to as distribution-scale solar — installations of 1–10 MWp, cited close to load and connected to the distribution grid rather than the transmission grid — is emerging as a “sweet spot” for the build-out of solar energy development. In addition to low-cost electricity, CSS provides distributed benefits such as avoided transmission costs, reduced peak energy charges, potentially avoided capital expenditure for grid upgrades, ancillary services, and increased resilience.
Jules Kortenhorst, CEO, Rocky Mountain Institute, added:
By taking a whole-systems approach that leverages standardization to enable preassembly and preengineering, the roadmap to delivering a low-cost, easy-to-understand product offering is clear. Furthermore, regional preassembly of solar equipment and components, which get trucked to local sites for efficient installation, creates new jobs and community investment.
Even as policy change results in immediate-term headwinds, all signs point to clean, abundant solar power increasingly becoming the energy source of choice for individuals, communities, and businesses across the globe, concluded RMI. The group asserts it is in all Americans’ interest to invest in the successful future of this domestic high-growth industry with significant potential to raise overall productivity, drive economic growth and create jobs.
The workshop participants said they are individually and collectively committed to accelerating the delivery of solar energy’s many benefits to the American people. For a list of workshop participants, see the RMI announcement.