Residential solar is now inexpensive, but can it get any cheaper? Alternatives to $0.05 per kWh

The rate of solar panels has decreased dramatically. However, the Department of Energy (DOE) intends to lower those expenses even more, particularly for residential houses. After all, studies have indicated that if solar panels were installed on every inch of usable rooftop in the United States, the panels could meet almost 40% of the country’s energy needs. The Department of Energy’s current target is for home solar to cost $5 per kilowatt-hour by 2030.

Researchers from the National Renewable Energy Laboratory (NREL) laid out possible paths to that objective in a recent report. The intractable “soft expenses” of solar installation appear to be the largest impediments to cost reduction. Supply chain, labour, and sales and marketing costs are examples of soft costs that aren’t tied to the physical fabrication of solar cells in a plant.
“Because the 2030 objective is unlikely to be met under current trends, we investigate two key market sectors that indicate considerable cost reductions and market growth: installing PV during roof replacement and installing PV as part of the new home construction process,” according to NREL.

Within the roof replacement and new house construction markets, the research set out two “visionary” (as well as two “less aggressive”) approaches to attaining such cost reductions. What’s the result? NREL found the only method to reach the “visionary” cost reductions was to assume that solar installers would begin selling low-cost solar-integrated roof tiles before 2030, “which could dramatically lower supply chain, installation labour, and permitting costs,” to the report.

Is it possible to combine solar with roofing? It sounds like something you’ve heard before.

If it seems familiar, it’s because Tesla has spent the last year boasting that combining solar cells and roof-top tiles will make sense for consumers replacing their roofs. When Elon Musk, the CEO of Tesla, first introduced the solar roof, he stated that the goal was to create a product that was “less than the installed cost of a roof plus power.”

Musk then noted that if your roof needs to be replaced anyway, the cost-benefit analysis for many households could make sense. In May, Tesla and SolarCity executives announced that the solar roof solution would be “the overall” less expensive than building a new tile roof (though the standard asphalt roof without solar power is still cheaper than any solar-equipped roof).

Still, Ars ran the numbers and discovered that in areas where energy costs are low, and net metering is outlawed, a solar roof isn’t as cost-effective as installing ordinary panels on a new roof. And, in the absence of net metering or state tax rebates, the system’s cost is nearly always prohibitively high.

So why is NREL now recommending that one of the greatest ways to reduce the cost of solar is to combine roofing with solar panels, even though a Tesla solar roof is more expensive in many regions than simply replacing the roof and adding solar panels?

The market for solar roof-type items is still in its infancy. However, it’s one of the few instances where some ingenuity might help lower solar costs further. “Achieving low-cost residential PV with an integrated product is extremely difficult and will almost certainly necessitate large research and development investments,” according to NREL. “Because the more integrated product is required to create a similar amount of power,” NREL stated, “the poorer efficiency of present integrated goods also makes these products more expensive than standard PV modules.” “If integrated goods achieve considerable market share through 2030, a robust design innovation that tackles these concerns will likely be important.”

Still, as we improve our ability to manufacture roofing and solar-integrated goods, costs may decrease. (This isn’t a wild assumption: household solar panel costs have dropped from 52 cents per kWh in 2010 to 15.1 cents per kWh in 2017.) The Colorado-based lab notes that CertainTeed’s solar shingle product and GAF’s solar panels are examples of goods that bridge the gap between roof and solar panel installation.

When a new roof is built, and then solar is added on top of it, the costs of marketing, permitting, shipping, and installation are incurred twice. If corporations develop supply networks that incur such expenses only once rather than twice, we may save a lot of money in the long term.

Economies of scale will doing a role in any path to $5 per kilowatt. According to NREL, 3.3 million new roofs will be put on existing and new residences between now and 2030, resulting in a “residential PV technical potential of around 30 gigawatts (GW) per year.”

Less aggressive pathways

Solar, on the other hand, has had a difficult year. According to analysts, the Trump administration recently imposed taxes on imported solar panels, which could raise the cost of residential solar panels by 3%. (cost increases could vary depending on if panels are imported at the graduated tariff rate or made in the US).

NREL also mapped out two “less-aggressive” futures given the market’s political instability. Companies cannot combine their roof and PV goods and instead ship solar panels separately from the top. As the solar sector develops “a developed supply chain, distribution channels, and support services geared at small, medium, and big companies,” the cost of solar drops in certain cases. As the industry matures, “PV installers will be able to acquire modules at or near spot market pricing in 2030.”

The “visionary” and “less-aggressive” routes proposed by NREL are not implausible. IN SEPTEMBER, the US Department of Energy declared that solar had reached a cost milestone for utility-grade solar panels—roughly $1 per watt, $6 per kilowatt-hour—three years ahead of the 2020 deadline.

Because each project is unique, cost reduction for residential solar can be more difficult. Individual projects are difficult to discover economies of scale unless panels are purchased in bulk for the new building. As a result, according to NREL, future cost reductions will necessitate changes in how solar is offered. “The less ambitious approaches might proceed roughly 70% – 80%” toward the goal of $5/kWh by 2030. However, replacing old roofs with solar-integrated roofs and installing solar-integrated roofs on newly constructed dwellings bring the DOE closer to its target cost. “As a result, our study implies that moving toward a completely integrated roofing product and a fully integrated business model could be key to meeting the… 2030 residential PV objective,” says the report.

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