Report | 2013

Reducing Solar PV Soft Cost: Focus on Installation Labor

By Jesse MorrisKoben Calhoun

Distributed solar energy is a key enabler of the affordable, resilient, secure, and low-carbon electricity future Rocky Mountain Institute (RMI) advocates in Reinventing Fire. However, in order for distributed solar to play its role, a number of changes must transpire. The most pressing of these changes is for solar costs to come down to U.S. Department of Energy SunShot levels that enable deployment of cost-effective solar systems across the U.S. Between 2008 and 2012, the price of sub-10-kilowatt rooftop systems decreased 37%. However, over 80% of the cost decline is attributable to decreasing solar PV module costs. Of the average $4.93/W cost of a residential rooftop solar system, over 60% of the total is now attributable to “soft costs,” including those associated with installation labor; permitting, inspection, and interconnection (PII); customer acquisition; financing costs; and installer/integrator margin. With module and inverter costs predicted to stabilize at relatively low levels between now and 2020, these soft costs must come down in order for solar energy to be cost competitive across the U.S.