Why are Residential PV Prices in Germany So Much Lower Than in the United States? A Scoping Analysis

The wide disparity between the installed price of  residential PV in Germany and the United States has been well documented and  can be attributed primarily to differences in "soft" costs (or business process  costs). In order to better characterize the nature of these differences, LBNL  fielded a survey of German PV installers to collect granular data on the number  of labor hours and labor costs associated with various soft cost elements for  residential PV in Germany. The survey instrument was adapted from one that NREL  previously fielded to U.S. installers, thereby providing a source of data on  residential PV soft costs that could be readily compared between the two  countries. The comparison focuses specifically on host-customer-owned systems  installed in Germany in 2011 and in the U.S. in 2010.

Key findings from the installer survey include: • German installers reported average soft costs of  $0.62/W in 2011, which is roughly $2.70/W lower than the average soft costs  reported by U.S. installers

• Customer acquisition costs averaged just $0.07/W  in Germany, or roughly $0.60/W lower than in the U.S. • Installation labor requirements averaged 7.5 hours for  German systems, leading to $0.55/W lower installation labor costs than in the  U.S.   (though these survey data diverge substantially from  other estimates, suggesting a need for further validation)

• Permitting,  interconnection, and inspection (PII) processes required   10 hours of labor, on average, in Germany, with no  permitting fee, resulting in PII costs roughly $0.20/W less than in the U.S. • German residential systems are exempt from  sales/value-added tax, while U.S. systems are subject to an average sales tax  of roughly $0.20/W (when considering the geographical distribution of U.S.  systems and the existence of sales tax exemptions for PV in many U.S. states)

•  The remaining gap in soft costs between Germany and the U.S.   (~$1.15/W) is associated with overhead, profit, and other  residual soft costs not captured in the categories above

Speaker: Joachim Seel, Lawrence Berkeley National Lab