2018 Solar Cost Reductions Will Offset Impact of New Tariffs on Panel Prices

Modular, pre-engineered and pre-assembled solar product to lower costs by additional $0.20/Wp in 2018, according to Rocky Mountain Institute and industry leaders

Boulder, CO - Jan 23, 2018 Rocky Mountain Institute and 35 solar energy industry leaders 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.


Participants at the Rocky Mountain Institute-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.

The four-day workshop saw over 35 leading companies applying best practices in system design, supply chain, business model, finance, and market structures to the debate. Members identified a pathway to create a modular, pre-engineered and pre-assembled solar product of standardized design targeting a fully installed cost of ¢50/W and lower costs by as much as $0.20/Wp (dollars in watt peak) in 2018 alone, corresponding to about an 8%-percent 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 U.S. 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 U.S. and around the world, it must compete without subsidy in wholesale markets.

"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," said Thomas Koch Blank, Principal, Rocky Mountain Institute

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.

Increased pre-assembly is going to have the ability to create jobs in the manufacturing sector and supply chain sector. Being able to communicate this as an integrated product offering, assembled in the U.S., that messaging is going to be important. There's not enough emphasis on solar jobs being transferable skills for those being impacted by coal plant shutdowns. Many of these jobs have transferable skills that people can slide into pretty easily.

"By taking a whole-systems approach that leverages standardization to enable preassembly and pre-engineering, 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," said Jules Kortenhorst, CEO, Rocky Mountain Institute

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. 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. We are individually and collectively committed to accelerating the delivery of solar energy's many benefits to the American people.

About Rocky Mountain Institute
Rocky Mountain Institute (RMI)-an independent nonprofit founded in 1982-transforms global energy use to create a clean, prosperous, and secure low-carbon future. It engages businesses, communities, institutions, and entrepreneurs to accelerate the adoption of market-based solutions that cost-effectively shift from fossil fuels to efficiency and renewables. RMI has offices in Basalt and Boulder, Colorado; New York City; Washington, D.C.; and Beijing.

More information on RMI can be found at www.rmi.org or follow us on Twitter @RockyMtnInst

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