The Power to Change: Solar and Wind Cost Reduction Potential to 2025

In 1997, global photovoltaic production capacity passed 500kW, later at 2002 total installed
solar PV capacity surpassed 2GW, and in 2012 exceeded 100GW. In 2015, the new additions
reached 47GW, with total cumulative installed capacity of 222GW by the end of that year;
Crystalline silicon-based PV modules represent great part of the market, with at least 90% of
new installations by capacity in recent years. This is a result of the commercial status of this
technology as well as its relatively high efficiency and low cost;
Variation on cost in different markets: structure for supporting policies and their impact on
competitive pressures, as well as, the benefits that accrue to estabilished and mature markets
with a wealth of domestic experience in implementing PV projects.;
Solar PV modules have high learning rates and rapid deployment with a 40% growth in
cumulative installed capacity in 2012 and 2013 and around 30% in 2014 and 2015.As a
consequence of this PV module prices declined by around 80% between the end of 2009 and the
end of 2015.In 2011, price declines accelerated as oversupply created a buyers market.
However, the price declines slowed between 2013 and 2015 due to the achievement of more
sustainable margins by the manufactures which lead to trade disputes and the setting of price
floors in some markets.
During Q1 2015, solar PV module prices continued declining by about 15% for crystalline
modules and by a slower 4% for thin-film modules;
The global-wrighted total installed cost of utility-scale solar PV projects declined by around 56%
between 2010 and 2015;
With the rapid fall in solar PV module and installed costs in the last five years, the share of O&M
costs in the LCOE of solar PV, in some markets has climbed significantly, being that now thay
account for 20-25% of the LCOE. In the UK, 2014 maintenance costs accounted for 45% of total
O&M costs, land lease for 18%, local rates/taxes for 15%, insurance for 7%, site security and
administration costs for 4% each, and utilities (including purchased electricity 2%).
LCOE of solar PV declined by around 58% between 2010 and 2015;
With continued rapid growth in solar PV deployment to between 1750 and 2500GW by 2030,
the global average total installed cost of utility PV system could fall fromm around USD 1.8W in
2015 to USD0.8W in 2025 a 57% reduction in 10 years. The majority of the cost reductions are
expected to come from lower BOS costs.;
For virtually ots entire history, the solar PV markets cost reductions have been driven by both
module cost declines, given learning rates of 18-22% and BoS cost reductions. With current
module prices in the range of USD0.5W and USD 0.70/W, cost reductions from modules in the
future will contribute less than in the apst to total installed cost reduction potencials, even with
very rapid growth in solar deployment. The bulk of the global cost reduction will come from BoS
cost reductions.
The share of BOs costs (excluding inverter) between 2009 and 2015 increased from 37% to 60%.
Module costs declined more rapidly than BoS costs and contributed around 68% of the total cost
reduction. For the period of 2015 to 2025, the central case sees this trend being inverted, with
modules contributing about a quarter of the reduction potential.
 Balance of the system costs for utility-scale PV plants could fall by between 55% and 74%
between 2015 and 2025 as converge towards best practice cost structures accelerates under
increasing competitive pressures. Both soft and BoS hardware reductions will each account for
more than one-third of the total balance of system cost reduction potential;
Competition increases within the markets, with a expected reduction in supply chain margins as
pofit and other overhead charged made by suppliers, manufactures, distributors and retailers
declines;
Germany, where the per-watt contribution of the utility scale profit margin is about one-third of
that in more expensive markets, such as the US and Japan;
In the US, it is estimated that system design can be reduced by up to 20% through the trend
towards modular and scalable power block solutions, wich are becoming best practice in the
utility-scale segment.
In more cost-mature markets, design and layout of the system has been standardized to a large
degree providing more limited potential.
There is expected at 66% BoS cost reduction in utility-scale, this driven by convergence towards
current practice levels. Around 90% of the BoS cost reduction potential is the result of
convergence towards best practices. Additional cost reductions will come from racking,
mounting and installation costs as increased efficiency reduces the area and hence materials
and labor needs.
Soft cost reductions (36% of the total BoS reduction potential) and hardware cost elements ,
which contribute 39% of the total reduction. Reduced installations costs account for 25% of the
total cost reduction, slightly less than the customer acquisition, financinf and margin categories
that combined account for 26%;
The racking and mounting hardware category alone is expected to contribute 15% to te overall
BoS reduction potential. Sometimes heavily over dimensioned, partly since civil engineers are
not familiar with the technology and apply inappropriate security factors;
For ground-mounted systems there are opportunities to reduce racking costs to best practice
through the optimization of the mounting foundations.
Three-qaurters of the actual cable length depends on the area of the array and thus has the
potential to be reduced by module efficiency improvements. For instance, a relative increase
module efficiency by 20% which can be assumed as realistic for the considered period, would
result in a per-watt cable cost reduction potential of approximately 15%;
The greatest cost reduction is expected to be realized in mechanical installation a inefficiencies
in the installation process are common. Efficiencies and materiasl reductions in electrical
installation are expected to contribute 6% of the overall BoS cost reduction potential.
Productivity increases with rising market maturity and volumes will likely drive cost down
further
By 2025, utility-scale BoS costs by country could fall by 31% in more efficient markets and up to
69% in less efficient markets, assuming that policies are in place to accelerate convergence in
costs. Trend towards more modular, scalable power plant developments built around cost-
optimized power blocks reduces development costs and standardizes hardware needs,
reducing engineering effort, as well as unlocking efficiencies in the selection of BoS
components/
 Germany, where BoS cost reductions of about two-fifths from 2015 levels could be unlocked. In
low cost markets the cost reduction emphasis will be possible, notably due to continued module
efficiency imporivements;
PV module prices may decline by one-third or more from current during the next decade,
depending on deployment. By, 2025, crystalline PV module costs will be in the range of USD 0.28
to USD 0.46/W. Module efficiciency increases from 16% in 2015 fro multicrystalline silicon
modules to 19.5% in 2025 (22% increase) and from 17% to 21.5% for monocrystalline modules
between 2015 to 2025;
The largest crystalline module cost reductions out to 2025 are expected to come from
polysilicon production (29-34%) and at the cell-to-module value chain steps (28-35%) depending
on the crystalline technology
Continued cell efficiency improvements are an important contributor in reducing material costs
for modules. Average cell efficiencies of 22% to 25% can be expected in 2025. The role of
increased cell efficiency in terms of cost reduction potential is important, as it may contribute
between 25% and 30% of the total potential reduction for module by increasing wattage for the
same cell area;
With increased global PV deployment, inverters have followed a strong cost reduction path. The
global average cost for inverters dropped from above 1 YSD/W in 1990 to USD 0.14-0.18/W in
2015. The learning rate of inverters has recently been reported at values ranging from 18-20%.
The cost reductinn will be driven by technological progress, which will result in inverters
becoming more like standardized commodities, and economies of scale. The latter will be driven
by the increased presence of Asia players in international markets. As a result of these trends,
cost for inverters could fall by 33-39% between 2015 and 2025. Form learning curve perspective,
the estimated cost decreases are in line with a learning rate of about 19%. Analyists have
estimated a decrease of inverter costs of around 40% towards 2025;
The global LCOE range of utility-scale PV systems is expected to continue its downsward trend,
which will be driven by more efficient future csot structures caused by lower BoS costs, as well
as by continued reductions in moduel costs towards 2025;
From 2010-2015, the capacity witghted average LCOE decreased 58%. PV could decline from
USD 0.13/kWh in 2015 to USD 0.055/kWh by 2025 (59% decline)

Insights from the experience with Solar Photovoltaic Systems in Australia and Indonesia

In the last five years Australia has experienced a rapid deployment of grid-connected household
rooftop photovoltaic (PV) systems, to the extent that around 1.25milion households (around
15% of all households) now have rooptop solar PV systems;
Solar energy research started in Australia in 1950s emphasizing on solart thermal conversion
processes. Solar Photovoltaic commenced in the 1970s ;
The installed capacity exceeded 7MW by the early 1990s and 130MW by the end of 2013. Total
grid-connected PV system capacity exceeded 3GW by the end of 2013, with all but 24MW being
small distributed PV systems, however the rate of installations appear to be slowing;
A number of factor have contributed to the rapid uptake of distributed grid connected PV
systems over recent years:
o Rising residential electricity tariffs;
 o Falling purchase for distributed PV systems and growing public acceptance of the
technology;
o Emergence of many small businesses engaged in OV system design and installation;
o Government policy measures that supported the uptake of sistributed PV systems;
Australian policy measures included feed-in tariffs (FiTs), green electricity schemes, renewable
potifolio standards, investment funds, net metering, green mortgages, sustainable building
requirements and utility programs. The most influential policy: Fits.
PV systems are currently being installed in Australia at a combined rate f around 70MW per
month with an average size of about 4.5Kw.;
Solar PV systems have been installed in a wide range of grid-connected and off-grid applications
in Indonesia since the 1970s.By 2010, there was again significant PV systems deployment and
the Indonesian state-owned electricity supply begas a key role, lauching a number of PV
programs including combined overall target of 634 MWp by 2020. In 2013, the government
released PV feed-in-tariffs offering up to 30US cent/KWh.

Photovoltaic solar energy: conceptual framework

Due to its fast growth perspective and high levels of investment involved, the photovoltaic
market is now being more disputed around the world, epscially in Europe, China and in the
United States;
Photovoltaic technologies consumer per unit of electricity produced 644 times more material
resources , 7 times more human resource and 10 times more capital than nuclear technology;
Extreme inefficiency of PV technologies in regions of moderate unshine to hep achieve the goal
of providing a resource-efficient, efficient electricity supply system - clear indication of the
extreme inefficiency of PV technologies in regions of moderate sunshine to hwlp achieve the
global of providing a resource-efficient, efficient electricity supply system;
As the environmental impacts, they are minimal, photovoltaic systems remove the need for
preliminary studies that require long-term assessment, unlike the highly polluting systems;
Floating type photovoltaic solar panels have numerous adavantages compared to grounded
solar panels, including fewer obstacles to block sunlight, convenient energy efficiency, and
higher power generation efficiency, due to their lower temperature under panels. In addition,
the solar installation brings benefits to the aquatic environmenta because shading of the plant
prevents excessive evaporation of water, limits algae growth and potentially improves water
quality;
During the period between 2000 and 2015 the growth rate of photovoltaic installations was of
41%. In China and Taiwan its market shre was about 71% of global sales, at the end of 2015.;
The market for photovoltaics systems will likely continue to grow in the future as strongly as so
far, du to the thrust of subsidies, tax breaks and other financial incentives. Support for R&D and
photovoltaic technology change are crucial aspects in accelerating the widespread adoption of
photovoltaic systems;
Mean while, South Korea has change its plans for renewable energy technologies, from RPS
setting to minimize the financial burden on the government;
The different rates of technological progress of photovoltaic technologies affect the dynamics of
the market. The photovoltaic technology on crystalline silicon accounted for about 93% of the
 total production in 2015. The participation of multicystalline silicon technology was about 69%
of total production;
The cost aspect of photovoltaic electricity is influenced by location. The type of technology used
and the complexity of the system also influence the costs;
It is observed that in the last 35 years, the module price decreased by about 19.1% at every
duplication of cumulative production modules;
Photovoltaic materials or thin film and the third generation ones are the most likely candidates
to continue the 80% price reductions;
The main factors responsible for the degradation of photovoltaic calls are: solar radiation,
humidinty, temperature and dust;
Current PV plant suppliers cite operating lifetime of a 30yeat OV installation, but the warranty
for the material is usually limited to 5 years due to damaging events such as damage from
improper installation or maintenance hail, snow and storm, etc;
Studies on the generated waste suggest that it is possible that by 2035 the total number of
photovoltaic panels will be about 3,000,000t, of which about 8000,000t belong to CdTe
technology and 45,000t for CIGS technology;

The prospects for cost competitive solar PV power

In 2010 alone, almost 17GW of new photovoltaiv (PV) power was installed worldwide 250%
increase relative to 2009; equal to the total cumulative amount of solar PV power installed since
the commercial inception of solar PV technology in the 1970s;
Proponents of solar power see the rapid growth of the solar PV industry and the dramatic drop
in the price of panels as evidence of increasing competitiveness of this energy source. In
contrast, skeptics, attribute this to generous public policies in the form of tax subsidies and
direct mandates for renewable energies;
Levelized Cost of Energy (LCOE) A life cycle cost per kilowatt hour kHWh and is to be
interpreted as the minimum price per kWh that an electricity generating plant would have to
obtain in order to brask-even on its investment over the entire life cycle of the facility;
Since its inception in the 1970s, prices of panels have fallen at a rate that is remarkably
consistent with the traditional 80% learning-by-doin-curve. Solar panels have on average
declined by approximately 20% every time the cumulative volume of solar PV power
installations has doubled;
Solar PV will also become cost competitive for utility-scale facilities by the end of this decade.
Commercial-scale installation will be able to generate electricity at cost levels that are
competitive with the current retail electricity prices within the next ten years;
Intermittency of solar power is one of the principal obstacles for this source of electricity
generation to serve base-load needs, unless it can be combined with some energy storage
device;
For BoS prices there does not seem to be a well-established learning curve pattern as there is
for module prices. Given the dramatic decreases in module prices in the last 3 years, BoS csts
now represent upwards of 50% for most solar projects, and as a consequence cost-reduction
efforts are increasingly moving towards this area;
 Utility scale crystalline silicon PV will be cost competitive with natural gas power plants in 2020;
Commercial-scale crystalline silicon OV will attain grid parity within a decade, even in the
absence of the current federal subsidies only applies to installations in a favorable geographic
position;
Current federal tax subsidies for solar power are undoubtedly and important driver of the
trajectory of future solar installations;
Suggests that solar PV does not require a technological breakthrough in order to become
economically viable within a decade;
Suggest, as of 2011 utility-scale PV projects generate electricity at a cost (LCOE) that is still some
35-50% above the comparable cost of generation facilities powered by conventional fossil fuels;
And removing the tax incentives would single-handedly increase the cost of electricity from soar
PV by 75%;
From the perspective of a commercial user, they found that rooftop installations of solar PV
installations can already be cost competitive relative to the benchmark of retail electricity prices
that the commercial user would have to pay;
Our sensitivity analysis reveals that the capacity factor, which in turn on geographic location, is
the most crucial variable in driving the overall LCOE;
The prices of cells and modules have on average come down about 20% each time the total
(cumulative) capacity of solar installations has doubled;
If furthermore solar facilities are installed at a rate of about 30GW per year, which would equal
the amount of capacity added in 2011, we obtain two predictions: utility-scale facilities are on
track to achieve cost competitiveness by 2020; commercial-scale installations will able to
achieve grid-[artity at the retail price elvel, that is, they will be cost competitive even if the
prefential tax treatment of solar PV were to be discontinued at that point in time.

SOLAR ENERGY: MARKETS, ECONOMICS, POLICIES

Solar energy markets have regained momentum since early 2000, exhibiting phenomenal
growth recently;
The costs of solar energy technologies have dropped substantially over the last 30 years. For
example, the cost of high power band solar modules has decreased from about $27,000/kW in
1982 to about $4000/kW in 2006; the installed cost of a PV system declined from about
$16,000/kW in 1992 to around $6,000/kW in 2008;
Reason: number of supportive policy instruments, the increased volatility of fossil fuel prices
and the environmental externalities of fossil fuels, particularly greenhouse gas emissions;
Despite a large drop in capital costs and an increase in fossil fuel prices, solar energy
technologies are not yet competitive with conventional technologies for electricity production;
Solar energy technologies face a number of technological, financial and institutional barriers
that further constrain large-scale deployment ;
Share of solar energy global energy supply mix could exceed 10% by 2050;
Global installed capacity OV (both grid and off-grid) increased from 1.4GW in 2000 to
approximately 40GW in 2010 with an average annual growth rate atround 49%;
The impetus behind the recent growth of solar technologies is attributed to sustained policy
support in countries such as Germany, Italy, United States, Japan and China;
 By December 2010, global installed capacity for PV has reached around 40GW of which 85% grid
connected and remaining 15% off grid;
Market dominated by Crystalline silicon based PV cells, which accounted for more than 80% of
the market in 2010;
A number if countries are expericing a significant market growth. Notably Czech Republic has
installed nearly 2GW of solar PV by December 2010, up from almost zero. India had a
cumulative installed PV capacity of 102NW and China a cumulative capacity if 893MW at the
end of 2010.
The recent trend is strong growth in centralized PV development with installations that are over
200kW, operating as centralized power plants;
The levelized cost of solar energy is still much higher compared to conventional technologies for
electricity generation with exeption of gas turbine. Capital cost accounts for more than 80% of
the levelized cost for renewable energy technologies, it accounts for less than 60% in
conventional fossil fuel technologies. Existing studies expect significant reduction in the capital
costs of solar energy technoliges;
The minimum values of levelized ocst of any solar technologies would be higher than the
maximum values of LCOE of conventional technologies for power generation even if the capital
cost of solar energy technologies reduced by 25%;
It would be unfair to compare solar energy technologies with fossil fuel technologies ithout
accounting for those externalities (CO2).. However, minimum values of levelized costs of solar
energy technologies would be higher than the maximum values of the levelized costs of fossil
fuels technologies even if the climate change damage costs of 100/tCO2 are imputed to fossil
fuel technologies . If we assign a climate change damage costs of US$100/tCO2 to fossil duel
technologies, solar energy technologies would still presently be economically unattractive as
compared to fossil fuel technologies - Climate change mitigation benefits would not be sufficient
to make solar energy technologies economically attractive;
Solar energy could reduce transmission and distribution costs and also line losses. PV carry very
short gestation periods of development and, in this respect, can reduce the risk valuation of
their investment. They could enhance the reliability of electricity service when T&D congestion
occurs at specific locations and during specific times They can also protect consumers from
power outages;
The main technical barriers include low conversion efficiencies of PV module; performance
limitations of system components (batteries, and inverters) and inadequate supply of raw
materials (silicon);
In the case of stand-alone PV Systems, storage is an important concern, as is the shorter battery
life compared to that of the module. Furthermore, safe disposal of batteries becomes difficult in
the absence of a structured disposal/recycling process;
The economic barriers mainly pertain to initial system cost. Cost comparisions for solar energy
technologies by suppliers and users are made against estabilished conventional technologies.
Soalr energy technologies thus face an uneven playing field;
Financial institutions consider solar energy technologies to have unsually high risks whule
assessing their creditworthiness. This is because solar energy projects have shorter history,
 lengthy payback periods and small revenue stream. This implies higher financial charges on solar
energy projects;
Institutional barriers: inadequate numbers of sufficiently trained people to prepare, install and
maintain solar energy systems is common. Pv systems have to overcome cumbersome and
inappropriate interconnection requirements such as insurance, metering and billing issues;
The strong growth in solar energy markets, notably those for grid-connected solar PV and solar
thermal water heating has been driven by the sustained implementation of policy instrumets in
Europe, the US and some developing countries;
FIT : The tariff is based on the cost of electricity produced plus a reasonable profit for the
producer. It aims to send a signal to potential investors to make plong-term invetments on new
and innovative technologies and thus ultimately help drive down the cost of those technologies.
FiT has played a major tole in boosting solar energy in countries like Germany and Italy, which ae
currently leading the world in solar energy market growth. A study evaluating renewable energy
policies in Eu countries found that the FIT is the most effective policy instrument to promote
solar, wind and biogas technologies;
The FIT is regarded as the key drover for growth of grid connected solar power. However it still
faces a number of challenges. While FIT provides icentives to investors by guaranteeing
reasonable rates of return on investments, it does not help subsidize the high up-costs. Fits on
high cost technologies like solar put upward pressure on electricity rates in the near term to
significantly scale up the deveployment of such technologies. FIT policies guaranteeing grid
interconnection, regardless of location on the grid, could increase transmission costs if projects
are sited far from load centers or transmission or distribussion lines.FIT policies designed to
periodically adjust to account for changes in technology costs and market prices over time pose
a challenge as changing payment levels too often can increase uncertainties to investors and
overall market risk

A study on Power Generation of Floating PV System Considering PV Environmental Impact

The market for solar energy is expanding due to introduction of the RPS( Renewable Portfolio
Standard);
The floating PV System has an advantage that allows efficient use of the nations soil without
bringing damages to the environment;
Kore has announced that the REC value will be 1.5 for floating PV systems, the same value as
BPIV (Building Integrated Photovoltaic System) from year 2013;
A 100kW floating PV system in Hapcheon is forming a 33 tilt and its installed capacity is
99.36kW, composed of 414 240W modules, monthly average generated quantity during January
2012 to December 2012 was 10,853kWh, and the average capcity factor was 14.9%.
A 500kW floating PV system in Hapcheon is forming a 33 tilt and its installed capacity is 496.8kw,
composed of 2070 240W modules. Monthly average generated quantity during October 2012 to
march 2013 ws 55,028kWh, and the average capcity factor was 15.2%.
Compared with 1MW overland PV system installed in Hamangun, 60km southeast from
Hapcheon, where the solar radiation and temperature are similar, and also has similar date of
installation (2012). Haman 1MW overland PV system a fixed 30 tilt and its installed capacity is
935.9MW, while composed of 4,000 250W modules. Daily average generation of Haman whent
 converted to 99.36kW; Hapcheon 100kW floating PV systms value is 13.5% higher. Daily
average generation of Haman when 496.8kW, coeddicient of utilization of the 500kW and 1MW
shown 17.1% and 15.5% respectively, presenting that Hapcheon 500kW floating PV systems
value is 10.3% higher than of Haman 1MW system;
Koreas first floating PV system was constructed in Juam Dam in August of 2009. Juam 2.5kW
floating and overland PV system are at an angle of 11 and consists of twelve 200W modules. The
percentage of floating PV use in May was 15.39% higher than the overland PV system. Also, the
average percentage of floating PV use from January to July was 14% while that of overland was
13%, which means that the percentage of floating PV use was 7.6% ghigher than that of
overland PV. Day time temperature of floating PV module was lower than overland PV modules;
In developing floating PV system, effecr of wave and wind on the structure must be considered
(wind drift)- SMB method and Wilson method. During period of analysis, average daily distance
traveled was 5m while maximum distance traveled in a day was 20m;
The structure movement and rotation due to wind speed have a significant effect on generation
efficiency. Significant amount of change in generation efficiency in relation to wind speed.