The actual solar panels used are almost identical. Generally in the residential solar market you may use a slightly more expensive panel for aesthetic reasons, but the improvement in the underlying solar panel technology in terms of efficiency and cost are available in equal terms to both markets.
The inverters used in the residential market versus the solar plant market are usually quiet different and, IMHO, form two distinct markets. Reductions in the inverter cost for solar plant deployments would result in a reduction in the home market, but the relationship is not as direct as the relationship between the panels since you would rarely be able to use the same inverter in both markets.
It's somewhere in-between: residential solar, when feeding back into the grid, is only using a small fraction of the transmission compared to a commercial solar plant (in terms of length of wiring and number of transformers used to transmit a given amount of power). In fact, it will generally be (unless in a neighbourhood where nearly every house has solar installed) reducing the overall load on the grid. So it's not reasonable to expect that the value of that electricity is the same as that of the same amount coming from a large utility, but it's still probably not worth retail prices, either (though maybe it is, in certain circumstances. In cases with a very overloaded grid it may conceivably be worth more!)
Decreases in panel costs result in only modest decreases in residential solar costs, because the panels aren't the bulk of the cost of install. There's all the labor of installing them, the other equipment like inverters and electric panel upgrades, the engineering time to evaluate the site and design an optimized system size and placement, and then just the general overhead that comes with the business (sales, marketing, admin, billing, etc.). The panels themselves might only be 30% of that.
Perhaps, although i'm quite skeptical about a difference in distribution and installation. And even in the case of manufacturing, one must only consider the delta between them rather than full cost of manufacturing solar.
Residential solar reduces retail power costs @ $0.30/kWh, whereas grid-scale solar supplies wholesale power @ $0.02/kWh. (Representative figures from California.) NEM (net energy metering) amplifies this effect.
If you look at a system-cost ROI analysis, the difference between residential and grid-scale is that the latter requires more transmission lines and provides fewer jobs (which is a key part of the political economics), but residential solar comes out looking very bad.
Explicit subsidies -- which pay a part of residential solar capital costs -- are a much smaller force.
Yes, a factor of 5 is fairly close. The prices of panels and inverters has dropped, while the price of labor and wiring has stayed constant or increased. The end result is the factor of 5 that you mention, and DIY systems are becoming more popular.
One of the factors in cheaper solar is that the panels have gotten bigger. Panels grew from 250w to 300, 350, and now to 400w and 450w. The 450w panels are 82 inches by 42 inches, so taller than the average person. Larger panels require less mounting and less labor, so even if they cost more they might be slightly cheaper to install.
I think that utility scale solar will eventually beat residential solar on price because of less labor per watt to install. I sometimes think about a solar system that could be set on top of a house in a few hours and would contain the inverters and interlocks and be wired into a single breaker in the house electrical panel. A truck operator/installer and electrician could do two installs a day and the labor price would be significantly less. We are so far from this currently, with site surveys, permitting processes, individual panels in custom configurations and so on that result in several days of work spread out over months. I don't know if it could ever happen, but it is fun to think about at times.
Interesting - assuming the panels last twice as long also drops the per-watt price pretty dramatically, which changes the economics on solar panels pretty favorably.
Isn't this pretty different for utility-style solar installations versus the rest? For the former, land cost is clearly a variable. But especially for home PV, it seems like land cost is fixed.
While it does happen (shorter lifespans) you have a lot of choices in Australia too when getting solar installed in terms of the panels and the inverter used, many of them around the same price ($5k AUD for 6.6kwh panels + 5kw inverter) batteries vary wildly depending on brand.
Some simple research of the options ahead of agreeing to anything can lead to much better results.
In addition to the other objections raised to this comparison (seriously, attempting to compare a non-PV solar farm with residential PV installs is... silly at best), consider that you're not even comparing them in the right way. Ultimately you want to compare the cost per unit energy per unit time, amortized over the respective life of the panels. You also need to compare the cost of maintenance over the life of the panels. And you don't get to say "the residential ones are covered under warranty, so it's free"; someone has to pay for it in the end. When I was looking, all the residential solar installers I talked to would also remove and replace the panels for free when the building's roof needed to be replaced. Again, that's a cost, even if it isn't borne by the homeowner.
Saying that "it cost $X to build this, and that would pay for Y other things" is meaningless.
Panel efficiency and manufacturing costs alone directly equate to cost per watt.
At 18 vs 22% efficiency means buying ~20% more land or buying 20% more expensive land in a better location resulting in less transmission losses etc. Higher efficiency also means spending less money on mounting and solar trackers for the same output.
In the end different technologies means different optimizations. Steel is vastly superior to wood in many ways, but we build skyscrapers with one and single family homes with the other.
Small scale costs slightly more due to economies of scale, but it also distributes the power sources and so cuts transmission costs and adds redundancy.
Overall, as PV panel prices continue to trend downwards, we'll see less big installation in sunny places (which originally were the only ones that made financial sense) to more, smaller installs as other costs come to dominate the equations.
The cost of solar panels is now low enough to be a secondary factor for residential use. In USA and Western Europe, the cost of installing is the biggest expense, also the cost of batteries (for off-grid). In Europe there is also the availability of good quality MPPT, batteries (LiFePO4), converters - there is a lot of 110V equipment on Amazon, not 230V.
So in the overall picture, for residential installations the cost of the solar panels is not an issue, people in Europe can afford to pay a premium for German-made panels. If the efficiency is higher, that premium is well deserved, I know the efficiency of solar panels is continuously increasing, today we have more than 50% more efficient panels than 10 years ago and those were 50-100% more efficient than another 10 years ago (the base was very low, it allowed for such huge increases).
If installation costs per m² dominate because moderately-efficient panels already are dirt-cheap then using a more efficient panels that are a bit more expensive can save overall costs if you can get the same power with fewer m² and thus lower overall costs.
And even if you drive down installation costs so you can roll out cheap cells en masse you'll eventually run into a space limit for some applications. There's only so much sun-facing rooftop on each building.
The inverters used in the residential market versus the solar plant market are usually quiet different and, IMHO, form two distinct markets. Reductions in the inverter cost for solar plant deployments would result in a reduction in the home market, but the relationship is not as direct as the relationship between the panels since you would rarely be able to use the same inverter in both markets.
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