Although technological investment is still necessary to get to grid parity on a wide-scale basis, the industry's most challenging opportunity for achieving a lower cost structure lies in addressing the non-hardware (or soft) costs associated with PV installations.
When examining ways to make solar more competitive, our industry has traditionally and correctly focused on the need to drive out cost from hardware. Increasing cell efficiency, optimizing module and inverter reliability, and reducing BOS hardware costs have been core objectives of industry, government and non-government organizations – and rightly so.
When the cost-per-kWh was over $1.00/kWh, panels were $10/Wp and inverters often failed out of the box, this was critical for the economic viability of the industry. Technological maturity was a table-stake for bankability and to create a market, and emphasis on further cost reductions is still necessary.
However, as we've successfully reduced costs and increased reliability and performance on hardware, the soft costs have become an increasing percentage of each project's cost structure. According to SolarTech, approximately $2.21/Wp of residential PV system cost comes from items other than panels and inverters.
These soft costs can be broken into two categories: those that involve government or utility intervention, and those that can be addressed within individual companies.
