Residential Costs at $2.5 per Watt (1) · Copyright**2017/SpiceSolar...

What Happens When Home Solar Costs are $2.50/watt?

Copyright 2017 -‐Spice Solar

• Design and Manufacture Rooftop Solar Mounting Solutions– Fewer parts and simpler installations => lower labor

costs– Less aluminum and fewer attachments => lower

parts costs

• Partner with module manufacturers– They add critical frame components at high

volume manufacturing facilities– So installers don’t have to do extra work on the

roof

• Focus on the Behind the Meter (BTM) market

About Spice Solar


ITC Extension Means Rapid U.S. Residential Growth

-‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2001 2005 2010 2015 2020

Annu

al In

stallatio

ns M

Wdc/yrU.S. Residential Installations

6.5 GW per year in 2020Source: GTM, SEIA


But… Installer Margins Squeezed

Source: NREL, LBNL

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

2001 2005 2010 2015 2020

Installed Co

st per DC watt

Racking and Labor Increasing as % of Installed Cost

Modules & InvertersRacking & Labor

Overhead & Profit21%

12%

12%14%

24%


$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2016 2021

$3.50

$2.50

$0.16

$0.65

Residential Selling Price

System Installations Maintenance


$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2016 2021

$1.59 $0.95

$0.50

$0.41

$0.46

$0.29

$0.94

$0.85

$0.16

$0.65

Residential Cost Breakdown

Equipment costs Direct Labor Costs Customer Acquisition Overhead Maintenance Costs


Equipment Cost Reductions

2016 2021Modules $0.81 $0.45Inverters $0.45 $0.30Racking $0.21 $0.12OtherParts $0.12 $0.08Total $1.59 $0.95


Labor and Customer Acquisition

2016 2021DirectLabor $0.50 $0.41CustomerAcquisition $0.46 $0.29


Overhead – No Big Changes!2016 2021

Engineering&Permitting $0.09 $0.09Insurance $0.09 $0.08Rent $0.21 $0.19WarrantyExpense $0.08 $0.07G&A $0.17 $0.16


• Higher efficiency modules at lower prices– Output up by 5 watts, selling price down by 3 cents/watt

• Component integration– AC modules, embedded optimizers, integrated racking

• Diffusion effect• Trend towards smaller, more efficient installers• Headwinds– New requirements, NEM changes, market variability, tariffs

Cost Reduction Drivers


• 2016 at $3.50/watt– $2.45/watt with ITC– $1.75/kwh per year (1.4 kwh/watt)– $0.07/kwh over 25 years (maintenance = salvage value)

• 2021 at $2.50/watt– $0.05/kwh

Simple Cost per kwh Calculation


• Efficient local installers• Referral sales (maintenance services)• Solar + Storage + EE?• Similarity to HVAC businesses– Relatively mature for installations–Mostly replacements and maintenance

Profitable Business Models at $0.05/kwh?


• We know how they react– NEM caps, TOU rates, demand charges, fixed charges, PURPA changes, etc.

• How will PUCs react when rooftop kwh costs are $0.05 and average electric rates are $0.20?

• How will EVs and integrated solar/storage change customer economics?

• Do customers want DERs?

What Role for Incumbent Utilities?


• Behind the Meter electric rates are $0.05/kwh• 6kw system costs about $10,000• Small, efficient local installers will crowd out more expensive large installers

• Utilities will fight solar with customer-‐hostile policies on a localized basis, fragmenting the market

• Battery storage with solar preserves customer economics

At $2.50/watt

Thank You


• Less expensive parts and labor• Designed for all roof types & orientations• Designed for high wind and snow locations• Uses standard roof mounts• Certified to UL-‐2703 for grounding, mounting and fire code compliance

• Watch the Spice Solar installation video at http://www.spicesolar.com

• Comments from installers:– “25% of the time compared to ordinary racking”– “We only want to install Spice – Amazing!”– ”Spice is better than rackless systems”

Summary


• The standard for decades• Very strong, but…

– Numerous costly parts

– Added labor for design, roofpenetrations and assembly

– New 2703 standardsrequire modules, racking and roofmounts be certified together to meet mechanical loading and grounding requirements – No more mix and match!

Rack Mount Systems


• Designed with intent to:– Reduce costs by eliminating rails

• Challenges:– Dependent on module frame for

loads (snow/wind)

– Limited to landscape orientation in almost all wind/snow conditions

– Lots of fiddly little parts, or expensive and specialized roof mounts

– Potential of voided module warranty when module mechanical or electrical failures occur

Rackless Mount Systems


A Complete Integrated Solution– Rails are built-‐in– Less expensive parts and labor– Works on all roof types and orientations with

standard roof mounts– UL-‐2703 grounding, mounting and fire

code compliant– Designed for high wind and snow locations

• Spice design load 75 psf

• 170 mph wind speed or 24” snow

Spice Solar with Built-‐in-‐Racking

Residential Costs at $2.5 per Watt (1) · Copyright**2017/SpiceSolar...

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Residential Costs at $2.5 per Watt (1) · Copyright**2017*/Spice*Solar...

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Transcript of Residential Costs at $2.5 per Watt (1) · Copyright**2017*/Spice*Solar...

Residential Costs at $2.5 per Watt (1) · Copyright**2017/SpiceSolar...

Transcript of Residential Costs at $2.5 per Watt (1) · Copyright**2017/SpiceSolar...