June 20th, 2012 by Joshua S Hill
The Federal Solar Industry Association (BSW-Solar) have reported that the average German solar system price in the second quarter of 2012 is estimated at €1.776 per watt peak, or $2.24 per watt peak at current exchange rates.
Considering that the German solar market is dominated by rooftop installations (72 percent of installations in 2011 were rooftop), this is an especially impressive number (generally, rooftop solar is more expensive than commercial or utility-scale solar). Assuming a module price of around $0.90 per watt peak, this implies an average balance of system cost of $1.34 per watt peak.
In the US, meanwhile, the average price per watt of an installed solar system is now about $4.44. That’s obviously quite a bit more than the German price.
Notably, at the end of 2011, Germany had 21.6 times more solar power per capita than the US (301.47 megawatts per million people versus 13.97 megawatts per million people).
The German market saw 650 megawatts installed in January and February, a norm for the country, but then another 1.15 gigawatts was deployed in March due in a large part to the pull-in effects of an expected April feed-in tariff cut. Second-quarter installation run-rates continue apace a well, thanks to the deployment of “grandfathered” ground-mounted projects under the pre-April 1st feed-in tariff regime.
Germany’s simple feed-in tariff policy, which pays renewable energy producers (e.g. solar energy producers) a set amount for the electricity they produce under long-term contracts.
While there is no indication the US will implement a national feed-in tariff anytime soon, the US Department of Energy is investing a lot into bringing down the “soft costs” of solar now, through its SunShot Initiative, in order to get closer to that low German price or even down to $2/watt. In fact, the DOE is offering up $10 million to companies that can get the average installed price of their solar power systems down to $2/watt.
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