NREL Confirms Spike In Solar and Storage Costs In US

The  National Renewable Energy Laboratory (NREL), the premier government entity tasked with tracking and projecting impact of technology changes in the renewables space, has come out with its annual benchmarking report on prices. And the findings are no surprise, to those who have been in the market.

Using 2021 prices, NREL estimates that utility-scale PV systems were 6% more expensive in Q1 2022 than the equivalent period last year, rising to US$0.99/Wdc, whilst utility-scale solar-plus-storage systems rose 11% YoY to US$195 million. NREL uses two benchmarks for abundant clarity.

The two types of benchmarks in the new report are the minimum sustainable price (MSP) and the modeled market price (MMP). MSP is a theoretical national-average cash price under long-term market conditions. In this report, MSP excludes short-term cost distortions impacting the market in Q1 2022. In contrast, the report’s MMP is an estimate of the national-average cash sales price under market conditions occurring in Q1 2022, consistent with NREL’s previous benchmarks.

“NREL’s addition of the MSP benchmark in 2022 reflects our primary goal of clarifying long-term PV technology and soft cost trends to inform research and development investments,” said Vignesh Ramasamy, lead author of the report. “It is imperative to understand what goes into the cost categories that add up to the final system costs for both benchmark types.”

The analysis assumes a benchmark of 100 MW dc for utility-scale solar projects, using monofacial monocrystalline silicon modules with 20.3% efficiency. The solar-plus-storage benchmark adds a 60MWdc/240MWh battery to the standardised PV system.

By the MSP’s metrics, a utility-scale PV installation was US$0.87/Wdc, 14% lower than the MMP benchmark. The MSP for solar-plus-storage systems was 15% lower than the MMP, at US$170 million.

Meanwhile, residential and commercial PV systems also saw price rises. Residential PV saw a 2% increase and commercial ground-mounted/rooftop saw 8% compared with Q1 2021 counterparts.

With key initiatives like the Inflation Reduction Act which creates more investment opportunities in solar and their impact yet to play out in the market, prices are likely to stay elevated or rise higher.