REDUCING SOLAR PV SOFT COSTS

The report analyzes the cost gap between U.S. and German residential solar installations, finding that U.S. installation labor costs are significantly higher due to non-value-add activities, complex racking processes, and regulatory requirements. Through a 'time and motion' study of 26 sites, the authors identify opportunities to reduce costs by adopting one-day installations, simplifying racking bases, and innovating AC electrical circuits. The report argues that by removing non-value-add activities, U.S. installers could reduce soft costs by 30% and lower total system costs to $4.43/W.

• Soft costs represent a dominant portion of residential solar costs in the U.S., accounting for over 60% of the average $4.93/W system cost, including installation labor, permitting, inspection, and interconnection (PII), customer acquisition, financing, and margins.
• There is a significant disparity in installation labor costs between the U.S. and Germany; median German installers incur costs of $0.18/W, while U.S. installers in the SIMPLE BoS project incur a median of $0.49/W.
• A 'Best of the Best' virtual U.S. installation, combining the most efficient observed activities across all U.S. sites, would cost $0.29/W, suggesting that some domestic installers already operate near German efficiency levels.
• U.S. racking base installation is particularly expensive, especially on clay tile roofs where costs are four times higher than other roof types due to extensive moisture protection requirements and the need to remove and replace tiles to access rafters.
• Moving to one-day installations is a high-impact opportunity that could reduce costs by $0.10/W by eliminating iterative 'fixed' costs such as daily setup, takedown, travel, and breaks.
• German installation efficiency is enabled by several factors: the use of scaffolding and module lifts, task specialization, uniform residential architecture (specifically 'solar ready' clay tile roofs), and simplified base installation processes.
• AC-related electrical activities in the U.S. cost approximately $0.11/W, driven by complex requirements for meters, disconnects, and conduit as specified by the National Electrical Code and local jurisdictions.
• The removal of all 'non-value-add' activities—such as avoidable delays and redundant hardware—could reduce U.S. installation labor costs by 64%, potentially undercutting German costs when adjusted for wages.
• The report identifies several specific cost-reduction opportunities with varying difficulty, including 'Design Out Animal Wire' ($0.02/W, Low difficulty), 'Base Installation Redesign' ($0.04/W, Low difficulty), and 'PV-Ready Electrical Circuit' ($0.10/W, High difficulty).

APA

MORRIS, J., CALHOUN, K., GOODMAN, J., & SEIF, D. (2013). REDUCING SOLAR PV SOFT COSTS. RMI. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2013-16_SimpleBoSRpt.pdf

Chicago

MORRIS, JESSE, KOBEN CALHOUN, JOSEPH GOODMAN, and DANIEL SEIF. REDUCING SOLAR PV SOFT COSTS. RMI, 2013. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2013-16_SimpleBoSRpt.pdf.

Wikipedia

{{cite report |last1=MORRIS |first1=JESSE |last2=CALHOUN |first2=KOBEN |last3=GOODMAN |first3=JOSEPH |last4=SEIF |first4=DANIEL |title=REDUCING SOLAR PV SOFT COSTS |publisher=RMI |date=December 2013 |url=https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2013-16_SimpleBoSRpt.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{morris2013reducing, author = {MORRIS, JESSE and CALHOUN, KOBEN and GOODMAN, JOSEPH and SEIF, DANIEL}, title = {{REDUCING SOLAR PV SOFT COSTS}}, institution = {RMI}, year = {2013}, month = dec, url = {https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2013-16_SimpleBoSRpt.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }