Analysis of Solar Mounting system Cost in Recent Years

2020-03-04 11:41
This chapter identifies the current cost solar mounting system for solar PV based on cost data obtained from the questionnaire relating to power plants which commenced operation between 2017 and 2019 (including plants slated to commence operation).

1.1. Characteristics of investment cost structure
Analysis of Solar Mounting system Cost in Recent Years
Firstly, the most prominent cost trend seen in recent years is a continued fall in the investment cost for solar PV (Fig. 1). From 2017 to 2018 the median investment cost has plunged. Although investment costs for power plants which plan to commence operation in 2019 have risen from 2018 levels, they remain approximately 20% lower than 2017 levels. Looking at the average cost, 2018 and 2019 levels are almost identical, and represent a significant decline in investment cost compared to 2017 levels. In consideration of the above, we believe that as a trend, the investment cost of solar PV is declining.Reviewing the data by cost item shows that the unit cost of the main hardware such as solar PV modules and inverters has declined significantly (Fig. 2). In particular, the unit price of solar PV modules has fallen 32% in one year. The largest contributor to this decline in cost for solar PV modules is a fall in the price of modules produced by overseas manufacturers. Particularly distinctive is the fact that the price for modules produced by overseas manufacturers fell significantly from 2017 to 2019.During the 2017-2019 period, the average price of Chinese and Taiwanese manufacturers declined by 39%, while that of other overseas manufacturers dropped by 52% (Fig. 3). In the case of "other" overseas manufacturers, the average price level in 2019 has fallen below 40,000 yen/kWh in what could almost be considered a price rout. Meanwhile,Japanese manufacturers have been unable to keep pace with the fall in module prices, and may be losing their solar mounting system cost competitiveness.
A similar trend is occurring in inverter pricing.A review of annual pricing trends by size shows that a significant decline in price occurred from2017 to 2018. The average price of high voltage inverters has almost halved from the 2017 level of24,000 yen/kW to 14,000 yen/kW. This decline has occurred across virtually every size range, making it likely that some sort of major shift has taken place in the overall market (Fig. 4).This trend may by attributable to the following two factors. Firstly, the increasing market share of cheap overseas inverter manufacturers. Indeed, the import ratio (unit number base) for inverters for the domestic non-residential market rose from 29.6%in the first half of fiscal 2017 to 38.1% in the first half of fiscal 2018 (The Japan Electrical Manufacturers' Association, 2018). In this way, the ratio of imported inverters in the Japanese market is increasing year by year - a comparison of the current level against the 6.5% ratio in the first half of fiscal 2014 illustrates the extent of this trend.The second factor is that distributed inverters are increasing. In particular, conventional high voltage or greater modules typically employed a central inverter system that incorporated a small number of large-sized inverters. In the case of central inverters, although the number of inverters installed is small, a separate junction box was required, requiring foundation work to install the system, facilities to house it, and related construction work. In comparison, although distributed inverters have a large number of inverters, no junction box is necessary, the inverter can be installed together with the solar mounting system,and there is no need to construct a unit to house the inverter.Reviewing trends in mounting system costs,although there is variance according to the type of mounting unit, a general decline in prices can be observed. As shown in Fig. 5, mounting systems can be classified into four main types. The average price for each system type is shown in Fig. 6, and an overall decline in price levels for each type can be confirmed3. Although the unit price for ramming type and concrete type systems has declined, it is evident that ground screw type systems remain the cheapest.
Analysis of Solar Mounting system Cost in Recent Years
However, as solar mounting system design has a large impact on the workload and the difficulty of the installation,when considering investment cost, coming to a judgement based on mounting system unit cost alone is hasty. In actuality, with regard to installation costs concrete type systems are the cheapest to install, followed by ramming type systems. Furthermore, looking at the annual change in installation costs, although trends differ by system type, ageneral decline is evident.

Based on the above, we studied the total installation-related cost, including solar mounting structure unit cost, installation unit costs, and the cost of other hardware such as cables, junction box, etc. As the change in mounting system unit costs was dramatic, we used data from plants which commenced operation between 2018 and 2019 (including plants slated to commerce) for our comparison scope. As outlined in Fig. 7, results showed that the median values for ramming type and ground screw type systems were of an equivalent level, while ramming type systems were cheaper on a quartile range basis. This is believed to be because installation costs for ramming type systems can be kept lower than for ground screw type systems.

Grid connection costs

Grid connection costs vary significantly due to a range of factors. Factors believed to have a major impact on the grid connection cost include voltage level connected and distance to the connection point. In the data gathered, almost all voltage levels of 7.7 kV or lower had a short grid connection distance of less than 100 meters. Although the sample size over 7.7 kV was small, all had a grid connection istance of 1 kilometer or greater. This would indicate that when considering the grid connection costs for systems 7.7 kV or lower (low voltage/high voltage), the distance of the power lines is not a significant roblem.
Regarding grid connection unit cost (yen/kW) by voltage class, costs for 6 kV and above are cheaper than for 0.6 kV and below, and costs are cheaper for power plants that are mid-sized or larger. However, there is significant variance in grid connection unit costs in each voltage class. A large variance in grid connection unit costs despite a short grid connection distance indicates that other factors are at play.
Accordingly, as one possibility we studied the variance in cost according to the party performing the connection work. In many cases, the electricity-generating business commissions the connection work to a power transmission and distribution business operator, pays electricity charges, and has the power line installation work conducted on their behalf. On the other hand, there are also cases where the lectricity-generating business performs the work required to install power lines to the grid connection point by themselves. An investigation of the grid connection costs according to the party performing the connection work for power plants in the voltage class from 0.6 kV to 7.7kV showed, as outlined in Fig. 8, that costs were significantly lower when the generation business operator performed the work themselves. As the grid connection costs shown here all involve grid connection distances of less than 100 meters, we believe that any differences in connection costs due to distance can essentially be disregarded.

 

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