Solar Energy Industry Electricity Prices - January 2012 Update

The solar electricity index draws exclusively upon the high power band (>125 watts) solar module prices in our survey. This price segment was down 1 cent per watt in December over the prior month. The inverter index reduced, but the charge controller and battery indexes held steady. Overall, the high solar condition industrial industry index was down to 15.31 cents per kWh in January 2012.

About the Indices

The residential index is based upon a standard 2 kilowatt peak system, roof retrofit mount. It is connected to the electricity grid and has battery backup to allow it to operate during times of electricity downtime. It is therefore also suitable as an index for off-grid residential uses.

The commercial index is based on a 50 kW ground mounted system that is connected to the electricity grid. It provides distributed energy and excludes any backup power.

The industrial index is based on a 500 kilowatt flat roof-mounted system, suitable for large buildings. It is connected to the electricity grid and excludes back up power.

The price index includes full system integration and installation costs.

Notes

The commercial and industrial solar electricity indexes benefit from discounts against retail prices that can be secured on volume purchases. When purchasing a residential solar energy system through a large government or utility programs, it may be possible to secure a price more consistent with the industrial price index.

No solar energy rebate programs have been built into the data. Many governments and utilities have incentives to reduce the cost of solar electricity, recognizing the broad economic benefits of stimulating a self-sustaining local solar energy market.

Financing cost is a significant factor in the index and is assumed to be 5% per annum, amortized over a 20-year life. The economic payback page on this site includes a discussion on ways to enhance solar energy’s economic equation.

The high solar insolation index is based upon a climate with 5.5 hours of sunshine average over the year. This is typical of locations like US Sunbelt States, much of Latin America, most of Africa, the Middle East, India and Australia. Mediterranean countries, followed by Japan and then Northern Europe have progressively lower average hours. Saharan and southern Africa, and the areas centered on Saudi Arabia, central Australia, Peru and Bolivia are higher.