Quantifying Non-Hardware Balance of System Costs for Photovoltaic Installations in the United States Using a Combined Annual Expenditure-Labor Hour Productivity Approach

This paper presents results from the first U.S. based data collection effort to quantify non-hardware, business process costs for PV systems at the residential and commercial scales, using a bottom-up approach. Annual expenditure and labor hour productivity data are analyzed to benchmark business process costs in the specific areas of: (1) customer acquisition; (2) permitting, inspection, and interconnection; (3) installer labor costs associated with third party financing; and (4) installation labor. Annual cost and labor hour data were collected from 87 installers. After eliminating outliers, the survey sample consists of 75 installers, representing approximately 13% and 4% of 2010 added PV installations at the residential and commercial scales, respectively. Results indicate that business process costs benchmarked in this analysis (including assumed permitting fees) total $1.52/W¹ for residential systems (ranging from $0.66/W to $1.66/W between the 20th and 80th percentiles). For commercial systems, the survey results suggest business process costs of $0.99/W for systems <250 kW (ranging from $0.51/W to $1.45/W between the 20th and 80th percentiles), and $0.25/W for systems >250 kW (ranging from $0.17/W to $0.78/W between the 20th and 80th percentiles)². We conclude that business process costs present significant opportunities for cost reductions.