Cost dynamics in the deployment of photovoltaics: Insights from the German market for building-sited systems

In most studies on technology change, the analysis of cost reductions of new energy technologies has been narrow and has often neglected essential processes related to the deployment of new technologies, such as photovoltaics (PV). However, in the case of distributed PV systems, other costs than for the PV modules – aka the deployment or balance-of-system costs – are significant. This review study identifies the long-term dynamics of “hard” and “soft” costs associated with the deployment of building-sited PV systems in Germany since the early 1990s. The results show that the costs for central hardware components such as inverters and mounting systems have decreased by 70–87% since the 1990s. Results also show that "soft deployment costs" such as planning and installation decreased by 65–85%, and the corresponding experience curve has a progress ratio of 88–90%. The results imply that both hard and soft deployment costs have decreased with cumulative experience. Generally speaking, deployment processes, and support for such processes, are essential for the assessment of the overall cost dynamics related to the implementation of new energy technologies such as PV.

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