The REAL COST of PV

[Photovoltaic Supporter]

Okay folks, time to put your money where your mouth is. Let's cut the crap and get to work here. What is the real price of PV in your area, state, county... Per KW per Watt Per Install... I say it's so screwed up we're hurting ourselves by not coming to terms with it. If you pay $ 39.00 for a cordless drill in Michigan you should pay the same thing in Texas so what is the real price of solar PV in this country? It needs to be the same anywhere you go by a fraction based on installer, distance and size of system..there is plenty work to go around so stop cutting each other

[Mike90250]

No current est, but several years ago, was about $5/KW installed ( I can't recall if that
was before or after rebates)

There is currently a GLUT of panels on the world market, mfg's are selling them at cost. Installers charge what the local market will pay. If they get hungry, the price goes down
a bit on the next bid.

[russ]

professionalism

Until PV sales and installation reach the truly professional stage where most companies know what they are doing and the average consumer has better information, confusion will reign.

Mike & others are doing good to help spread the word. You see from some questions that some want others to do the work for them - have something easy handed to them.

It is the function of individuals in the business to come up to speed. That means relatively standard packages with do's and don'ts which the supplier will not violate despite how smart the customer thinks they may be. The installation cost is the only wild card really and for that the installer has to learn how to estimate a job and execute in a very good manner.

The other alternative is to be like house siding sales which has normally been the domain of hucksters preying on the uninformed to make a quick and easy buck.

[DenverDave]

I've heard that $6.75/w is the local industry standard in Denver. A company that has organized a group purchase in Denver has negotiated a $6.10/w cost using REC's AE series of panels and SCM inverters. This cost also assumes a straightforward install with no messy problems to overcome.

[Photovoltaic Supporter]

Hey Mike, I just don't see how the industry can make money at 5 bucks a watt. After equipment and labor that just won't cut it...it's got to stay around 7 bucks plus or minus 1 buck on jobs over 4.5 kw anything smaller has to go 7 bucks plus period... How can you say you make money at 5 bucks? Seriously, maybe you need to let me in on the secret panel prices you're getting... I haven't seen anything that cheap to allow for that price...and yes before rebate....rebate is an after the fact issue...we look at overall cost of install....everything included then ask have I made any money here????

[Photovoltaic Supporter]

Hey Denver Dave, Thanks man, great info that's what I'm talking about. Thanks...for the leg up. That is what I'm driving at. We need to make this forum work for us and our customers. We need to get it together before the BigUns...create a nightmare for us. I want to do a good job and make a fair wage, that's it. I want customers happy and ready to do business with me again. To tell their family and friends how great we did on their install and price quote and product choices... to do that we need to help each other make this industry answer for itself...just as we must do each and every install we complete. At this time I work a full time job in the steel industry with a great company I've been with for almost 12 years now. I only want what is best for my customers and surely most of you agree...that is what we all want in the end. This is not a fly by night or flash in the pan business. It must be treated with upmost respect and professionalism. The whole idea of pricing out a project correctly is doing it according to industry standards, not doing it in secret and trying to get the most you can…that’s not the correct way to go about it at all. Product safety, reliability, esthetics, functionality, cost and turnkey is what its all about here. You don’t pay 10 bucks for a screw driver in Texas and 30 bucks in Louisiana, for the same tool. Maybe a dime or so difference is expectable but not several hundred percent differences for the same quality workmanship. PV, Wind and Hydro must be the same…considering standard of living in any given area of the country. We can’t have Uncle Joe tell Cousin Sue that he just put in a new solar panel array for $ 17,500.00 in Phoenix, AZ while Cousin Sue receives a quote for the same system that shows up at $ 32,500.00 in Selma, MS it’s going to really screw things up, I can assure you it will. For those of us that care we can do our part to stop this by communicating our situations accordingly. For those that wish to do otherwise we can do our best to get them out of the business by exposing them for what they are. Forgive my long winded post… this just happens to be a very serious concern of mine. We’ve seen all to often industries destroyed before they were allowed to get off the ground. We don’t want that to happen to us… I simply want to be able to quote a job with confidence that no one else quotes it so far off the mark that we both loose out…and in the end the customers decides it aint worth! I thank you all for your time and consideration… I look forward to a long and prosperous career for all of us…and for those here to learn or teach ….others… we can never know it all or learn to much! Thanks!

[Photovoltaic Supporter]

I agree Russ, you're absolutely right. But allow me to ask you how one becomes informed if they do not ask questions? You can assume a lot if you feel that is best. But in order to fully understandand what the standards are for most in the industry. I've already run into situations where county inspectors don't have a clue of how to handle PV in their area. I am currently working with our county to resolve these issues. So what you say is true but it is also without clear distinction of what should be expected of us between companies and installers, customers, counties and so on...

[russ]

I am semi-retired from a life time of building, designing and operating Midrex direct reduction iron ore plants. The typical plant would cost in the 250 million USD range.

In building homes here in the Izmir, Turkey area I have had a number of discussions with the architect about how to get the contractors to 'do it right'. He typically wants to explain the work, disappear to another site and act surprised when he returns and something is not 'right'.

Documentation is a key! Show on paper what, how and why you are going to do things. If the customer or inspector has to read the suppliers mind they should assume the worst case as is often what they will get. The inspector has no doubt been burned many times before by such situations.

The pricing thing - people often lie about what they paid just to 'look better'. Others are just talking to hear themselves talk and have no idea what they really have installed but it must be the best because someone told them so.

I suggest providing the customer a detailed offer that you can be happy with but won't take any less than. Provide exact model numbers, sizes, specs etc. For items that can not be fixed ahead of time (there always seems to be something) provide prices and approximate quantities with the final price to be corrected later. Everything on the table and upfront.

You have to figure how to avail quantity discounts. Also most builders suppliers are not the best buy around. Buying is an art to be learned - not just to walk into a store and pick up three of this and that.

[Photovoltaic Supporter]

Follow Up ( Cost )

Well I'm happy to see the response. I hope to see more cost examples, installer information and classic scenarios involving permitting and product reliability. In our next=ck of the woods, PV arrays are far from common. In fact I know of very few installs to date within a 60 mile radius. We hope to change that in the very near future. Like many start ups we hope to be up and running at 100% by year end. Our immediate concern is how to secure established manufactures that we can stand behind. That are willing to stand behind us as well. I have a background in oil & gas exploration in which has a great respect among suppliers of territorial boundaries as well as established pricing factors. I hope we too will see this sort of support in our industry soon. I cannot say this is the case anywhere at this time. If you know of any please feel free to comment. Again why should a customer receive wide spread variations in cost no matter where their located in the continental United States? This applies to net metering as well. We must push for pricing standards as well as standards in net metering across the board. It is imperative we see these issues resolved before we will see any real continuity in our industry. It

[Photovoltaic Supporter]

I realize there may be a few installers in the business that can be put into the same category with siding salesmen, most would surely not be included. It is after all a very different animal we're discussing here. That's a given I hope. But in order to best serve our customers and our industry we must share information. That is all I'm asking for here. I already know how to put a bid ie: quote together. That's the easy part. And as far as being able to do so with a fair profit margin that's no so difficult either. Where the difficulty lies is with continuity. Sure you can price by itemizing adding a 20-30% bump on all materials then figure in time of install. Or you can do a total watts multiplier or a flat rate hourly plus equipment cost due on completion of project. They could all very well end up at near the same over cost ratio. That’s why I/m asking the question to start with. Has anyone found the Holy Grail in quoting their projects? If so please share it with us and we won’t be as likely to cut our own throats or the throats of our customers?

[russ]

The only way to learn and make progress is to talk to others, read and think about what is going on - you are 100% right!

Worry about the installation ahead of time - worrying about it after there are even minor problems is too late and then you often get too much help from parties who know little or nothing.

With all 50 states regulating their utilities independently and multiple utilities in each state I doubt you are going to see anything like common FIT's in the next 1000 years - too much politics.

The guy on the nicer side of town isn't interested in paying more than someone in another area for the same quality equipment/system - I wouldn't be and I don't. My wife is one tough negotiator!

OEM's used to protect their direct customers allowing a very substantial markup between list prices and prices to the end customers. When I worked in India our buyers had that discount every time for our benefit and we were the end user. The buyers were good and understood the game as it is played. On much expensive equipment that was up to a 35% discount.

With the internet many of the secrets have gone out of pricing and generally squeezed out that easy middle man's money in many areas.

European suppliers used to have big margins and when one got a job all his friends got a piece of the action (subcontracts) - the Indians loved that as once they got the negotiating started they would end up with someone subsidizing their purchase.

One point I noted before is correct - the builders mart is usually not a low cost supplier - his suppliers are often willing to give you similar discounts in quantity. Look for the power of bulk purchases if a few parties can get together and trust each other.

[russ]

solar doc

From the US gov a document which may or may not be of interest about solar installations.

http://www.nrel.gov/docs/fy07osti/41085.pdf