IHS Markit: Utility-scale PV component prices have dropped below 1.50 USD/W in 2016

Josefin Berg, IHS Markit Senior Analyst, Solar Demand
In 2016, average utility-scale PV costs have dropped below USD 1.50/W in most major markets, says Josefin Berg, IHS Markit Senior Analyst, Solar Demand

According to new analysis by IHS Markit (London, UK), declining solar photovoltaic (PV) component prices could reduce utility-scale system costs by up to 38% y-o-y in 2017.

In 2016, average utility-scale PV costs have dropped below USD 1.50/W in most major markets, says Josefin Berg, IHS Markit Senior Analyst, Solar Demand.

 

India and China have the lowest PV components and labour costs

There are still some significant differences in PV component pricing between markets mainly caused by local conditions, including import duties, grid requirements and labour costs, IHS notes.

Among the countries analysed in the IHS Utility-scale PV Projects Cost Analysis Report – 2016, India and China have the lowest costs across all components as well as the lowest labour costs.

 

IHS forecasts utility-scale PV system costs to decrease by 14% to 38% in 2017

Prices have plummeted in the second half of 2016, and IHS forecasts that the ongoing declines in module, inverter and tracker prices has the potential to reduce utility-scale PV system costs by 14% to 38% y-o-y in 2017, depending on the market.

Further cost reductions for mounting structures and trackers will rely heavily on the evolution of steel prices, whilst the extent of additional module cost reduction in 2017 will be mostly impacted by upcoming policy developments in the Chinese market.

As PV module prices converge across the main markets, differences between system costs in different markets are expected to narrow through 2020.

Global module price declines, combined with increased imports from Chinese suppliers will be the main driver of system cost reductions in the main markets.

Installation and development costs will converge in the main markets as competition increases, IHS notes.

By 2020, balance of system (BoS) costs will also decrease due to larger projects and improved system designs (e.g. 1,500 V modules).

India and China PV costs are projected to fall below USD 0.7/W by 2020, with land and grid costs being the main variables. At a cost of USD 1.3/W in 2020, Japan will remain the most expensive market at a 90% premium compared to India.

 

2016-11-30 | Courtesy: IHS Markit | solarserver.com © Heindl Server GmbH

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