How Low Will Photovoltaic Prices Go? AN EXPERT DISCUSSION

Transcription

1 Hw Lw Will Phtvltaic Prices G? AN EXPERT DISCUSSION Please refer t this dcument as: Near Zer,Hw Lw Will Phtvltaic Prices G? An Expert Discussin, Masn Inman, 6 December 2012 (available at:

2 2 <- Technical Summary f Expert Discussin - 19 Octber 2012 Hw Lw Will Phtvltaic Prices G? Summary f a Near Zer Expert Elicitatin Slar pwer electricity frm phtvltaic panels is nw becming cmpetitive in certain markets, such as in Germany during the hurs f peak demand. But in mst ther markets, it is still t expensive t cmpete with lder, established surces f pwer such as calfired pwer plants. In frecasting the future f the slar pwer industry, and the expansin f clean energy in general, the price f slar pwer in the next 10 t 15 years will be a crucial factr perhaps the deciding factr. T get a sense f what future prices fr slar pwer are likely t be, as well as ther challenges and bttlenecks that the industry faces, Near Zer cnducted a frmal, quantitative survey (an expert elicitatin ) that drew n frm industry, universities, and natinal labs. Such surveys are a means f frmally cllecting expert judgments n a tpic. By aggregating frecasts made independently by a variety f experts, the results reflect the cllective wisdm f the grup abut hw the slar pwer industry is mst likely t develp, and als help t characterize the range f uncertainty abut the future. that has prevailed since This will bring dwn the price f slar pwer sufficiently that it will be far mre cmpetitive than it is tday. The experts frecast a large expansin f the amunt f installed slar pwer, increasing mre than 10 times ver the decade frm 2010 t 2020, an expansin that will cntinue at a similar rate until at least Hwever, this success stry is dependent n slar pwer prices cntinuing t fall, which will require cntinued and pssibly increased levels f spending n research and develpment, the experts said. If slar pwer prices cntinue t fall as expected in the survey, then the large expansin f installed slar pwer culd be achieved while requiring spending less each year than the wrld currently is spending n slar pwer installatins. But if prices were t hld steady rather than falling, then the same expansin f slar pwer, ver the perid 2012 t 2025, wuld cst at least 50% mre adding up t several hundred billin dllars. The results f Near Zer s survey, cnducted in 2011 and 2012, suggest that prices fr slar pwer will cntinue t fall, in keeping with a lng-term trend

3 3 <- Technical Summary f Expert Discussin - 19 Octber 2012 Glssary: Slar mdule: The part f a slar panel that takes in sunlight and cnverts it int electricity. In traditinal slar systems, it is made f sheets f black silicn. In thin-film slar panels, the mdules are made f a thin layer f semicnductr, such as cadmium telluride, that is depsited nt a sheet f metal. Slar panel: A traditinal slar panel includes the mdule, usually cvered with a sheet f glass, and enclsed within a metal frame. Balance f Systems (BOS): All the parts f slar pwer system, excluding the slar mdule. Different slar pwer systems differ depending n where they re installed (such as n a rf r n the grund), but BOS can include: an inverter (which cnverts DC electricity frm the mdule int AC electricity fr the grid), batteries, charge cntrllers, and the frame arund the mdule and ther supprt structures. Annual installatins: The amunt f slar mdules installed, measured by their capacity (the electricity they culd prduce at the peak time f day, in watts). In 2011, the industry installed abut 30 gigawatts (GW, r billins f watts) f slar capacity. Ttal installatins: The all-time ttal amunt f slar mdules installed, up t any given date. Over the rughly 40-year existence f the slar phtvltaic industry, it had installed by the end f 2011, a ttal f nearly 70 GW f slar mdules. Als knwn as cumulative installed capacity.

4 4 <- Technical Summary f Expert Discussin - 19 Octber 2012 Prices Have Fallen, Mst f the Time > As the slar pwer industry has grwn ver the past fur decades, prices have plummeted fr slar phtvltaic (PV) mdules the part f a slar panel that captures sunlight t create electricity. (See glssary fr definitins f slar mdules and ther cmpnents f slar pwer systems.) The slar pwer industry has grwn enrmusly since its early days in the 1970s, and at the same time prices fr slar mdules have fallen sharply (Fig 1). The ttal amunt f installed slar phtvltaic panels grew frm 10 megawatts (MW, r millins f watts) in 1981 t 100 MW in 1987, and then t 1000 MW in panel manufacturing capacity has expanded greatly while the glbal ecnmy has struggled and prices f slar mdules have fallen faster than ever befre. Tday, prices are rughly back in line with the lng-term trend (Fig. 2), and ver the lng-term, there is a clear dwnward trend in prices, said Gregry Nemet f University f Wiscnsin, Madisn. Hwever, there are cncerns that as a result f high gvernment supprt, a glut n the market, and resulting cmpetitive price cuts, current prices may be artificially lw. Accrding t sme analysts, current slar mdule prices f abut $1.10 per watt may nt reflect the csts f prductin, and sme manufacturers may be selling at a lss. 3 With each 10-fld increase in the ttal that had been installed, the average sales price f slar mdules decreased by abut half a recrd that rivals the imprvements in ther energy technlgies. Fr example, frm 1987 t 2000, the ttal number f slar mdules that had been installed increased 10- fld, meanwhile the industry cut mdule prices by half, frm abut $8 per watt t abut $4 per watt. 1 Frm the start f the 2000s, hwever, it has been mre difficult t discern a clear trend in prices. Frm 2002 t 2007, the industry grew very rapidly, with slar panel installatins rising n average 40% each year. During that time, shrtages f silicn the main building blck f traditinal slar mdules caused the price per watt t actually increase during this perid, bucking the lng-term trend. 2 But since 2007, slar Near Zer s Survey > In the utlk fr the cming decade, a few majr questins lm. Will the slar industry manage t cntinue pushing dwn prices fr slar pwer systems? What wuld be required, in terms f research funding and industry supprt? And hw much des it matter if this trend cntinues? T seek answers t these questins, Near Zer cnducted an expert elicitatin frm 2011 t 2012, psing quantitative questins abut future prices f slar pwer systems, research pririties, as well as qualitative questins abut the frces driving the price reductins. 1> The price f mdules is expressed here in terms f dllars per watt ($/W) f pwer utput when under full sunlight. 2> Bazilian, M. et al Recnsidering the Ecnmics f Phtvltaic Pwer, Blmberg New Energy Finance (2011), p 3. 3> United Natins Envirnment Prgramme, Glbal Trends in Renewable Energy Investment 2012 ; discussin f experts rganized by Near Zer.

5 5 <- Technical Summary f Expert Discussin - 19 Octber 2012 T assess experts expectatins fr the future, Near Zer asked a panel f mre than a dzen experts frm industry and academia t frecast the future f the industry, answering a series f quantitative and qualitative questins abut hw quickly the industry might grw, hw much the price f slar pwer systems might change in the future, and what wuld be required t ensure that slar pwer cntinues t get cheaper in the future. The survey asked experts hw lng it might take fr the slar pwer industry t reach tw milestnes, f having prduced a ttal f 300 GW and 600 GW (gigawatts, r billins f watts) f slar mdules rughly 10 times and 20 times mre than had been prduced up t the end f 2010, respectively. Experts were als asked what the average sales price f slar mdules was likely t be at each f thse milestnes. The questins did nt specify plicies r ecnmics (such as the level f gvernment supprt r the price f cmpeting energy technlgies); the experts were asked nly what they thught was mst likely t ccur. Prices t Cntinue Falling > The general cnsensus f these 21 experts frm universities, industry, and gvernment labs was that, fr the next 15 years at least, slar mdule prices will likely cntinue t fall, in keeping with the lng-term trend since But fr this trend t cntinue fr the lng run will require mre investment in basic research. Figure 1: Slar pwer expected t expand greatly thrugh Experts were asked hw lng they thught it wuld take t reach cumulative deplyment f 300 GW and 600 GW f slar pwer, and the average answers are marked by red squares. These expectatins fit with an expected rate f grwth f annual installatins f 4% per year. On average, the experts estimated that by 2018, the industry will have prduced a ttal f 300 GW f slar mdules, and that seven years later, in 2025, the industry wuld reach an all-time ttal f 600 GW (Fig. 2). (Fr cmparisn, 300 and 600 GW f slar pwer capacity wuld supply abut 1% r 2%, respectively, f current glbal electricity use.) These expected milestnes culd be met by annual grwth f 4% in the amunt f mdules installed

6 6 <- Technical Summary f Expert Discussin - 19 Octber 2012 each year, starting frm 2011 s recrd f nearly 30 GW installed. The experts average expectatin is rughly similar t a prductin frecast frm the Eurpean Phtvltaic Industry Assciatin (EPIA), fr a scenari with mderate supprt fr the PV industry, but frecasts less grwth than an EPIA scenari that includes strng market supprt. 4 In Near Zer s survey, the PV mdule prices expected by experts spanned a wide range, but almst all f the experts surveyed expected that prices wuld cntinue t drp at least as quickly as the lng-term trend. The median price expected after 300 GW f all-time prductin was $0.77 per watt, and prductin f 600 GW a price f $0.67 a frecast that prices will drp slightly faster than they have ver the lng-term, althugh mre slwly than they have in the past few years (Fig. 2). Figure 2: Falling prices fr slar mdules. As the ttal amunt f slar mdules prduced has increased ver the past few decades (frm left t right), the price per watt has als fallen. Prices are frm Nemet (2009), and prices fr 2010 and 2011 are based n data frm Navigant and Blmberg New Energy Finance. 5 Blue circles indicate the expectatins frm Near Zer s survey, fr slar mdule prices at 300 GW and 600 GW f ttal installatins (als called cumulative capacity). Als shwn fr reference in green is the mdule price target f the Department f Energy s SunSht Prgram. 4> Eurpean Phtvltaic Industry Assciatin, Glbal Market Outlk Fr Phtvltaics Until 2016, May > Nemet, Gregry F. Interim mnitring f cst dynamics fr publicly supprted energy technlgies, Energy Plicy (2009); Ernst & Yung Renewable energy cuntry attractiveness indices, May 2012; Natinal Renewable Energy Labratry, PV Manufacturing Cst Analysis, June 22, 2012.

7 7 <- Technical Summary f Expert Discussin - 19 Octber 2012 Breakthrughs Needed > The past few years have seen large imprvements in slar mdule manufacturing in China that have brught prices dwn sharply hwever, they have made small if any actual prcess cst reductins and nly at the margins in a Suthwest Airlines apprach, said Nathan Lewis f Caltech. Further prcess cst reductins wuld require many aspects f the slar pwer industry t develp favrably, said Gregry Nemet f the University f Wiscnsin. These include reductin in the cst f materials, technical advances that imprve electrical cnversin efficiency, and new technical generatins f PV. If mst f these d nt ccur, he said, it is hard t see hw [the expected prices] can be attained and then sustained. Fr prices t fall substantially belw the average expectatins in Near Zer s survey wuld likely require changes in the slar pwer industry, accrding t cmments frm many f the participants. Fr example, experts said that reaching much lwer prices wuld require a breakthrugh in BOTH semicnductr and encapsulatin materials csts (Steven Hegedus, University f Delaware), r a breakthrugh in installatin methdlgy (Danielle Merfeld, GE Glbal Research). These respnses stress the need fr cntinued research and develpment in rder fr prices t cntinue falling fr the lng term, beynd the next decade. Billins f Dllars at Stake > Althugh the differences in prices per watt may seem small between current PV mdule price per watts and what experts expect in cming years may seem small, the experts als expect hundreds f billins f watts f slar panels t be installed s even small differences in prices quickly add up. Annual grwth in annual installatins wuld need t be apprximately 4% t fit with the experts average expectatin fr reaching 300 GW and 600 GW by 2018 and 2025, respectively. If prices fr slar mdules and BOS als fall as expected by the surveyed experts, then annual expenditures n slar phtvltaic energy culd gradually decrease frm the recrd spending in 2011 f $147 billin, even as the ttal amunt f installed slar systems increased each year. Therefre, anticipated price reductins wuld allw an increase in annual installatins matching the experts expectatins, withut requiring that the wrld spend mre n installatins each year than it did in Hwever, fr prices t cntinue t fall fr the lnger term will require cntinued investment in R&D, the experts said. And t exceed these expectatins, by installing mre slar pwer than the experts frecast, culd require an increase in the annual expenditures n slar pwer. Fr cmparisn, if slar pwer prices were t hld steady, then the same expansin f slar pwer wuld cst far mre. The ttal expenditures required

8 8 <- Technical Summary f Expert Discussin - 19 Octber 2012 thrugh 2018, fr example, wuld be rughly 50% higher, adding up t several hundred billin f dllars. Near Zer s survey shwed sme difference in the utlk amng experts. Thse frm universities were smewhat less ptimistic, expecting that prices wuld fall but nt as fast as the lng-term trend, while thse with industry experience expected prices t cntinue alng the path they have fllwed since the early 1980s. In cmparisn, the U.S. Department f Energy s SunSht Prgram which, frm 2011 t 2016, will spend $112 millin n research and develpment f advanced slar phtvltaic-related manufacturing prcesses has a gal f bringing slar mdule prices dwn t $1 per watt by 2016 and t $0.50 per watt by These gals imply reductins in price that are smewhat mre ptimistic than bth the results f Near Zer s expert elicitatin and the lng-term trend since 1980 (Fig. 2). SunSht has als set a gal fr reducing the price f entire slar pwer systems, which include many ther expenses besides slar mdules, including steel frames, labr expenses fr installatin, and mre. (As described in the glssary, these ther parts f a slar system are knwn as balance f systems, r BOS.) SunSht s gal is t get the price fr whle systems dwn t $2.20 per watt by 2016, and $1 per watt by Near Zer s survey suggests these gals are quite ambitius, but may be pssible t reach, with the chance f success arund 50%. The New Dminance f Balance f System > Even if slar mdule prices cntinue t fall, there will still need t be a cncerted effrt t ensure that the ther parts f a slar pwer system the balance f systems, r BOS als cntinue t get cheaper as well. The expenses fr BOS can include metal frames, cncrete pads, labr fr installatin, and inverters that cnvert the slar panels DC electricity int AC electricity suitable fr appliances r transmissin thrugh the electric grid. The Intergvernmental Panel n Climate Change has dcumented that slar system prices have fallen ver the past several years, shwing that bth mdules and BOS have becme cheaper as the industry has grwn. 6 In Near Zer s survey, the experts expected prices fr BOS wuld be able t fall at least as rapidly as prices fr mdules. They estimated that when the industry reaches 300 GW f all-time prductin, BOS wuld make up 55% f the price f a slar pwer system. Befre the rapid price drp f 2010 and 2011, BOS accunted fr abut 45 t 50% f the price f a slar system. 7 Hwever, with prices fr mdules drpping rapidly in recent years, nw BOS makes up abut 60 t 65% f the price f a slar system. 8 The results f Near Zer s survey suggests that BOS prices are likely t cntinue t fall at rughly the same pace as slar mdule prices, with bth cntributing t making slar systems cheaper. The situatin tday, with BOS expenses making up mre than half the price f a whle slar sys- 6> Intergvernmental Panel n Climate Change, Special Reprt n Renewable Energy Surces and Climate Change Mitigatin (2012). 7> Bny, L. et al, Achieving Lw-Cst Slar PV, Rcky Muntain Institute (2010). 8> Slarbuzz, Retail Price Summary - March 2012 Update at

9 9 <- Technical Summary f Expert Discussin - 19 Octber 2012 tem, is a histric reversal frm the situatin that had prevailed thrugh the whle histry f the slar industry. Accrding t Near Zer s survey, even thugh BOS prices will likely drp ver the cming decade, nnetheless they will cntinue t make up mre than half the price f a whle slar system. Because f this new dminance f BOS expenses, mst experts believe research and develpment shuld fcus increasingly n ways f bringing dwn BOS prices, Near Zer s elicitatin fund. Yet mst experts supprted the SunSht Prject s emphasis n research n new phtvltaic materials. This wrk culd lead t mre efficient slar mdules, able t harness a greater share f the sunlight hitting them and prduce mre watts per square ft. In this way, mre efficient mdules wuld indirectly reduce the utlay fr BOS, accrding t Near Zer s elicitatin. Mre efficient mdules wuld indirectly reduce the utlay fr BOS, accrding t Near Zer s elicitatin. Imprving efficiency is a very imprtant driver t reduce balance f system [prices], explained Dug Rse, Vice President f Technlgy Strategy at SunPwer Crp. Nathan Lewis f Caltech added, lwer efficiency means mre area needs t be cvered with supprt structures t prduce the same pwer utput and that translates int higher spending n steel, labr, and ther requirements. On the ther hand, research that bsts the efficiency f slar panels wuld lwer the expense f BOS. Watt fr watt, mre efficient panels mean smaller panels and that means less expense fr BOS. Efficiency is at a premium, Lewis added. Research can als help bring dwn BOS prices directly and research int BOS shuld be the next-highest pririty after phtvltaic-active materials, mst f the experts agreed. SunSht likewise places a heavy emphasis n reducing BOS prices, with a gal f seeing prices fr slar panels and BOS fall equally fast, each drpping abut three-quarters by If BOS prices remained at tday s rate mre than $1.50 per watt then it wuld be impssible t meet SunSht s gal fr a price n entire slar systems f nly $1 per watt. Near Zer s results suggest that SunSht s gal is fairly ambitius, but achievable. The prject s gals invlve cutting the price f bth slar mdule and BOS at abut the same rate, a cut f abut threequarters frm 2010 t Over the past 20 years, it appears BOS prices have nt fallen as fast as slar mdule prices. But Near Zer s results shw that experts expect BOS prices t fall rapidly in the next decade, perhaps as quickly as prices fr slar mdules. Hwever, a cmplicating factr is that BOS prices are highly reginal, depending n factrs such as lcal labr csts, and the experience and efficiency f the lcal slar installatin industry. As Dug Rse f SunPwer Crpratin said, much f the prgress in csts [in a regin] must cme frm the build-up f infrastructure and knwledge (f installers, utilities, permitting bdies, and custmers) frm installatin in that regin. Such prgress in Germany, fr example, has brught dwn the price f whle slar systems, but nt all cuntries have had this success.

10 10 <- Technical Summary f Expert Discussin - 19 Octber 2012 Fr these reasns, the experts agreed that t make slar pwer cheaper, a majr pririty shuld be effrts t bring dwn BOS prices. One apprach is t imprve mdules efficiency, s that they take up less space and s require less materials and labr fr the rest f the system. But there are ther, equally imprtant ways f reducing the BOS prices, accrding t Near Zer s elicitatin. When asked t rank the best ptins fr reducing BOS prices, the experts agreed that tw additinal means f reducing BOS prices wuld be especially effective: But since such a curve nly shws mdule prices, it ignres BOS prices. This, in turn, culd give the impressin that slar system prices are drpping faster than they are, r that thin-film technlgies are mre cmpetitive than they actually are. Accrding t Near Zer s elicitatin, a better way f capturing the prgress in the slar industry wuld be t fcus n price per watt fr whle slar systems, r the levelized price f electricity prduced by slar systems bth metrics that factr in the BOS prices. Wrk n standardizing the installatin f slar PV systems, t make installatins faster, requiring less labr and custmizatin. Remving administrative barriers, including paperwrk required fr installatin permits. Misleading Metrics > The results f Near Zer s survey als suggest that benchmarks that leave ut the BOS prices are misleading increasingly s in recent years. In studies f the slar industry including by the Department f Energy, the Eurpean Phtvltaic Industry Assciatin, and the IPCC it has been cmmn t display a learning curve, shwing hw slar mdule prices have drpped as the industry has grwn ver the past fur decades. Likewise, ften the learning curve mixes tgether bth traditinal slar panels and newer thinfilm panels (as in Fig 1 in this summary), r the graphs shw tw learning curves side-by-side fr each f the tw slar mdule technlgies.

11 11 <- Technical Summary f Expert Discussin - 19 Octber 2012 Table 1 Level f Participatin Key Participated in the Discussin Participated in Elicitatin 1 Participated in Elicitatin 2 Table 1. List f experts wh participated in the Near Zer survey. A ttal f 21 experts participated in this elicitatin. Seven were a part f a discussin in summer 2011, and 16 participated in a quantitative elicitatin in In a fllwup elicitatin in 2012, 13 experts participated. Jay Apt Carnegie Melln University Martin Green University f New Suth Wales Steven Hamburg Envirnmental Defense Fund Steven Hegedus University f Delaware Max Henrin Lumina Decisin Systems Martin Hffert New Yrk University David Keith Harvard University Page Kyle Pacific Nrthwest Natinal Labratry Nate Lewis Califrnia Institute f Technlgy Rbert Marglis Natinal Renewable Energy Labratry Paul Maycck PV Energy Systems, Inc Danielle Merfeld GE Glbal Research Juan Mren-Cruz Gergia Institute f Technlgy Gregry Nemet University f Wiscnsin, Madisn Bruce Parkinsn University f Wyming Dug Rse SunPwer Crpratin Sean Shaheen University f Denver Daniel Taric Viasl Energy Thmas Utrup Slar Pwer Industries David G. Victr University f Califrnia, San Dieg Ryan Wiser Lawrence Berkeley Natinal Labratry

12 12 <- Technical Summary f Expert Discussin - 19 Octber 2012 Appendix 1. List f questins asked, and detailed respnses: Questins n slar mdule prices > In the initial elicitatin, in which 16 experts replied, experts were asked a series f questins abut their expectatins fr slar mdule prices in the future: What is the lwest average price 9 yu can imagine fr slar PV mdules at 300 GW [gigawatts] f cumulative deplyment? What is the greatest average price yu can imagine fr slar PV mdules at 300 GW f cumulative deplyment? What is the prbability that the average price fr slar PV mdules at 300 GW f cumulative deplyment will be less than X? [X, and belw Y and Z, were intermediate prices between the lwest and greatest prices that each expert gave in reply t questins #1 and #2.] What is the prbability that the average price fr slar PV mdules at 300 GW f cumulative deplyment will be less than Y? What is the prbability that the average price fr slar PV mdules at 300 GW f cumulative deplyment will be less than Z? In the secnd elicitatin in summer 2012, Near Zer asked the same questins, but fr prices at 600 GW f cumulative deplyment, and 13 experts replied. Figure A1: Expected prices fr slar PV mdules, at the pints when the wrld has reached 300 GW r 600 GW f cumulative deplyment. Experts were asked t give a range f answers, t reflect their uncertainty abut what prices may be in the future. Given the experts answers t all five questins, the mst likely expected price at 300 GW was $0.77/W, and at 600 GW was $0.67/W. In the graph, the median answer fr each questin is indicated by the red bar the slid bx represents the middle 50% f experts answers, and the uter bars represent the maximum and minimum answers received fr each questin. The mst likely prices were cmputed using the experts answers t all f the questins abve. 9> By average price we intend the mean sale price f PV mdules t the prject develper r end user at the pint in time when the specified cumulative (glbal) capacity threshld is achieved irrespective f specific technlgy. We ask price and nt cst because price data is mre available and ties these questins back t the Nte by Keith and Mren-Cruz. Price requested is fr mdules nly, excluding balance f system price. Price expressed in dllars per watt-peak ($/W p )

13 13 <- Technical Summary f Expert Discussin - 19 Octber 2012 The tw elicitatins had partially verlapping sets f experts (16 experts in the first rund, 13 experts in the secnd rund, with 8 wh participated in bth). The results fr all experts are shwn in Figure A1; the results fr each rund are nt significantly different when limited t just the 8 experts wh participated in bth runds. Experts were als asked abut their expectatin fr the learning rate that is, the rate at which slar mdule prices will fall, as the ttal amunt prduced increases ver time. Over the past few decades, the price has fallen at rughly a 20% learning rate, which means that each time the cumulative prductin dubles (say, frm 10 GW t 20 GW), then the price falls by 20%. Questin: What d yu think the learning rate f slar PV mdules will be between the present and 300 GW cumulative deplyment? (Answers expressed learning rate as a percentage.) Figure A2: The median expectatin fr the learning rate was 16% (marked by the red bx), smewhat lwer than the learning rate has been histrically. The clred bx represents the middle 50% f experts, and the uter bars represent the highest and lwest answers t this questin. The answers t this questin were smewhat lwer than the implied learn ing rate, given the experts expectatins fr slar mdule prices (see Fig 2 in the main text), which was cnsistent with a learning rate f 20% r higher. Questins n balance-f-systems (BOS): At 300 GW cumulative deplyed capacity, what fractin f the ttal turnkey cst 10 f a new 100 MW PV installatin (i.e. utility scale) d yu think will be nn-mdule csts? (answers range frm 0.0 t 1.0) 10> By this we mean all csts and expenditures that must be cvered befre a prduct is ready t be sld and used, including direct csts, like materials, als indirect csts including administrative expenses and prduct engineering.

14 14 <- Technical Summary f Expert Discussin - 19 Octber 2012 Figure A4: T reduce BOS prices, experts said the mst imprtant issues are: standardizing installatin, remving administrative barriers, and increasing mdule efficiency. Figure A3: Experts expected that BOS wuld make up a similar amunt f ttal system cst in the future as it des tday. Please rank the fllwing means f reducing ttal balance-f-systems csts f utility-scale PV installatins. (rank frm highest pririty t lwest pririty) Chices: increase mdule efficiency imprve electrnics imprve structural cmpnents Questins n budget allcatins: Hw wuld yu allcate the DOE SunSht budget t minimize the installed cst f slar PV in 2020? (The budget was shwn divided int five categries PV active materials, Area-related BOS, Pwer-related BOS, Manufacturing, and Human Experience each f which was subdivided int smaller categries. The experts were able t click and drag n bxes representing the budget fr each categry, t shw hw they wuld chse t allcate the budget.) create training prgrams fr installers and servicers standardize installatin practices and hardware remve administrative barriers simplify grid-cnnectins net-metering

15 15 <- Technical Summary f Expert Discussin - 19 Octber 2012 Figure A5: Experts ranked PV active materials as the highest pririty fr research funding, in particular funding fr materials ther than silicn. Als highly ranked were effrts t reduce BOS prices, including inverters and effrts tward integrating slar systems with buildings. The gvernment puts yu in charge f a $100m fund. Yur sle gal is t minimize the installed cst f PV by Where d yu spend it? (The experts chse the fractin that ges t RD&D research, develpment, and deplyment with the remainder ging t deplyment incentives.)

16 16 <- Technical Summary f Expert Discussin - 19 Octber 2012 Figure A6: In rder t reduce the cst f slar pwer by 2020, experts chse t put mst f a hypthetical $100 millin fund tward RD&D as ppsed t deplyment incentives. Hw wuld yu allcate gvernment RD&D funding t minimize the installed cst f slar PV in 2020? (The budget was divided int three types f funding: basic, applied, and manufacturing. Each f these in turn was divided int three types: academic, natinal labs, and industry, giving a ttal f nine categries fr which the experts culd adjust the budget.) Figure A7: Experts divided a hypthetical $100 millin fund int each f 9 categries. The preference was fr industry t receive mre f the funding fr manufacturing wrk, academic labs t receive mre f the funding fr basic research, and fr natinal labs and industry t share in applied research. The DOE s SunSht Prgram aims t reduce PV system prices t $1.00 per watt by 2020, which assumes $0.40 per watt fr the mdule and $0.60 per watt BOS. Hw likely is it that the mdule price target f $0.40 watt will be achieved? (prbability between 0.0 and 1.0) Hw likely is it that the balance-f-systems price target f $0.60 per watt will be achieved? (Frm 0% likelihd t 100% likelihd) 11 11> This is hw the questin was asked in the survey, but the numbers were nt crrect. The actual SunSht targets are $0.50 per watt fr mdules and $0.50 per watt fr BOS. Nnetheless, the experts answers indicated that targets in this range wuld pssible, albeit difficult t achieve.

17 17 <- Technical Summary f Expert Discussin - 19 Octber 2012 Figure A8: Experts were asked hw likely specific prices wuld be in Questin n expected grwth f installed slar systems: In what year d yu anticipate 300 GW f slar PV capacity will have been deplyed? Figure A9: Experts frecast, n average, that it wuld take until 2018 t reach 300 GW f cumulative slar deplyment, and until 2025 t reach 600 GW. The clred bx represents the middle 50% f answers t each questin, and the uter bars represent the highest and lwest answers. Experts were asked t agree r disagree with several statements. They were asked: Review each statement and indicate whether yu generally agree r disagree with it. : The very rapid drp in [mdule] prices frm 2008 t 2011 is unlikely t cntinue. Respnse: 12 f 13 experts agreed. Current levels f spending n slar PV R&D are sufficient t maintain a mdule learning rate f 19% ver the next tw dublings f PV capacity (i.e., t ~300 GW)? Respnse: 5 f 13 experts agreed.

18 18 <- Technical Summary f Expert Discussin - 19 Octber 2012 Reducing BOS csts shuld be the tp pririty in making PV electricity mre ecnmically cmpetitive. Respnse: 8 f 13 experts agreed. Glbal BOS csts have nt decreased much in the past tw decades. Respnse: 4 f 13 experts agreed.