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The True Costs of Solar PV:
IRENA’s Cost Analysis
EU PVSEC Amsterdam, 25 September 2014
Michael [email protected]
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A dynamic market
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The energy sector is being
Transformed….
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A virtuous cycle is unlocking the economic, social and environmental
benefits of renewables
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Recent cost trends
Rapidly declining solar PV module prices…..
…..and installed costs
Source: IRENA Renewable Cost Database, BNEF and Global Data
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Solar resources, deployment
and IRENA membership
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Moving beyond narrow markets
Accelerating PV deployment
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THE ABSENCE OF UP-TO-DATE
COST DATA IS A BARRIERIRENA IS RAMPING UP ITS WORK
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Renewables are
increasingly competitive!
IRENA’s analysis of 9000
utility-scale projects and
200k small-scale solar PV
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Solar PV costs: Current work
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• IRENA Renewable Costing Alliance
• Accelerating cost reductions in new markets in Africa
• IRENA’s Solar PV Parity Indicators
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Works at technical level
Pool, confidentially, data
Entirely voluntary, no fees
Low overheads
IRENA Renewable Costing Alliance
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Accelerating PV
cost reductions in Africa
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• Joint project with GIZ/BMZ
• Focus on collecting up-to-date data on current costs for utility-scale, mini-grids and SHS
• What do “competitive” costs look like in Africa?
• What are the barriers to achieving these levels in new markets in Africa?
• How do we get there? What facilitating policies are needed?
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Why Africa?
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Utility-scale
solar PV costs in Africa
12Source: IRENA Renewable Cost Database and Global Data, 2014
Operating or under construction in 8 African countries
With a further 6.5 GW either permitting or financed
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Off-grid PV costs in Africa
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Off-grid solar home systems
example Uganda
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Size (kW) Battery Cost
(USD/kW)
0.3 2 x 12V/ 100 Ah 1731
1 2 x 12 V / 150 Ah 2692
1.5 2 x 12 V / 230 Ah 3269
3 8 x 6 V / 220 Ah 6154
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Timeline
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• Data collection till December 2014
• Analysis and cost reduction identification till Jan 2015
• Drafting of results and handbook Feb-Apr 2015
• Publication June 2015
• Can you help us make the analysis better?
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IRENA’S
PV PARITY INDICATORS
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PV Parity Indicators
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• Tracks quarterly competiveness
• Indicators, not actual costs
• Target audience are policy makers and thought leaders
• Start with North America
• Can lead to more detailed analysis
• Supports other IRENA activities
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Methodology
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• Simple metrics
• LCOE vs Effective Electricity Rate/Value• Require detailed assumptions & analysis
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19Recent module price reductions make solar PV competitive
Residential PV Parity: A nuanced story
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Residential PV Parity: San Francisco
Minimum effective electricity rate
Maximum effective electricity rate
Average California electricity rate (EIA)
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Installed cost variation by city
Consistently wide variation in installed costs, why?
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Transparent data
Simple methodology
Timely and policy relevant information
IRENA’s PV cost analysis
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IRENA’s PV Cost Analysis
23Bringing Our Future Forward