The solar balance-of-system and racking sector is under intense pressure to reduce costs -- but it won't be easy, according to key industry players in attendance at GTM’s recent Solar Summit.
Cutting racking costs will be like bleeding a stone, Unirac director of marketing Marcelo Gomez said. One key is incorporating electrical components. By simply including wiring clips into its newest racks, Gomez said, the company trimmed costs by 5 percent to 10 percent and passed those savings on to its installer partners. A new Unirac slip sheet created in partnership with Firestone reduced pad costs by 80 percent, he added.
The industry’s gradual move to more expensive module-level power electronics (MLPE) would seem likely to make solar more costly, acknowledged SolarBridge Technologies marketing VP Craig Lawrence. But an AC module with a built-in microinverter can decrease BOS costs in two unexpected ways.
First, it can cut the cost of customer acquisition, Lawrence said. Currently, customer acquisition is the biggest cost category after modules.
Second, incorporating the power electronics into the module allows installers to sell to customers with non-standard roofs or shading issues. That increases installers’ customer volume and kilowatts sold.
“But the best way to reduce BOS costs is to eliminate them,” Lawrence said. SolarBridge’s “true AC module” eliminates up to 30 percent of an installer’s on-the-roof labor because most of the electronics are pre-assembled and pre-integrated at the factory. “What would you rather pay for -- $14-per-hour factory labor or labor up on the roof at $40 per hour?”
SolarEdge’s DC optimizer strategy places a part of the power electronics at the module level and therefore provides many of the same efficiencies, according to Dru Sutton, technical marketing manager for the firm. SolarEdge has also been conducting filmed time-motion studies to identify other processes in which installation time could be reduced.
The studies show the DC optimizer solution sharply cuts installation time compared to the time needed to install multiple string inverters. But by keeping an inverter as a part of its system, SolarEdge is likely to encounter fewer questions about its products' reliability and bankability.
The key BOS concern of a big-volume installer relates to the unknowns that can arise as part of operating expenses, according to Josh Weiner, director of engineering for NRG Residential Solar Solutions. NRG recently bought Roof Diagnostics, formed a partnership with Comcast, and announced it was going after SolarCity, the third-party-ownership market leader.
Capex costs are straightforward, but opex costs are unpredictable, Weiner explained. “I’m a big proponent of reducing part count. But what I really like to hear is product people talking about their strongest reliability, their bankability report and certification and performance testing, and their warranty. Those mitigate my risk as project owner for the next twenty years.”
MLPE are exciting, he added, “But with any new product, there is going to be risk.”
But major module manufacturers have vetted MLPE and found the technology to be bankable, according to both Lawrence and Sutton. “And string inverter technology’s track record has not been great,” Lawrence added. “We’ve learned from that.”
Unirac is also performing time-motion studies “on every installation step,” Gomez said. The goal is to provide its EPC partners with accurate installation cost estimates. “That allows our partners to win bids and live up to the promises they make to consumers.”
During the Solar Summit panel, moderator MJ Shiao, GTM's Solar Research Director, asked NRG's Josh Weiner whether the recent 15 percent to 20 percent reductions in racking and electronics costs have compounded concerns about reliability.
“Yes,” he unhesitatingly replied. “Our interests are strategically aligned with [those of] the homeowner.” That is why NRG Solar’s engineering team does its own product due diligence. “It is always the stuff you don’t expect that fails, but if I had to put my finger on one thing, there are a lot of installation quality issues,” Weiner said. “Roof leaks are always a concern. Even with the best product, you can install it incorrectly.”
The more work done at the factory, the better, he said. “One less thing off the roof is one less thing to manage in the warehouse, deliver, purchase, and sell.”
“It is great to hear that the end customer values productizing,” Lawrence said. “The AC module is the ultimate plug-and-play device.” All the electrical is done at the factory, so “the rest is difficult to screw up.” MLPE allow projects to come on-line more quickly, because module-level failures can be quickly identified and fixed. The technology also increases safety, which adds to reliability, Sutton added. And both create savings for end users like NRG. “The projected lifetime average annual failure rate of the AC module is 0.15 percent, validated by multiple third parties,” Lawrence said.
“Racking is typically the last thing thought of, but the first thing to go in,” Gomez said. There are low-cost racking companies with questionable reputations that are selling products which probably won't last 25 years, he added. In contrast, Unirac’s long history of reliability offers another unexpected cost reduction: When jurisdictional authorities see the Unirac name, they often approve the system based on the firm's reputation alone. “That cuts permitting costs.”
Here's a video of the panel from GTM's recent Solar Summit: