Introducing engineering
Introducing engineering

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5.12 Economics and implementation

The quantity 'euros per watt in peak sunshine (€ Wp −1 )' is a measure of the price of a module in euros divided by the number of watts it will produce in peak sunshine. It is useful for comparing the price of different module types and shows long term trends. The € Wp −1 prices of PV modules have fallen dramatically as the market has increased over the past three decades or so, as shown in Figure 100.

Described image
Figure 100 The price of PV technology in euros per watt peak € Wp −1

The price of a PV module is only part of the cost of a complete system. Total costs break down into three main areas: the cost of the PV modules; the cost of the support structure; and the cost of installation. In northern Europe, systems are most commonly installed on building roofs or south-facing walls, so I'm not going to consider cost and availability of land in the economic argument.

Support structure costs are a particular problem for retrofitted units, where the system cost is, say, added to that of the roof. For new buildings and renovation, the cost of architecturally integrated PV-cladding and PV-roofing units can be integrated into the cost of the standard cladding or roofing.

Installation costs are high for two reasons. First, installation is a specialist electrical task involving a d.c. power system. Second, the installations are individually tailored to each site.

Schemes are available for PV mortgages on better terms than standard unsecured loans. These spread the capital costs over several years, and although this does not as yet make them truly viable, it can make them affordable.

With grid-connected systems the price one gets for exporting PV generated electricity to the grid is currently substantially higher than the price for consumed power. One argument in favour of this approach is that to make 1 kW h of electrical energy from a thermal source such as a fossil fuel power station takes 3 kW h of thermal energy. This means that 1 PV kW h is 'worth' 3 thermal kW h. Other arguments are that embedded generation is useful to a power grid, in order to maintain supply at weak points in the system. Added value can also accrue from avoiding the losses involved in power transmission.

Germany and the UK have good subsidy rates, and other countries are following suit. But ironically, where other factors are at play, such as poor supervisory systems, these can sometimes be too high. Subsidies of 90% in India resulted in a large number of installations, but when these were audited it was found that three times as many systems had been sold as were actually in place! The reason was that systems were resold over the border in Nepal at cheap prices that still raised a profit.

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