We have already discussed all key trends such as bifacial modules, floating solar and the photovoltaic recycling challenge. However, have you ever wondered what the average cost of a solar farm is in your country? And worldwide? What costs represent the higher percentage in your accounts and, more importantly, how could we decrease these costs.

Well, lets begin examining an impressive research paper carried out by IRENA on renewable power generation costs. According to IRENA, the country average for the total installed costs of utility scale solar PV in the studied countries ranged from a low of USD 618/kW in India to a high of USD 2,117/kW in the Russian Federation in 2019. Comparing them, the highest solar farm cost average was about x3.5 more than the lowest, despite the convergence of installed costs in major markets in recent years. The average total installed costs was USD 1191.5/kW.

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Types of costs on a solar plant

The balance of system (BoS) costs can be broken down into three broad categories: non-module and inverter hardware, installation costs, and soft costs. These three categories can be broken down in more detailed sub-categories.

Non-module hardware costs

Cabling

Racking and mounting

Safety and security

Grid connection

Monitoring and control

Installation costs

Mechanical installation (construction)

Electrical installation

Inspection (construction supervision)

Operations and maintenance (OM costs)

Operations and maintenance, usually found as O&M, costs includes all the expenditure categories since the beginning of PV plant operations. Examples of them are PV module cleaning, monitoring or on-site inspections.

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Soft costs

Incentive application

Permitting

System design

Customer acquisition

Financing costs

Margin

We know that costs for electricity generated from new solar PV farms has fallen 82% since 2010. The levelized cost of energy generated by large scale solar plants is around USD 0.068/kWh, compared to USD $0.378 ten years ago. However, what is interesting to see is that these cost reductions were led by hardware components, with modules and inverters accounting for 62% of the global weighted-average total installed cost decline between 2010 and 2019.

Balance of systems costs costs are therefore an important contributor to the declining global weighted-average total installed costs, with 13% of the global reduction coming from lower installation costs, 7% from racking, 3% from other BoS hardware (e.g., cables, junction boxes, etc.) and 15% from a range of smaller categories.

Taking a closer look at the data obtained from IRENA, we can draw the next indicators:

Allocate your costs efficiently: a real case study

Atacama solar plant project. Source: RatedPower

Feel free to use our spreadsheet as a template and play around with the different items that form a solar farm: modules, inverters, power stations, trenches, manholes, roads, different types of cables and even miscellaneous things such as surveillance cameras.

Using data, planning and embracing technology are key to decreasing costs

Solar has been the renewable energy with the greatest cost reduction of the last decade. The reasons for this can be summarized mainly in: competitive pressures, greater installer experience, the spread of best practice installation and soft costs, module efficiency improvements and digitalization.

Nevertheless, although these reasons explain the reduction of costs until now, if the curve is to keep its path downward, investing in digitalization and AI technologies is a must.

It is clear that costs may vary vastly depending on your location and the conditions of the plant. However, what we must prioritize is always providing the most accurate preliminary design based on known historical data, to properly plan the project ahead and avoid unexpected costs.

How can we do that?

Technology.

Did you know that recent study by Inderwildi et al. (2020), estimates that digitalisation has the potential to increase carbon abatement by 20%?

Let us introduce RatedPower, a solar modeling tool, that will allow you to perform different simulations to thoroughly analyze the feasibility of different projects, locations and equipment, while optimizing the layout of your solar photovoltaic projects and then obtaining +300 pages of documentation for planning and financial analysis. Watch our introductory video for further information and don’t hesitate to contact us!