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I work in solar, and this is fantastic news...for SolarCity. There's expected to be a solar panel shortage coming soon because the industry is growing so fast[1

by diafygi 11y ago

I work in solar, and this is fantastic news...for SolarCity. There's expected to be a solar panel shortage coming soon because the industry is growing so fast[1], so if you don't make your own panels, you can expect panel prices to go up. The fact that SolarCity can make its own modules, means it won't be affected by the shortage nearly as much as others. Anyway, just to give some perspective, solar panel cost accounts for ~20% of the overall installed cost in the U.S.[2]. So reducing panel prices by this incremental cost doesn't impact the overall cost as much as you'd think. However, every little bit helps, and this definitely keeps the industry on track to meet the Department of Energy's goal of $0.06/kWh by 2020[3]. There's a lot of other players that are focused on driving down other parts of installed costs (soft costs are a huge part, for example), and we're really seeing all these efforts pay off in exponential adoption of solar. [1]: https://www.greentechmedia.com/articles/read/Will-There-Be-a-PV-Module-Supply-Shortage-By-the-End-of-2015 https://www.greentechmedia.com/articles/read/Will-There-Be-a... [2]: http://energy.gov/eere/sunshot/soft-costs http://energy.gov/eere/sunshot/soft-costs [3]: http://energy.gov/eere/sunshot/about http://energy.gov/eere/sunshot/about P.S. Obligatory "we're hiring". If you know python, the solar industry is tons of fun!

Retric 11y ago
20% of Rooftop solar costs, grid connected solar has far lower overhead.
- diafygi 11y ago
  Yep, sorry, SolarCity is mostly residential and commercial, so the cost breakdown is based on their sector.
discardorama 11y ago
> solar panel cost accounts for ~20% of the overall installed cost in the U.S.[2]. So reducing panel prices by this incremental cost doesn't impact the overall cost as much as you'd think. So where does the other 80% of the cost come from? Maybe we should be figuring out how to cut that instead.
- diafygi 11y ago
  There's a nice pretty chart on the DOE's soft costs website. http://energy.gov/eere/sunshot/reducing-non-hardware-costs http://energy.gov/eere/sunshot/reducing-non-hardware-costs It's from 2010, so stuff has shifted since then, but ~50% soft costs, 15% installation labor, 15% non-module hardware, and 20% module. The DOE's really been focused on soft costs (customer acquisition, overhead, engineering, financing, etc.). We recently got a big grant to drive down the cost of getting a customer's bill/usage history for the initial quote, which can impact the overall cost by 5-10%.
  - pkaye 11y ago
    Wow these soft costs seem so huge. I was hoping technological innovation would bring down the overall cost of solar but now it looks like that accounts for only 1/3 of the costs. I hope the soft costs can be brought down significantly over time.
    - drited 11y ago
      There is scope for optimism as the Germans are much more efficient on soft costs. Several studies have looked at why the gulf exists between U.S and German costs so people are focused on narrowing the gap. I think it'll happen, maybe from late 2016 when the industry gets super competitive for business as demand drops due to the Itc expiry.
    - brianwawok 11y ago
      It should come down with time, no? I can look in my phonebook and find 500 people to install new electrical wire in my house. I doubt I can find that many people that know how to install solar.. but given a few years, it could/should eventually become fairly common knowledge.
  - discardorama 11y ago
    There's something wrong when "customer acquisition" is your biggest expense....
savanaly 11y ago
>There's expected to be a solar panel shortage coming soon because the industry is growing so fast[1], so if you don't make your own panels, you can expect panel prices to go up. The fact that SolarCity can make its own modules, means it won't be affected by the shortage nearly as much as others. Why not? Even if you make your own solar panels, you still face an opportunity cost if you use them yourself instead of selling them, and that opportunity cost is identical to the regular old cost everyone else has to pay. So while it would benefit you if you happen to be making them when the price spikes, it wouldn't make you immune to the shortage I wouldn't think.
- pjc50 11y ago
  "Opportunity cost" is not a thing that affects operational cashflow, and doesn't appear in SEC filings, whereas delays in project completion do.
ExpiredLink 11y ago
> There's expected to be a solar panel shortage coming soon because the industry is growing so fast The Chines companies haven't caused panel shortage in the past. Quite the contrary. They ruined many producers in Europe with their dumping prices.

by diafygi 11y ago

Retric 11y ago

20% of Rooftop solar costs, grid connected solar has far lower overhead.

diafygi 11y ago
Yep, sorry, SolarCity is mostly residential and commercial, so the cost breakdown is based on their sector.

discardorama 11y ago

> solar panel cost accounts for ~20% of the overall installed cost in the U.S.[2]. So reducing panel prices by this incremental cost doesn't impact the overall cost as much as you'd think. So where does the other 80% of the cost come from? Maybe we should be figuring out how to cut that instead.

diafygi 11y ago
There's a nice pretty chart on the DOE's soft costs website. http://energy.gov/eere/sunshot/reducing-non-hardware-costs http://energy.gov/eere/sunshot/reducing-non-hardware-costs It's from 2010, so stuff has shifted since then, but ~50% soft costs, 15% installation labor, 15% non-module hardware, and 20% module. The DOE's really been focused on soft costs (customer acquisition, overhead, engineering, financing, etc.). We recently got a big grant to drive down the cost of getting a customer's bill/usage history for the initial quote, which can impact the overall cost by 5-10%.
- pkaye 11y ago
  Wow these soft costs seem so huge. I was hoping technological innovation would bring down the overall cost of solar but now it looks like that accounts for only 1/3 of the costs. I hope the soft costs can be brought down significantly over time.
  - drited 11y ago
    There is scope for optimism as the Germans are much more efficient on soft costs. Several studies have looked at why the gulf exists between U.S and German costs so people are focused on narrowing the gap. I think it'll happen, maybe from late 2016 when the industry gets super competitive for business as demand drops due to the Itc expiry.
  - brianwawok 11y ago
    It should come down with time, no? I can look in my phonebook and find 500 people to install new electrical wire in my house. I doubt I can find that many people that know how to install solar.. but given a few years, it could/should eventually become fairly common knowledge.
- discardorama 11y ago
  There's something wrong when "customer acquisition" is your biggest expense....

savanaly 11y ago

>There's expected to be a solar panel shortage coming soon because the industry is growing so fast[1], so if you don't make your own panels, you can expect panel prices to go up. The fact that SolarCity can make its own modules, means it won't be affected by the shortage nearly as much as others. Why not? Even if you make your own solar panels, you still face an opportunity cost if you use them yourself instead of selling them, and that opportunity cost is identical to the regular old cost everyone else has to pay. So while it would benefit you if you happen to be making them when the price spikes, it wouldn't make you immune to the shortage I wouldn't think.

pjc50 11y ago
"Opportunity cost" is not a thing that affects operational cashflow, and doesn't appear in SEC filings, whereas delays in project completion do.

ExpiredLink 11y ago

> There's expected to be a solar panel shortage coming soon because the industry is growing so fast The Chines companies haven't caused panel shortage in the past. Quite the contrary. They ruined many producers in Europe with their dumping prices.