What scope is there for price reductions in photovoltaic inverter costs?

Question

In almost all of the world (except the USA, which has specific local cost challenges), system photovoltaic (PV) costs have come down a lot, to about €2 per installed watt. A large part of the reduction in system costs has come about through Swanson's Law, which is the Moore's Law of PV modules: module prices reduce by 20% for each doubling of shipped capacity. PV module costs continue to come down, and that puts more pressure on the balance-of-system costs (everything else that goes into the system) - inverters, wiring, support structures, labour costs, compliance costs and business overheads.

Inverter costs are now a large part of non-module costs - around €0.50 per continuous Watt.

I sounded out an academic expert in the field, who said he thought inverters could still halve in price from here.

So, my question is, what will it take to get inverter prices down from here?

Specific elements of this question that might help clarify an anwer, would include things like: how much prices come down, for each doubling of installed capacity; and whether the PV market (about 40GW this year) is a large proportion of the inverter market, where individual inverters are in the range of a few kilowatts to megawatts continuous?

Answer 1

Demand.

Inverters are mostly wire wrapped transformer and electronics. Electronics typically have enormous up front costs to set up the plant, and fairly cheap costs per unit.

A good example of this can be found by tracking the per chip cost of memory. For a given technology, the price will start high, and as more factories come on line, it drops, then as the next level of tech comes on line, the old tech will rise again.

I would expect that inverters will follow a similar path, possibly not following it quite as hard due to the transformer costs. (Transformers are very well established technology)

That said, some of the design efficiencies will take longer to establish.

A: Houses purpose built with room for 3-10 kW of solar cells, so that installation is trivial.

B: Standardization of mounting systems so that houses are built with standard mounting points, and conduit for wires in place.

C: Code reform that all new housing must have power isolation built in. This is MUCH cheaper to put in when the service is installed rather than as a retrofit.

D: Standards for communication so that inverters can be mixed and matched at will.

These factors alone could cut the installation costs of PV substantially.

One change we are already seeing is the modularization of inverters. The inverter is sized to handle some small number of panels. So you may put up 12 panels and have 4 inverters. They have a single lead that keeps them all in sync. This makes it easy to replace one that goes bad.

The next big drop will be the permission to do it yourself with a single electrical inspection. PV isn't rocket science. Anyone who is comfortable wiring their bathroom should be able to do it. Not covered in the how-to books, nor the Alberta Electrical Code Simplified just yet.