Why is Solar Twice Cheaper in Germany than in the US

Why is Solar Twice Cheaper in Germany than in the US

A new study by the Lawrence Berkeley National Laboratory is designed to investigate why solar in sunny parts of the United States is twice the price than in cloudy Germany. The focus of the study made by Joachim Seel was on photovoltaic systems less than 10 kW that are on households which are owned by

A new study by the Lawrence Berkeley National Laboratory is designed to investigate why solar in sunny parts of the United States is twice the price than in cloudy Germany.

The focus of the study made by Joachim Seel was on photovoltaic systems less than 10 kW that are on households which are owned by households which is common practice in Germany, but not in the US where a third party is often the owner of the system.

The study found that the main difference in the “soft” costs, not included in the price components as Germany uses approximately the same proportion of cheaper modules from Asia and the US. The study therefore concluded that the sheer size of the market, while the German market 14 times larger, factor at least half of the price difference.

The authors say that the feed-in-tariffs lowered prices in Germany and that the situation is similar in the United States, only where the whole system is not as efficient. Simply speaking, the feed-in tariff in Germany is reduced each year since 2004, and thus puts pressure on the German installers of solar photovoltaic systems to lower their prices in order to continue to be an attractive investment for its customers.

Another reason for higher prices in the US are administrative barriers that include a longer process of installation, inspection and approval conditions, higher marketing costs and higher taxes for photovoltaics. Labor costs are also much higher in the United States, but mostly because workers in the US should be 10 times more time to set up the system (75 hours per system versus 7.5 hours in Germany).

The study even found that the price of solar systems in the United States varies widely, with different policies of individual states strongly affects the prices. The authors are suggesting that further research should be carried out with the impact assessment feed-in tariffs in Germany to reduce prices and the potential impact on solar policy of the United States.

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