Beware Before You Compare World Solar Markets

For the past few years I’ve been hearing about how efficient and less expensive it is to install solar power systems in Germany. Many people credit this growth to their feed-in tariff. But at the end of the day, it’s really lower costs that will drive faster market growth.

So I wondered, why are German installations so much less expensive than U.S. installations? Is it because of superior engineering, better beer or something else entirely.

Well, there’s only one way to find out – and that’s from the roof down. So…after tromping all over the country with our Regional Director (who’s got more roof time than me – plus much safer driving skills) we learned that fundamentally, costs are lower in Germany because there are fewer system requirements and regulations.

  • Negligible incentive paperwork (job folders are 2” thick in the U.S.)
  • No engineering drawings (installers work off diagrams)
  • No local building permit
  • No local inspection
  • No utility interconnection paperwork
  • No utility inspection
  • No rebate “check is in the mail”
  • No AC disconnect
  • No DC disconnect
  • Source circuits from modules are run with USE-2 cable with quick connects right into sockets on the inverters – no wire transitions
  • Source circuit cabling runs in snap-on plastic raceway – no conduit
  • There are residential solar installers with storefronts in many towns
  • Jobs are done in a week – from start to finish, including paperwork
  • Oh, and by the way, no grounding is required on each module and rack component.

So before anyone here in the U.S. advocates that feed-in tariffs will result in a market that grows as fast as Germany, we must first recognize that our costs are structurally $1-$2 higher. Regardless of how much more efficient our industry gets (and some companies already run a very tight ship here), we cannot make these additional costs disappear easily. Note that many of these additional costs are fixed, so on larger systems they are not as significant. On smaller residential systems incentives must be designed to take this substantial “bureaucratic friction” into account.