Three Innovative Solutions to Lowering PV Project LCOE

Levelized cost of energy (LCOE) is a metric used to compare the relative cost of energy produced by various sources such as PV, natural gas or coal-fired generation plants. At a basic level, LCOE is calculated by dividing a project’s total cost, including construction and operation, by the energy generated over the project’s lifetime. As the solar industry has grown and matured, one objective has been to drive down PV project LCOE and compete head-to-head with conventional power generation sources—and to do so in the eventual absence of federal, state and utility financial subsidies.

A range of factors impact PV project LCOE, including  costs such as customer acquisition, site analysis, system engineering, and equipment procurement and installation; financial variables such as capital cost, taxes, insurance and incentives; and a project’s actual energy production. One of my main objectives at this year’s Solar Power International (SPI) conference was to conduct interviews with industry stakeholders to explore how they are tackling LCOE, especially considering the uncertainty surrounding the future of the investment tax credit (ITC) in 2017 and beyond.

A wealth of examples of innovative equipment, systems and services developed with LCOE in mind were present at SPI in Anaheim, CA. For this article, I dive into forward-looking solutions from three vendors throughout the supply chain that represent some of the efforts under way—and some of the opportunities—to lower the LCOE of future PV installations.

SolarEdge Technologies

Power electronics is one segment of the solar industry exemplifying the innovation that is under way to minimize project LCOE while increasing the reliability, functionality, serviceability and visibility provided by modern PV power electronics. Examples include the recent proliferation of transformerless residential string inverters with multiple MPP trackers, high-power 3-phase string inverters developed for deployment in commercial and industrial rooftop systems, and integrated multi-megawatt centralized power-conversion solutions for utility-scale PV plants.

SolarEdge Technologies’ products exemplify some of the advancements solar power electronics vendors are bringing to the table. The string inverter, module-level power optimization, and communications and monitoring provider had a successful IPO in 2015. SolarEdge is leveraging its increased resources and bankability to expand the functionality of its existing line of single- and 3-phase string inverters and related MLPE components, to develop a Tesla-compatible solution for energy storage applications and to launch a new inverter topology branded HD Wave. I had the opportunity to sit down with SolarEdge founder Lior Handelsman, now VP of marketing and product strategy, to discuss some of these developments and the company’s overall approach to reducing PV system LCOE.

SP: How does SolarEdge approach LCOE during component design?

LH: Everything in our system was originally designed for LCOE. You know that with SolarEdge you can build very long strings. People have been talking for years about the benefits of a 1,500 V inverter. Why do you want a 1,500 V inverter? Because the strings will be longer and the cost of cable and combiner boxes will be lower.

What we give you now—at less than 1,000 V—is the equivalent in string length of 2,500 V. You can put 60 modules on one string because of the SolarEdge optimizer architecture. I just met with a customer who recently designed a commercial system with a competitor’s inverter that required 44,000 feet of cable. With SolarEdge equipment, he was able to do it with 7,000 feet. That’s because of the very long strings. With our 33 kW inverter, you can wire three strings into the inverter without a combiner box. That advantage is bigger in commercial applications than it is in residential. So that’s one part of LCOE.

Another part of LCOE that is stronger in residential than it is in commercial is that you can almost always put more modules on the roof. That essentially means that your average cost of customer acquisition goes down. Say in 10% of the cases at least—probably closer to 25%—you want to put in a bigger system, but the roof doesn’t allow it. With SolarEdge, you can usually install at least one or two more modules and sell a bigger system. For residential installers, this means that the average cost of customer acquisition goes down. So that’s another feature.

Then we have the cost of O&M. Many customers do not know how to account for that, but the ones who do know are aware that module-level monitoring gives you the ability to reduce O&M costs. We are now adding a feature to our monitoring that allows you to do a commissioning report when you are not on-site. The software monitors the system at the module level and calculates actual yield compared to predicted yield using an installed irradiance meter. You do this from your office.

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