The More Things Change.... by Harry Warren, WGES
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Energy Services, Inc.
The more things change …
Presentation to the Solar Energy Focus Conference
by
Harry A. Warren, Jr.
President
Washington Gas Energy Services, Inc
December 4, 2009
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Energy Services, Inc.
1984
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Energy Services, Inc.
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Energy Services, Inc.
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Energy Services, Inc.
Solar PV Balance of System Costs
If solar panels are free, balance of
system costs are too high to make
solar PV grid competitive.
Theodore B. Taylor and Harry Warren - 1984
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Energy Services, Inc.
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Energy Services, Inc.
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Energy Services, Inc.
2009
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Energy Services, Inc.
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Energy Services, Inc.
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Energy Services, Inc.
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Energy Services, Inc.
Solar PV Balance of System Costs
If solar panels are free, balance of
system costs are too high to make
solar PV grid competitive.
Harry Warren - 2009
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Energy Services, Inc.
Tracking the Sun II, The Installed Cost of Photovoltaics in the U.S. from 1998-2008
Ryan Wiser, Galen Barbose, Carla Peterman, Naïm Darghouth
Lawrence Berkeley National Laboratory, October 2009
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Energy Services, Inc.
Tracking the Sun II, The Installed Cost of Photovoltaics in the U.S. from 1998-2008
Ryan Wiser, Galen Barbose, Carla Peterman, Naïm Darghouth
Lawrence Berkeley National Laboratory, October 2009
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Energy Services, Inc.
$3.00 per watt
isn’t grid parity
Mini Financial Analysis - Solar PV Project
1 Watt SystemNo incentives
Capital Cost 3.00$
Debt Ratio 50%
Pre-tax Cost of Debt 6%
System Life 20 yrs
Tax Rate 35%
Annual Output 1.2 kwhPower Price 0.40$ per kwh
Annual Revenue 0.48$ Operating Expenses -$
EBITDA 0.48$
Depreciation 0.15$
EBIT 0.33$
Debt Service 0.09$
EBT 0.24$
Taxes 0.08$
Net Income 0.16$
After Tax ROE 10.4%
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Energy Services, Inc.
BOS = Non-module costs
“Non-module costs (which may include items such as inverters, other
balance of systems hardware, labor, and overhead).”
“Average non-module costs (which may include such items as
inverters, mounting hardware, labor, permitting and fees, shipping,
overhead, taxes, and profit) shown in Figure 5 were calculated as the
difference between the average total installed cost and the module
price index in each year.”
Tracking the Sun II, The Installed Cost of Photovoltaics in the U.S. from 1998-2008
Ryan Wiser, Galen Barbose, Carla Peterman, Naïm Darghouth
Lawrence Berkeley National Laboratory, October 2009
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Energy Services, Inc.
Reducing Non-module Costs
• ??????????
• Standardization/modularization of design– Optimal component matching / economics
– Minimize design work
– Minimize runs
• Don’t oversize for roof
• Optimal tilt
• Project development efficiency– Client and site selection
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Energy Services, Inc.
Reducing Non-module Costs
• DC to AC to DC?
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Energy Services, Inc.
The more things change …
The closer we get to grid
parity!!
Thanks