Page 11 - North American Clean Energy March/April 2019 Issue

are unlikely to return, meaning that price information based on unquanti ed site risks, several years into the future, is going to be highly conservative. Further, as all signs point to banner installation years for utility-scale solar, we may start to see limited EPC capacity for both project delivery, and pre-construction forecasting.
Bill Hargett is Director of Business Development – Renewables for JE Dunn Construction Company. Serving more than 13 years in the industry, Bill has project development and equipment and engineering sales experience, both internationally and domestically. His expertise includes functional technical knowledge of large-scale Power Generation technologies, Battery Energy Storage Systems, Photovoltaics, Gas to Liquids, Combined Heat and Power, Concentrated Solar Power, and Geothermal.
JE Dunn Construction /// www.jedunn.com
installation productivity is countered
by anticipated normal year-over-year wage in ation (roughly 2-3 percent annualized). e political and moral judgements regarding wage in ation and buying power aside, the fundamental issue is that, as major component costs of a solar project continue to decline, labor is going to make up a larger and larger share of the overall cost – a portion likely to grow for the foreseeable future.
In large part, the phenomenal growth curve of solar has been driven by
broader macroeconomic trends, such as manufacturing supply capacity in China and import tari assessments. Importantly, improvements in module e ciencies
have also played a role in cost reductions; a general rule of thumb being that every 10W increase in module wattage can yield $0.005/watt savings on racking, wiring, and installation labor. However, laboratory improvements in module e ciencies can be challenging to commercialize across multiple manufacturing lines; theoretical e ciency limits may mean increasingly marginal returns on R&D investment. As China cuts its renewable subsidy program, a potential panel supply glut could
mean less focus on e ciency and cost improvements in the short term.
e EPC industry has not bottomed
out on cost improvements. If we’ve learned anything, it’s that if you’re not innovating, you’re dying. On the whole, organizations have found the low-hanging fruit, and have passed those savings to
the customer; now it is time to climb the tree to get the harder-to-reach cost-saving opportunities. e days of predictable
10 percent annualized cost reductions
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SAFER, SMARTER, GREENER www.dnvgl.com/energy North American Clean Energy
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