5
This report is available at no cost from the National Renewable Energy Laboratory at www.nrel.gov/publications.
Component cost increases were a major topic during our Q1 2022 interviews with industry
stakeholders. In addition to stating that all prices had gone up since the previous year, residential
and commercial installers noted significant price increases specifically for modules, batteries,
electrical panels, circuit breakers, and wire. Utility-scale stakeholders mentioned significantly
higher prices for modules, inverters, site preparation, transformers, switchgears, copper, steel,
PVC, and shipping. Because of tight supply chains, obtaining components in a timely manner
could incur additional premiums, according to some interviewees. Some also stated that the
availability and price of components could change rapidly week to week and that module price
increases varied unevenly across installers. Large residential and commercial installers as well as
utility-scale installers reported that they could buy containerload quantities directly from module
manufacturers, which yielded the lowest costs. Smaller installers, however, said that they either
could not handle enough volume to obtain direct, containerload pricing, or that warehousing
costs for high-volume purchases were prohibitive. For this reason, smaller installers reported that
they paid higher module prices through distributors.
Our interviews also suggested that a tightening labor market contributed to higher costs for U.S.
PV systems in Q1 2022. The U.S. unemployment rate rose from 3.5% immediately before the
onset of the COVID-19 pandemic to 14.7% in April 2020 and then dropped again, reaching 3.8%
in February 2022. These fluctuations have been accompanied by an increased rate of workers
quitting their jobs, in a phenomenon that has been called the “Great Resignation” (BLS 2022a).
The tight labor market was reflected in EnergySage’s 2021 installer survey, which identified a
lack of trained labor as the most frequent barrier to growing installation businesses (EnergySage
2022). Our Q1 2022 industry interviews highlighted how higher labor costs contributed to higher
PV system costs. Multiple participants noted significantly increased labor costs and linked them
with labor shortages; in some areas, high demand for installations meant that workers could pick
and choose projects and demand higher wages. Some installers also reported that, because local
labor was unavailable, workers needed to travel to job sites—thus incurring additional costs for
items such as hotel rooms and meals.
4 NREL Benchmarks’ Purpose and Scope
In all industries, numerous metrics reflect product costs and prices. These metrics say different
things and are useful for different purposes. For instance, an investor may be interested in the
costs to produce a new product, a stock trader may want to know the real-time trading price of a
good, and a forecaster may seek a long-term average cost. It is therefore important to understand
what the NREL benchmarks are and are not, and for what purposes they should be used. This
section describes the meaning of the NREL benchmarks, their intended purposes, how they vary
from other market metrics, and their limitations. The final subsection notes changes to the
benchmark report in Q1 2022.
4.1 Meaning of the NREL Benchmarks
Industry, analysts, policymakers, and other stakeholders are interested in the prices of new
technologies and the underlying costs to produce those technologies. In the U.S. PV industry,
prices are readily observable and documented in resources such as Barbose et al. (2021a).
However, installed system prices do not provide insight into underlying system cost drivers.
Disaggregating installed system prices into underlying cost drivers requires identifying all
relevant inputs to PV installations and assigning costs to those inputs. Broadly, this cost