Visualizing the Installation Market as a Factory

The photoelectric zeitgeist tends to focus on manufacturing and its symbol, the factory. This makes sense because the factory has a concrete footprint, a time line to completion and most importantly a measurable cost. As an added bonus we have mental shortcuts (research even) that helps us understand how a 1 GW factory is more efficient and competitive than a 100 MW facility.

I think we fall short when it comes to visualizing what a 1 GW installation workforce looks like. We rarely talk about how creating a 1 GW installation workforce requires a significant investment comparable to building a factory. I think this lack of recognition causes problems. It allows racking manufacturers to claim savings of 50 cents/Watt on installation without anyone calling them on the hollowness of their statements. More generically, we don't seem to be thinking about how installation costs will change as markets transition from 100 MW to 1 GW. This lack of consideration allows us to be distracted by technologies that claim installation savings which will most likely never exist. We're missing the fact that these supposed savings are more likely to be captured naturally by competitive pressures and learning by doing effects inherent is scaling up the size of the installation market. This is similar to the improvement in performance associated with scaling up from a 100 MW factory to a 1 GW factory that some of us have come to take for granted.

Big Installation Market = Cheaper Installation Costs = Higher Panel Price Sensitivity

I suspect a big part of the reason why Germany was able to soak up so much PV in 2009 was because they had a multi-GW workforce. By way of analogy with manufacturing, they had already made the jump from the 100 MW facilities up to the GW level and captured all the associated efficiencies along the way. When the panel prices started plummeting in 2009 the Germany market with it's low installation costs was more sensitive to the drop in panel prices than anywhere else. It's now been a year since Germany's PV market began its surge (June 2010) and Germany is still the only multi-GW market around. Germany still has the lowest installation costs and by extension they still have the greatest sensitivity to falling panel prices.

What does it all mean? Sensei say the zeitgeist is out of balance. There needs to be more focus on the installation side of things. Only then will there be peace.