Page 32 - Cost_Competitiveness
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The Institute of Cost Accountants of India
Solar power and its underlying competi-
tiveness with Fossil fuels
Backdrop: Methodology:
Solar, and other technologies such Polysilicon price reductions have
as wind power, are no longer more accounted for signifcant portions of cost
expensive than traditional fossil fuels in reductions, and were once the largest
many parts of the world. Indeed, they are single cost component in panels, but this
cheaper. The cost of solar was competing has changed drastically and rapidly over
with traditional sources of energy, and the last decade. As estimated, Price of
would not be derailed by the plunge in the Panels would fall, Inverter and racking
the oil price. The blazing sun can be a cost are also declining and it expects this
cool way to generate electricity, if we trend to continue into the future. In fact,
set up rooftop solar equipment. With the solar installation jobs are likely to increase
cost of the devices dropping drastically substantially to keep pace with demand.
in recent years, setting up a solar system It has been predicted that Sales/
in your home can be economically Customer Acquisition Cost will fall even
viable option, especially with power bills further. Customers who prefer to own
ballooning. their own systems and have the ability to
do so could fnance their solar installation
Objectives: through multiple types of solar loans
which are already gaining in popularity.
► Reduction in processing costs If utilities begin to offer competitive solar
installations this would open the market
► Upgrading conversion effciencies to another vast source of potential
► Improving operating effciencies, customers.
Transportation costs and ‘soft costs’
which incompetently raise the price of Applicability:
panels
As solar gains mainstream acceptance, is
► Component cost reduction, next recognized as a cost competitive source
generation improvements and incre- of electricity and companies develop
mental production effciencies will com- better methods to interact with customers.
pel savings on the manufacturing side, To enhance its cost competitiveness
while new entrants and ongoing price
competition will keep margins compet- following methods can be applied:
itive ► Process Costing
► Energy effciency and Climate ► Resource Mapping
Protection ► Benchmarking Analysis
► Kaizen costing
► Six-Sigma Analysis
www.icmai.
The Institute of Cost Accountants of India
Solar power and its underlying competi-
tiveness with Fossil fuels
Backdrop: Methodology:
Solar, and other technologies such Polysilicon price reductions have
as wind power, are no longer more accounted for signifcant portions of cost
expensive than traditional fossil fuels in reductions, and were once the largest
many parts of the world. Indeed, they are single cost component in panels, but this
cheaper. The cost of solar was competing has changed drastically and rapidly over
with traditional sources of energy, and the last decade. As estimated, Price of
would not be derailed by the plunge in the Panels would fall, Inverter and racking
the oil price. The blazing sun can be a cost are also declining and it expects this
cool way to generate electricity, if we trend to continue into the future. In fact,
set up rooftop solar equipment. With the solar installation jobs are likely to increase
cost of the devices dropping drastically substantially to keep pace with demand.
in recent years, setting up a solar system It has been predicted that Sales/
in your home can be economically Customer Acquisition Cost will fall even
viable option, especially with power bills further. Customers who prefer to own
ballooning. their own systems and have the ability to
do so could fnance their solar installation
Objectives: through multiple types of solar loans
which are already gaining in popularity.
► Reduction in processing costs If utilities begin to offer competitive solar
installations this would open the market
► Upgrading conversion effciencies to another vast source of potential
► Improving operating effciencies, customers.
Transportation costs and ‘soft costs’
which incompetently raise the price of Applicability:
panels
As solar gains mainstream acceptance, is
► Component cost reduction, next recognized as a cost competitive source
generation improvements and incre- of electricity and companies develop
mental production effciencies will com- better methods to interact with customers.
pel savings on the manufacturing side, To enhance its cost competitiveness
while new entrants and ongoing price
competition will keep margins compet- following methods can be applied:
itive ► Process Costing
► Energy effciency and Climate ► Resource Mapping
Protection ► Benchmarking Analysis
► Kaizen costing
► Six-Sigma Analysis
www.icmai.
