The Cost Analysis of PV Farms: Factors, Components, and Maintenance Expenses"

PV farms, how much do they cost...

 

In 2022, according to the Institute of Renewable Energy, the unit cost of a 5kW PV installation ranged between 4000-6000 PLN/kW, a 100kw installation 2900-3500 PLN/kW, and 5MW 2200-3600 PLN/kW. In 2022, the prices of installations and installation services were increasing. Components in 2023 are getting cheaper with greater physical availability. Relatively, for all types of installations, modules account for the largest share of costs (almost 60% of the cost of the entire installation).

 

Support structure accounts for the smallest share of costs, and other components, i.e. cabling, commission, installation design, documentation and operation, account for less than 15% of total costs.

 

Market prices for photovoltaic projects fall within wide price ranges depending on the stage of development. The key factor with the greatest impact on the price of a project is obtaining grid connection conditions.

Related to this element of the development process is the early securing of a ground lease for PV, without the certainty of any connection conditions. In addition to grid connection refusals, another problem that developers are increasingly facing is the decreasing availability of land that meets the requirements for PV.

 

This consists of aspects such as the class of the land, the distance from the medium voltage line, the size and shape of the plot, the lack of shading, the access road, but also restrictions arising from the Local Development Plan.

Further development of farms above 1 MW may be adversely affected by planned amendments to the Law on Planning and Spatial Development, i.e. provisions stipulating the obligation to prepare a Local Development Plan for installations above 2 MW.

 

Projects of 1 MW farms at the initial stage of development in 2022 cost an average of about EUR 110,000 and ranged from EUR 90,000 to EUR 120,000. Projects at the stage of an issued building permit already cost from about EUR 100,000 to EUR 180,000. Due to the limited amount of land for installations, prices can be expected to rise in the following years to EUR 200,000 per MW of project capacity.

 

The most important costs of maintaining an operating farm include:

• lease (PLN 11,000-18,000/ha/year - PLN 7,300/22,500/MW per year;

•prices are currently moving toward PLN 20,000/ha for new projects and higher);

• security, communications, grass cutting, module cleaning and others are an annual expense of up to PLN 10,000/MW.

• The total cost of maintaining the farm, according to our estimates, is PLN 21,000-28,000/MW