4.2.4 Technical and Economic Impact Metrics Technical and economic impact metric pairs are used to operationalize economic models that calculate benefits. A technical impact metric conveys the benefit of a new technology in terms of physical units, such as number of labor hours saved or amount of raw materials saved, relative to the next best alternative. An economic impact metric, such as wage rates or cost of materials per ton, monetizes that technical benefit. The product of technical and economic impact metrics is then applied to the relevant quantity of output to derive total economic benefit. The data required for this analysis included: Production cost per watt for each company, Guaranteed PV module reliability measured in years, Annual volume of PV modules produced (in megawatts) for each company, and Annual volume of PV modules installed in the United States (in megawatts). 33 The breadth of technology developed and reviewed in Chapter 3 presented the challenge of how best to collect data to inform technical and economic impact metrics and then aggregate across technologies and companies. The solution was to use the common PV industry progress measure: production cost per watt. PV companies and DOE’s technology and policy strategists all placed great emphasis on driving down the production cost per watt for modules, which accounts for a significant portion of the total installed cost of a PV system. Gains in efficiency, technologies from process development R&D, yield gains, and 33 Technologies that benefited non-PV stakeholders were quantified using stakeholder-specific technical and economic impact metrics, such as the volume and cost of materials saved using a new production technology.
Retrospective Benefit-Cost Evaluation of DOE Investment in Photovoltaic Energy Systems 4-6 other technical impact metrics all influence the production cost per watt. This progress measure has been used and commonly reported since the late 1970s. Actual and counterfactual production cost per watt and production quantity data were aggregated across all funded PV companies. To the best of their ability, interviewees isolated technology effects from the addition of new production lines or similar capacity increases. A second technical metric of interest was reliability, as measured by the guaranteed life of a PV module, which is not captured by production cost per watt. Gains in reliability benefit consumers directly by lowering the annualized module cost and thus the LCOE. The technical impact metric was lifetime measured in years, and the economic metric was the change in the annualized module cost, which also incorporated decreases in the production cost per watt. The economic results section includes the formula for calculating this benefit.
- Spring '18
- Professor Obura Oluoch
- Photovoltaics, Solar cell