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The Energy Department launched the SunShot Prize competition, which offers cash awards for the top three teams that demonstrate non-hardware costs no higher than $1 per watt for small-scale photovoltaic systems. | Photo by Dennis Schroeder/NREL.

The Energy Department launched the SunShot Prize competition, which offers cash awards for the top three teams that demonstrate non-hardware costs no higher than $1 per watt for small-scale photovoltaic systems. | Photo by Dennis Schroeder/NREL.

Recently, we announced the launch of the SunShot Prize -- a new competition aimed at making it faster, easier, and cheaper to install rooftop solar energy systems. Participating teams must demonstrate that solar energy is an affordable solution for American families and businesses. To learn more about the competition, we caught up with Minh Le, Acting Solar Program Manager at the Energy Department. In the Q&A exchange below, Le shares important details about the impetus driving this innovative competition.

Why did the Department launch the SunShot Prize?

The global clean energy race is moving forward at lightning speed, and it’s time for the United States to regain its competitive edge. The SunShot Prize is meant to inspire organizations across the nation to dramatically reduce the costs of going solar. As part of the SunShot Initiative’s larger effort to make solar cost-competitive by 2020, this new program takes aim at soft costs, which are essentially what we think of as “the price to plug in.”

Can you explain the challenge with soft costs?

Prices for solar hardware, such as the photovoltaic (PV) modules, racking systems, and inverters, have fallen about 75 percent in the past four years. However, the soft costs like permitting, installation, customer acquisition, and other non-hardware costs have kept the overall price of installing a PV system relatively stable. It’s time to move the needle on this.

How much do soft costs add to the total price of a residential rooftop solar energy system?

Soft costs add about $3 per watt to the total price of a PV system for an average-sized home. The SunShot Prize challenges solar companies to install more than 5,000 PV systems during Phase I of the competition with the price for soft costs averaging no more than $1 per watt. For a typical home using a 5-kilowatt solar energy system, we’re talking about a $10,000 reduction in price! Breaking this $1 per watt price barrier brings the SunShot goal of $0.60 per watt for residential system soft costs within reach.

Is it possible to achieve this goal within the competition’s time frame?

Installing solar on 5,000 rooftops by the December 31, 2014, Phase I deadline may seem like a stretch target. And indeed, it is aggressive, but it is also attainable for Prize competitors. We’ve seen large installation companies putting up almost 2,000 systems each during 2011, and the market has been experiencing year-over-year growth of more than 50 percent. Plus, there’s no exclusion that prevents groups of installation companies from joining together as a single team: reaching the SunShot goals will require the right combination of competition and collaboration, and the same goes for winning the SunShot Prize.

How will the SunShot Prize impact the U.S. solar market?

That’s really up to the competitors, but the stage has been set for thousands of American families and businesses to be able to go solar at a fraction of the current cost. Our hope is that at least three teams successfully reach the goals set by this ambitious program. If that happens, then the SunShot Prize will have inspired at least 15,000 consumers to add about 100 megawatts of solar capacity to our energy portfolio while savings hundreds of millions in installation fees during the process. It’s a win-win-win for the solar industry, for the economy, and for the energy-conscious American consumer.

For more information, see the Energy Department press release and SunShot Prize website.