Peter Kelly Detweiler has a good article in Forbes about new ways of measuring panel outputs. He hits on a key point, which has been discussed before: cost per watt is not the best way to measure solar panels. Nor is it the best metric for solar projects in general.
One of the things I have been most amazed by as a developer is how many financiers of solar projects really don't look beyond the cost per watt. We have had plenty of situations where a little more money up-front would enable much larger production over time and a better ROI.
The industry is so trained to look for lowest cost per watt that it's hard to drive discussion beyond that. I also think part of the challenge is the financial industry's focus on short term profits.
The other challenge is getting deals to pencil in general. But cash flow for projects is often better in the early years thanks to tax credits and depreciation as well as high SREC prices.
So the question becomes what is the best way to measure the value of a solar system? A lot of people think that levelized cost of energy (LCOE) is the best approach.
We will have more posts in the future on LCOE, how to calculate it and how to use it to compare project scenarios.
What do you think? Is cost per watt still the best way to measure things? What approaches or metrics have you used? What do you see as the measure that is most important in projects you have developed or financed?