For several years now, renewable energy has offered the lowest levelised cost of electricity (LCOE) across all technologies and by quite a margin, even though solar PV’s LCOE ticked upwards marginally in 2025, both in the US and globally.
However, the big picture can be a bit misleading, as other costs can impact the construction of a project. Veronica Bermúdez Benito, independent expert at advisory firm Berbetin, highlights that a module quotation for a specific project can be the tip of the iceberg and may cover only the project’s capital requirement. She tells PV Tech Premium that a project is often assessed by its capex or modules, whereas in many markets, modules constitute a negligible share of the total cost of electricity.
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“You have civil works, foundations, electrical equipment, installations, grid connection, a lot of different things that drive your costs, while tariffs, sourcing requirements, and the delivery schedule can also change a lot how the owner actually pays for the project. And then you enter into the part of the financing conditions,” explains Bermúdez Benito.
She adds that, even though technical improvements can improve the financing conditions of a PV system through higher conversion efficiency, better material use, or manufacturing productivity, for Bermúdez Benito, the focus should be on how savings are achieved, which is “not reducing cost here and there”.
Buying cheap and installing cheap
“One of the things that was said by some European manufacturers [at this year’s EU PVSEC], is that they are facing more and more requests from developers to come to rescue them in the sense that they buy cheap, they install cheap, they operate and maintain cheap, and after problems come, they need to replace modules, they need to replace components, and finally, for the developer, the ROI (return on investment) is not there,” says Bermúdez Benito.
“And it is not there because they tried to do everything cheap without considering the full system.”
This resonates with what Todd Heffner, a partner at law firm Smith Gambrell Russell, told PV Tech Premium earlier this year, and how many solar PV and energy storage developers in the US were racing to lower project costs, which could have consequences once a project began operations.
“If you are just looking to save money because you buy cheap, at the end of the day, your return on investment will not be there because the cost of your electricity will be much higher since you will need to replace those components that are failing,” adds Bermúdez Benito.
Having higher capex on a project can, in the long run, be more beneficial than reducing costs at the beginning of the project. Bermúdez Benito gave an example of a project that incurred 5% more upfront capex but used higher-quality products. In her view, that project could make that 5% return in the same year thanks to a higher productivity of the modules and also fewer maintenance requirements.
She adds that this is one of the reasons why bifacial modules have become a standard in most projects. Upfront capex might be higher, but its lifetime productivity will also be improved and it does not add costs in the operation and maintenance (O&M) of a project.
“I keep saying to the people I discuss with, that it is very important you look into the component as a part of the whole puzzle. And the whole puzzle includes from day one to the last day [of the project],” says Bermúdez Benito.
Three common procurement mistakes
When asked what common errors developers, independent power producers (IPPs) or project owners still make when selecting modules and other components of a solar system, Bermúdez Benito highlights three.
“After 20 years in this field, you keep seeing the same mistakes by almost everybody. One very recurrent error is that they rank components before even establishing the operating requirements of the project,” says Bermúdez Benito.
She adds that even though a module’s price per watt and its nameplate power are very useful inputs, these do not tell the annual energy contribution and the mechanical field of the risk that it introduces in the site.
The second common error that companies continue to make, according to Bermúdez Benito, is how a familiar supplier or a certain technology level with a good reputation is treated as enough evidence for an exact product.
“I have done a lot of due diligence of manufacturers for developers, and we see that even for those very big people, the bill of materials is not always what we think.”
The smallest change in the bill of material (BOM) can easily have an adverse effect on the quality of a module, as was discussed last year with Tristan Erion-Lorico, VP of sales and marketing at Kiwa PVEL. Bermúdez Benito mentions that a product’s certification is a minimum and that the BOM is not always what we think and things can change within a same product.
The third mistake is the lack of involvement of the engineering and operational teams early on a project.
“Many times, procurement teams do not involve engineering and operations early enough. They start to procure the project from the basic design. They capture price saving, while at the same time construction and asset management will inherit the consequences,” explains Bermúdez Benito. She explains how procuring larger modules can have an impact on the inverter inputs, cabling, protection and the way a module is mounted.
Focus on opex to reduce LCOE
Bermúdez Benito explains that the reduction of LCOE has historically been tied to capex, however companies need to start looking at project O&M too as these costs are accounting for a bigger share of project spending.
“The opex is becoming more important for LCOE because there are very limited places where we can still reduce capex cost.”
She adds that she would include the O&M into the equation of LCOE from the beginning of design of a power plant. This includes not only cleaning schedule of the project and maintenance schedule, but also curtailment and low price periods too.
“Capex has been very important to reduce LCOE. Now it’s time to focus a little bit more on OPEX and maintenance and preventive maintenance.”
She explains that there is a lot of innovation in the field of predictive maintenance, which includes, for instance, replacing a module, a cable or a component of the power plant before an effective power loss happens.
As Bermúdez Benito says: “when you have power loss, you have already lost money.”
She gives another example about cleaning robots for large-scale power plants. “We did an analysis with different scenarios of capex increase in upfront investment, and we realised that except where you have a very cheap labour force like in India, the LCOE got reduced in all the cases, even in Europe,” explains Bermúdez Benito.
These savings also help reduce the degradation of the PV cells, as keeping the modules clean reduces the stress put on the cells.
When talking about curtailment and low-price periods, Bermúdez Benito highlights a solution that also impacts the capex of a project, which is including energy storage in a project.
Bermúdez Benito explains that the important element in a PV project or a co-located project is not about reducing capex and/or opex, but optimising the LCOE of the project.
“What I mean by optimising LCOE is not even reducing LCOE, because depending on the project, you may want to have a higher LCOE but be able to produce the electricity when you need it and to store the electricity when you need to store it,” concludes Bermúdez Benito.
Veronica Bermúdez Benito will be a panellist at our upcoming PV ModuleTech Europe Conference in Málaga, Spain. Taking place on 3-4 November 2026, the event will cover the European solar market with a focus on procurement and performance of utility-scale solar plants. This year’s event expands its scope beyond PV modules and includes inverter and battery energy storage systems. For more details about the conference and booking a ticket, click the link above. Use our discount code Spk20 for 20% off tickets.
