Capital and Installation Costs

Capital and installation costs include the cost to purchase and install a DER technology at a specified location. Capital costs refer to the total equipment cost of a power generation system (i.e., fuel cell system, combustion turbine, etc.) to the end user. The table below shows capital cost ranges for a variety of DER technologies.

The capital costs for DER technologies can vary significantly even within the same technology, depending on size, power output, performance, fuel type, etc.

• Microturbine costs represent early commercial production costs and will likely decrease as production levels increase.
• Combustion turbines are a mature technology with high production levels. Larger turbines generally cost less per kW than smaller turbines.
• Reciprocating engines are a mature technology with high production volume, therefore costs are relatively low. Larger reciprocating engines cost more per kW than smaller engines because they are manufactured in smaller quantities.
• Stirling engine manufacturers target lower costs (~$2000) if higher production volumes are achieved. The high costs reported in the table refer to low production and prototype engines, primarily for space programs.
• Fuel cells are in varying stages of development and production, as represented by the large range in capital costs.
• Photovoltaic systems are a relatively mature technology. The photovoltaic systems vary in cost by system type and system size.
• Wind turbine costs also vary with the size of the project. Lower costs (ie $800/kW) are associated with large utility scale wind farms. Residential size wind turbines can range in price from $2,500-$3,500/kW.

Installation costs will also vary widely within a given technology, especially for less mature technologies. Installation costs are often approximately 30% of the capital cost, but can reach as high as 100% for highly customized applications.

The total installed cost of the DER technology is the sum of the capital cost and installation costs. The total installed cost may include the power generation module, the power conditioning unit, balance of plant equipment, installation, general facilities and engineering fees, project and process contingencies, and owner costs.

The following chart illustrates installed costs for specific examples of DER installations.