What we want to explain first is what is the "soft cost" of photovoltaic system. This concept can be explained by the following formula:

Soft cost = total cost - hardware (module, inverter, structural and electrical BOS) cost

PV system software cost = total cost - hardware cost (module, inverter, bracket, electrical)

Specifically, soft costs include land, labor, tax, administration, profit and other costs. As can be seen from the figure below, over the past seven years, the hardware cost of photovoltaic systems in the United States has decreased significantly, and the proportion of "software cost" has gradually increased.

Taking public utility grade (largescale ground) photovoltaic as an example, in 2010, the soft cost accounted for only 32% of the total cost, while in 2017, the soft cost accounted for 41% of the total cost. In 2017, the soft cost of photovoltaic systems in commercial facilities accounted for 59%, while the soft cost of photovoltaic systems for household use accounted for 68%.