A controversy is brewing over the appropriateness of unit costs because the prices differ sharply between school solar installation projects separately pushed by the Ministry of Education and the Ministry of Climate, Energy and Environment. Although both are similar projects to install solar facilities on school rooftops, the Ministry of Education's unit cost is about twice that of the climate ministry.
On Apr. 7, according to the supplementary budget, the unit cost the Ministry of Education applies to solar facilities at national elementary and middle schools and national universities is about 3.33 million won per kW. By contrast, the climate ministry's unit cost for installing solar at private schools under its renewable energy dissemination support project is around 1.5 million won. The National Assembly Budget Office noted, "The two project unit costs differ by about a factor of two," adding, "It is necessary to check whether construction unit costs were calculated appropriately."
The two ministries' project details are largely similar. The Ministry of Education included in the project budget the purchase expense for equipment such as panels, inverters and other ancillary materials, as well as design and supervision expense, trunk line construction costs, and monitoring system costs. The climate ministry excludes items such as monitoring system costs and design and supervision expense. However, even when including monitoring system costs and design and supervision expense for this year, the climate ministry's unit cost is said to be only about 2.1 million won.
The Ministry of Education cites the "procurement structure" as the backdrop for this price gap. For projects targeting national schools, only products registered with the Public Procurement Service must be purchased under relevant laws, and standards such as the minimum bid price are strict. By contrast, the climate ministry's project targets private schools, where the range of product choices is wider and price competition is active.
Still, some say the Ministry of Education's unit cost is high even after taking this into account. The National Assembly Budget Office said, "Based on the national e-procurement system, the average transaction price for solar facilities is about 2.2 million won per kW." The Ministry of Education said it "reflected the average value of the top five excellent procurement products," adding that "the remaining expense will be used for fire prevention equipment or educational materials."
Some also raise suspicions that prices of solar products registered with the Public Procurement Service may have been set excessively high. According to the "national e-procurement sample survey results" released by the Board of Audit and Inspection on Mar., among 370 registered products, the delivery prices of 157 items were found to be 20% to 297% higher than market prices.
Lee Sang-min, a research fellow at the Korea Institute of Public Finance and Policy, said, "Waste of budget is being repeated through high-priced purchases via the Public Procurement Service," and added, "At the central government level, it is necessary to prepare measures to lower unit costs, such as expanding the use of private-sector products."