Distributed solar prices in U.S. continue to fall for fifth straight year

Dive Brief:

Installed prices for distributed solar photovoltaic (PV) residential and small non-residential systems completed in 2014 were $0.40 per watt lower than in 2013, and prices for large non-residential systems were $0.70 per watt lower, according to Tracking the Sun VIII, the annual Lawrence Berkeley National Laboratory solar market report. It is the fifth consecutive year solar installed costs have dropped significantly.
During 2015’s first six months, installed prices in several large state markets fell another $0.20 per watt to $0.50 per watt, or 6% to 13%, maintaining a trend that is especially noteworthy, the researchers point out, because the module price that drove early installed price drops has remained relatively stable since 2012.
Price drops since 2012, according to the researchers, reflect success by the industry in its push to get cuts in solar “soft” costs such as those for marketing, customer acquisition, system design, installation labor, and permitting, inspections, and interconnection.

Dive Insight:

PV system pricing remains highly variable, the report finds. 20% of the residential systems installed in 2014 were priced at less than $3.50 per watt and another 20% were priced at over $5.30 per watt. Non-residential system pricing was equally variable. The price differences are driven by differences in installers, system design, component selection, market conditions, and local regulations, according to the researchers.

The researchers report leading installers in important state markets to be substantially similar and the methods they use to keep prices low could suggest a best-business-practices benchmark for more widely achieved installed price cuts.

Drivers of PV system prices and price variability considered in the report include system size, state market, type of financing (direct ownership versus third party owned), new building or retrofit installation, for-profit commercial versus tax-exempt site host, module efficiency, type of inverter, and rooftop versus ground mount installs with and without tracking.