Guess What: Solar PV Costs Keep On Falling

on November 06, 2013 at 3:00 PM

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The news about solar PV costs keeps getting better as price of modules falls as do installation and balance of system costs. A team of researchers at the Lawrence Berkeley National Laboratory (LBNL) has been tracking these developments in the US, with their latest report released in July 2013 confirming what most already knew.

The latest annual update reports that the installed price of solar photovoltaic (PV) installations in the US fell roughly $0.30/W to $0.90/W in 2012 representing a 6-14% decline from 2011 depending on the size. “This marks the third year in a row of significant price reductions for PV systems in the U.S.,” explains Galen Barbose, one of the report’s co-authors. Within the first six months of 2013, PV system prices in California fell by an additional 10-15%, suggesting that price reductions in 2013 will match or exceed those seen in recent years.

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The report indicates that the median installed price of PV systems completed in 2012 was $5.30/W for residential and small commercial systems smaller than 10 kW and $4.60/W for commercial systems of 100 kW or larger. Utility-scale systems came in around $2.50-4/W for systems larger than 10,000 kW. Despite these improvements, however, US prices remain stubbornly above most other countries examined, twice as expensive as Germany, for example.

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The report attributes much of the difference in PV system pricing to soft costs, citing the fact that the cost of PV modules and other hardware is typically similar across countries. The authors suggest that reductions in soft costs can be expected with economies of scale.

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For the period 1998-2012, California accounts for 40% of the US installed capacity, once again demonstrating that the Golden State is different than the rest of the US.

Perry Sioshansi is the President of Menlo Energy Economics and Editor & Publisher of EEnergy Informer. He can be reached at [email protected].
His latest two books are Energy Efficiency: Towards the End of Demand Growth and Evolution of Global Electricity Markets, both published in 2013 by Elsevier. Further details & 30% discount available here