Preliminary data for the first six months of 2016 suggest that prices have continued to fall within most states and market segments, according to a report from the Department of Energy’s Lawrence Berkeley National Laboratory. In particular, installed prices in 2015 declined by $0.20-per-watt (W) or 5% year-over-year for residential systems, by $0.30/W (7%) for smaller non-residential systems.
The report, Tracking the Sun IX, focuses on installed pricing trends in the distributed PV market, including both residential and non-residential sectors. “This marked the sixth consecutive year of significant price reductions for distributed PV systems in the U.S.,” notes Galen Barbose of Berkeley Lab’s Electricity Markets and Policy Group, the lead author of Tracking the Sun. The continued decline is especially noteworthy given the relatively stable price of PV modules since 2012. The report attributes recent system price declines, instead, to reductions in other hardware costs and to solar “soft” costs. The latter includes such things as marketing and customer acquisition, system design, installation labor, and permitting and inspections.
The report also highlights the tremendous variability in PV system pricing. For example, among residential systems installed in 2015, 20 percent sold for less than $3.30/W, while another 20 percent sold for more than $5.00/W. As Berkeley Lab’s Naïm Darghouth explains, “This variability reflects a host of factors: differences in system design and component selection, market and regulatory conditions, and installer characteristics, to name a few.”
Looking ahead, the improving economics of solar power demonstrated in this report, coupled with the extension of the 30% federal investment tax credit (ITC) through 2019, should drive a continued expansion in all sectors of the U.S. solar market over the next few years.
Learn more in a free webinar September 7, 2016.