For the fifth consecutive year, the installed price for grid-connected solar photovoltaic (PV) systems in the U.S. has dropped in price, according to a report from the U.S. Dept. of Energy’s (DOE) Lawrence Berkeley National Laboratory (Berkeley Lab).
According to the report, “national median installed prices in 2014 declined year-over-year by $0.4/W (9%) for residential systems, by $0.4/W (10%) for non-residential systems (less than or equal to 500 kW) and by $0.7/W (21%) for non-residential systems (higher than 500 kW).”
In the first six months of 2015, installed prices continued to fall, with residential systems experiencing a $0.3/W (8%) decrease, $0.5/W (13%) decrease in non-residential systems (less than or equal to 500 kW) and a $0.2/W (6%) decrease for non-residential systems (higher than 500 kW).
The report attributes system price declines to “solar soft costs,” rather than the price of modules, which have remained relatively flat since 2012. Soft costs include items such as “marketing and customer acquisition, system design, installation labor, permitting and inspection costs and installer margins,” according to the report. “Soft costs reductions are partly due to steady increases in system size and module efficiency, though likely also reflect a broad and sustained emphasis within industry and among policymakers on addressing soft costs.”
PV system pricing, according to the report, drastically varied. For residential systems sold in 2014, 20% were sold for less than $3.50/W, but another 20% sold for more than $5.30/W.
“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,” said Naïm Darghouth, one of the report’s authors.
“The fact that such variability exists underscores the need for caution and specificity when referring to the installed price of PV, as clearly there is no single ‘price’ that uniformly and without qualification characterizes the U.S. market, or even particular market segments, as a whole,” said Galen Barbose, the report’s lead author.
For example, residential installers in Arizona had median prices at or below $3/W in 2014. Across all U.S. residential systems, the median price was $4.30/W.
The report is based on data from 400,000 residential and non-residential systems installed between 1998 and 2014 across 42 states. According to the Berkeley Lab, it represent more than 80% of all distributed PV capacity in the U.S.
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