Report Says Photovoltaic Prices Falling Rapidly In U.S. Market
According to the latest issue of Tracking the Sun, the installed price of solar photovoltaic (PV) power systems in the United States fell substantially in 2011 and through the first half of 2012. Tracking the Sun is an annual PV cost-tracking report produced by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkley Lab), funded by the U.S. Department of Energy’s Solar Energy Technologies Program of the Office of Energy Efficiency and Renewable Energy.
Berkeley Lab, managed by the University of California for the U.S. Department of Energy, conducts unclassified research across a wide range of scientific disciplines. They have a tradition of excellence in research, with thirteen Nobel Prize winners, thirteen National Medal of Science recipients, and fifty-seven members of the National Academy of Sciences who have all been on staff at one point or another. Founded 80 years ago, Berkeley Lab is the oldest of the National Laboratories and supports multidisciplinary scientific teams working to solve global problems in health, technology, environment and energy.
According to the report, the median installed price of residential and commercial systems fell by approximately 11 to 14 percent from 2010 to 2011, depending on the system size. California prices fell by an additional 3 to 7 percent in the first half of 2012. The report found that these price reductions are in a large part attributable to dramatic price decreases in PV module prices, which have been in a free fall since 2008.
Non-module costs such as installation labor, marketing, overhead, inverters and the balance of systems have been falling dramatically over time as well, the report says.
“The drop in non-module costs is especially important as these costs can be most readily influenced by local, state, and national policies aimed at accelerating deployment and removing market barriers,” notes Ryan Wiser of Berkeley Lab’s Environmental Energy Technologies Division.
From 1998 to 2011, the average non-module costs for residential and commercial systems declined by roughly 30 percent. Even at that rate, however, they have not declined as rapidly as module prices in recent years. This disparity means that non-module costs now represent a sizable portion of the installed price of PV systems. A continued deep price decrease in the price of PV will require a concerted effort to lower the portion of non-module costs that are associated with so-called “business process” or “soft” costs.
In 2011, the median price of PV systems installed in 2011 was $6.10 per watt for systems smaller than 10 kilowatts in size (for example, residential and small commercial systems). For larger commercial systems (over 100 KW in size) the cost was $4.90/W. Systems larger than 2,000 KW in size – mostly utility sector systems – averaged $3.40/W in 2011.
Galen Barbose of Berkeley Lab says that we need to keep those numbers in context, noting that “these data provide a reliable benchmark for systems installed in the recent past, but prices have continued to decline over time, and PV systems being sold today are being offered at lower prices.”