It’s the non-panel costs that are hurting us. Permit/paperwork costs are too high. We aren’t as efficient at getting systems up and going. Some price gouging is happening.

We’ve seen in Germany that once solar reaches a critical level (and that level is surprisingly low) that it causes a drastic decrease in midday wholesale electricity costs.
http://cleantechnica.com/2012/03/23/german-solar-bringing-down-price-of-afternoon-electricity-big-time-more-charts-facts/
Peak period electricity can be very expensive to purchase. Just look at places that use TOU pricing.

The utility company can help you purchase solar, leverage their money with your investment, real estate and insurance along with existing federal and state subsidies and gain your midday input which they can pay back with much cheaper off-peak electricity. I can see that subsidy making a lot of sense for them.

The federal subsidy is self-deflating. It’s based on 30% of system cost.
I might be time for the state to consider reducing their subsidy or at least make it self-lowering by using the federal model.

But, consider this. Keep subsidies high for a while. Let solar installers make some decent money. Those profits will attract others to the industry and create the competition which will bring down prices for all. We need “Costco” installers rather than “cottage industry” installers. That’s what is working in Germany. High volume, low advertising/customer acquisition costs.

Total cost: $14,000 ($5.00/watt)
Utility incentive: $4,000 (paid to contractor)
Federal tax credit: $4,200 (over 2-3 years)
State tax credit: $5,800 (over 4 years)

So that’s zero dollars out of my pocket once I get the tax credits back in 4 years. There were a few more add-on costs that weren’t in the original estimate, leaving me about $1000 out of pocket.

That is all assuming that I have enough tax liability to earn the credits and that my installer is doing the tax credit math right. We’ll see what happens when I file my taxes.

This is for a 2800W (DC) system that should yield about $200-250 in offset electric bills per year at my local (cheap!) rates. YMMV.

The utility and state tax credits are per-watt with a dollar cap that makes 2800W the sweet spot for getting you, my fellow taxpayers and utility ratepayers, to pay for my solar PV system. The federal tax credit is 30% of project costs.

How much of the more than $8,800 that you didn’t pay was covered by state subsidies and how much by utility subsidies?

Bob – It’s not entirely about market maturity, and I agree about the fossil subsidies. Take a look at this Grist post, and the links within it, for more analysis of Germany v. US. It’s thoughtful.

http://grist.org/climate-energy/why-is-rooftop-solar-cheaper-in-germany-than-in-the-u-s/

Germany has a mature solar industry. It’s ready to stand on its own.

Removing subsidies too early can damage an emerging technology and delay its maturity.

(Why is it we’re still subsidizing the fossil fuel and nuclear industries and so many people want to cut off renewables, the newbys? What could their motives be?)

Example: I just got solar PV installed on my house, and between the federal and state tax credits and my utility’s incentive, I’m paying nearly zero (less than $1000 for a $14,000 2.8 kW system, which will pay me about $250 per year in reduced bills). At that price, the installer has no incentive to bring costs down.

We don’t need all 50 states to shape up at the same time, just some to take off and demonstrate a better way. If even a couple of states got going we would see increases in installation rates. Our three largest states have the population of Germany.

At some point even the reddest of state citizens will get fed up with the prices they are forced to pay and push for change.

As supple as the American private enterprise system is and considering how many experienced construction people are looking for work I would expect we could ramp up installation number very rapidly.

Most of the labor is low-skilled grunt work. Get the rack mounts attached to the roof. Attach panels to roof. Run conduit and pull wire. Panels are becoming ‘plug and play’. The only skilled job is seeing that the service panel tie-in is done correctly.

It will take a while for any country to duplicate that.

What would be nice is a table with four columns – 1) Category (Panel, Inverter, etc., 2) Germany price, 3) US price, and 4) Percent Difference.