Cost Of Solar Systems In US Continues To Decline
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A new report from the Department of Energy’s Lawrence Berkeley National Laboratory has shown that the installed price of solar photovoltaic (PV) power systems across the United States fell substantially in 2011 and continued the decline through the first half of 2012, supplanting solar as an integral part of the American economy and mindshare.
The news was reported in the latest edition of Tracking the Sun, an annual PV cost-tracking report released by Berkeley Lab.
The report found that the median installed price of residential and commercial PV systems which were completed in 2011 fell by approximately 11-14% from the year before.
Additionally, prices in California fell by an additional 3-7% within the first six months of 2012.
The drop in price for installed systems is due in part to the massive reduction in PV module prices, which have been falling dramatically since 2008, and part of the reason why balance of system manufacturers are now accounting for 68 percent of the total costs for the average PV project.
Even though balance of system is making up a higher percentage of project costs, overall prices have fallen. The report notes that non-module costs such as balance of system, labour, marketing, overhead, and inverters have all fallen significantly over time.
“The drop in non-module costs is especially important,” notes report co-author Ryan Wiser of Berkeley Lab’s Environmental Energy Technologies Division, “as these costs can be most readily influenced by local, state, and national policies aimed at accelerating deployment and removing market barriers.”
The median installed price of PV systems installed throughout 2011 was $6.10 per watt (W) for residential and small commercial systems less than 10 kilowatts (kW) in size, and was $4.90/W for larger commercial systems of 100 kW or more in size, whereas utility-sector PV systems which are larger than 2,000 kW in size averaged $3.40/W in 2011.
Report co-author Galen Barbose, also of Berkeley Lab, stresses the importance of keeping these 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.”
The authors of the report also believe that US PV prices will continue to drop as a result of large-scale deployment programs, but that other factors are also important in achieving installed price reductions.
There were variations in the PV system pricing when compared across states. The median installed price of PV systems less than 10 kW in size that were completed during 2011 ranged from $4.90/W to $7.60/W depending on which state they were being constructed in.
Additionally, the report shows that PV installed prices are good indicators of economies of scale, with the median price for systems smaller than 2 kW coming in at $7.70/W while the median price for a large commercial system greater than 1,000 kW in size was only $4.50/W. Utility-scale systems larger than 10,000 kW were even lower, with most systems ranging from $2.80/W to $3.50/W.
Sadly, as the cost of installed PV systems have fallen, so have the incentives. According to the report, the median pre-tax value of such cash incentives ranged from $0.90/W to $1.20/W for systems installed in 2011, depending on system size. But these numbers have decreased by roughly 80% over the past ten years, and by a massive 21-43% from just 2010 to 2011.
The report, Tracking the Sun V: An Historical Summary of the Installed Price of Photovoltaics in the United States from 1998 to 2011, by Galen Barbose, Naïm Darghouth, and Ryan Wiser, may be downloaded from: http://emp.lbl.gov/sites/all/files/LBNL-5919e-REPORT.pdf.
Source: Department of Energy’s Lawrence Berkeley National Laboratory
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