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Published on October 10th, 2014 | by James Ayre

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Installed Solar Power Prices Continue To Drop In US, Still Much More Expensive Than In Germany

October 10th, 2014 by  


The installed price of solar energy in the US is continuing to decrease steadily, but is still considerably more expensive than it is throughout much of Europe, according to the most recent Tracking the Sun report from the Lawrence Berkeley National Laboratory (LBNL).

US solar PV capacity growth

That report — Tracking the Sun VII — utilized data from more than 300,000 different residential, commercial, and utility-scale solar installations to deduce the current installed price of solar across the US. Altogether, the sample size accounts for roughly 80% of the US grid’s total solar PV capacity through 2013.

The main takeaway from the report is best stated in its own words: “Installed prices continued their precipitous decline in 2013, falling year-over-year by $0.7/W, or 12-15% depending on system size range. Among projects installed in 2013, median installed prices were $4.7/W for systems ≤10 kW, $4.3/W for systems 10-100 kW, and $3.9/W for systems >100 kW.”

There are other things worth noting though, including the previously mentioned reality that, even with the price falling, solar is still far more expensive in the US than it is in most of Europe. Here are the figures on that subject from the report: “The median installed price of residential PV installations in 2013 (excluding sales/value-added tax) was just $2.1/W in Germany, $2.7/W in the United Kingdom, $2.9/W in Italy, and $4.0/W in France, compared to $4.4/W in the United States.”

installed solar PV price by country

I suppose France has the excuse that the nuclear industry in the country still has too much clout. What the US’s excuse?

As to the low prices in Germany, that’s a subject that’s been discussed a great deal already, so I’ll just leave a short summary here: the cheaper prices are largely the result of a much more supportive policy environment on the permitting side and much greater market maturity leading to easier customer acquisition and more competitive financing.


 

Sustainnovate provides a bit more:

Also worth noting is that there’s a lot of variation in price by state, for similar reasons as mentioned above regarding countries. “Among ≤10 kW systems completed in 2013, median installed prices ranged from a low of $3.3/W in Florida to a high of $5.3/W in North Carolina. California, which constitutes a large fraction of the data sample and therefore heavily impacts the aggregate price trends, is a relatively high-priced state, with a median price of $4.9/W for ≤10 kW systems in 2013.”

There are many interesting findings and data presented in Tracking the Sun VII, and LBNL does an excellent job summarizing it in bullet points in the beginning.

Here are some of the highlights of the report, visualized clearly via some charts from LBNL:

The price trend 1998 to 2013:

installed solar power price over time

solar PV price trends 2013

 

Preliminary data of the price trend for the first half of 2014:

1 H 2014 solar power prices

 

Economies of scale in action:

installed solar PV price by system size

 

Solar modules from China are cheaper (for now):

chinese solar vs non chinese solar PV prices

The difference in cost between third-party owned and conventional, customer-owned solar is quite interesting and surprising. There’s actually almost no difference, despite the widely held assumption that third-party owner solar is much more expensive. “Third-party owned solar is associated with very slightly higher prices up to 100 kW, but then slightly lower prices for projects above 100 kW of capacity,” Sustainnovate notes. Here’s the chart:

third party owned solar prices

 

Microinverters provide a similar but more dramatic flip flop:

microverters solar price

 

Interesting findings. The full report from the Lawrence Berkeley National Laboratory can be found here.

Image Credits: LBNL 
 
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About the Author

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.



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