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

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).

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.”

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:

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

Economies of scale in action:

Solar modules from China are cheaper (for now):

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:

Microinverters provide a similar but more dramatic flip flop:

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

Image Credits: LBNL