Clean Power

Published on December 6th, 2014 | by James Ayre

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Now’s The Time To Buy Into Community Solar Prices, At All-Time Low

December 6th, 2014 by  

If you’re considering buying into a community solar project/facility in the future, then you may want to hurry up and do so, based on a recent report from the National Renewable Energy Laboratory (NREL) and the Lawrence Berkley National Laboratory.

According to the report, the downward slope of residential/community-scale solar systems will continue through 2016, before then stabilizing (after perhaps rising a bit), so those interested would probably be advised to get going.

community solar

The report notes that throughout the 15 years preceding 2012, residential photovoltaic system costs fell by an average of 6% to 8% a year — this fall then picked up after 2012, with costs for solar systems under 10 kW in size falling by 12% or $0.65 per watt.

“There is still considerable uncertainty as to how low PV system prices will drop in the next five to 10 years,” noted David Feldman, the study’s lead author and NREL financial analyst in an interview with the Denver Business Journal.

As of the beginning of 2014, the average reported price for small solar systems was $4.50 a watt — which is down from $4.74 a watt in 2013.

These numbers mean that the goals of the US Department of Energy’s SunShot Initiative are looking quite achievable — the most notable goal is to make solar energy cost-competitive with most other sources of energy generation by 2020 (on a wholesale electricity basis). If this goal is achieved, that means that the cost of small solar PV systems will have fallen by 75% between 2010 and 2020.

Given that the initiative has now achieved 60% of its goal, the goal does certainly look to be achievable.


 

One of the initiative’s main efforts to accelerate solar deployment in the US has been through the support of community solar projects — thereby allowing solar energy to become available to those who can’t install systems on their property.

Clean Easy Energy provides more:

In October, SunShot awarded $700,000 to community solar developer Clean Energy Collective (CEC) to build a national online portal to help other parties develop their own successful community solar programs. Ultimately, the NCSP (National Community Solar Platform) will help drive down the cost of solar and facilitate the nationwide deployment and utilization of solar power.

With 16 shared solar projects online in Colorado alone—and more than 40 throughout the US—CEC’s community-owned solar model is gaining traction. Two new facilities in Denver were interconnected in August, offering Xcel Energy customers the ability to own solar panels in a centralized array for $3.70 per watt. In Boulder, the cost to buy panels in CEC’s second community-owned solar array is now $3.55 per watt. Both cities offer solar panels for around $.85 per watt less than NREL’s average installed price for the first half of 2014—without a single customer needing to replace a roof or cut down a tree.

Although the price of solar PV systems is anticipated to decline over the next several years, those with an electric bill from Xcel Energy will miss out on the biggest bang for their buck if they wait to purchase community-owned solar panels. This is because the payments that Xcel issues to its ratepayers for producing their own solar power (called Renewable Energy Credits or RECs) are set to expire as the investor-owned utility reaches its state-mandate for renewable generation.

While those recommendations are of course local to those in the service area of Xcel Energy, the broader point applies — while prices are likely to continue falling through 2016, as the report notes, many support and incentive programs are looking likely to expire without being renewed. So now is likely as good a time as ever to go solar!

Image Credit: NREL





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About the Author

'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. You can follow his work on Google+.



  • RobS

    Out of pocket costs in Australia are now ~$1.20 per watt. I see nothing presented that even remotely justifies the position that only small further falls from $4.50 per watt can be expected before prices start to rise again.

    • Ronald Brakels

      Without subsidy or our 10% Goods and Services Tax the average cost per watt for a median sized rooftop solar installation in Australia is now about $1.67 US. And note that’s not the lowest cost installations, that’s the average. Looking at James’s figure for Germany above Australia now appears to be leading the world, or the developed world at least, in low cost rooftop solar installation.

      • with a higher % of households having solar, i’d expect that.

      • JamesWimberley

        Two reasons why German’s (low) <100kw cost has been flat for a year. One, the market has collapsed, so economies of scale have been lost. Two, the EU's "anti-dumping" (= let's be nice to SolarWorld) agreement with China has put a floor under the price of modules, insulating Germans from Chinese productivity gains. Prices fall in growing, open markets.

        • Ronald Brakels

          Australia’s solar manufacturers have initiated an anti-dumping action here. All 25 of them. And when I say all 25 I don’t mean all 25 companies, I mean all 25 people who work in solar panel manufacturing. And when I say all 25 I don’t mean Australia has 25 people actually manufacturing solar panels, I’m including sales, marketing, management, etc. in that total. My father can’t even speak English and even he managed to employ more people that. Fortunately nothing has come of it so far, but I suppose it could always rear its ugly head and result in a few more Bangladeshi chidren being drowned.

          • What language does your father speak?

          • Ronald Brakels

            My father speaks Dutch and a bit of a couple of other languages and Double Dutch. What comes out of his mouth cannot in good conscience be called English. Once he said to me, “The other day I woke up in the middle of the night and I made some sausage rolls. One, two, tree, four, five, sex. They were all the same length but some were longer than others.” When I started laughing at him he got mad and said, “You think I’m a stupid Dutchman, don’t you? You think my brain is empty? Well let me tell you, my brain is stuffed!”

          • Lol. 😀

      • Will E

        Aussis get a 4 to 1 production from solar due to solar ray index which is very high in Australia. so solar is really 4 times cheaper in Australia.

        • Ronald Brakels

          No, we get maybe a third more sunshine than Germany does. Or at least for an optimally inclined panel we do. If one looks at sunshine hitting flat ground then we do a lot better than Germany. Note that Australian solar is basically all rooftop which operates at a lower capacity factor than utility scale solar which is about half of Germany’s capacity and rooftop solar is located where people live which is in the less sunny parts of the country to prevent dying.

  • harisA

    With retail hardware cost at around $2.00/watt, people who are charging $4.50 are either very inefficient or are making big bucks.

    No wonder roof top solar penetration is less than 3% of total capacity in California (Law allows 5% of the total power to be net metered). Although it is increasing every day.

    It is good that Solar City is now a player. Even better would be if some
    franchising company comes up with a streamlined and cost effective
    business model.

    i am sure installers will start bringing down prices once tax credit expiry date becomes imminent:-)

    It is doubtful that hardware prices will go up other than responding to some imbalances in supply and demand.

    • Will E

      change the law, a lot more penetration is no problem for the grid.

  • JamesWimberley

    Where does the NREL report (link, tut tut) suggest that system prices will rise after 2016? I think this is James’ own gloss on the probable (but not certain) expiry of the PTC.

    The report is based on a thorough analysis of data up to 2011. In solar, two years is a long time. I suggest we should place more weight on more up-to-date time series from say the SEIA, even if these are slightly lower quality. If you are trying to predict trends, incomplete data can still be used safely with prudence.

    It’s a sure thing that best practice spreads, and competition drives prices towards the cheapest available today, unless we have reason to think the sample is distorted (loss-leading, a supply glut). SolarCity declared its average installation cost in Q2 of 2014 as $2.29/watt (link), almost on a par with German prices (€1.64/watt, or $2.02)(link). Its competitors will have to match this or go out of business. $4.50/watt is history.

    • Will E

      when you look for Solar system prices on ALIBABA you find prices of 50 dollarcents a Kwh.
      Why dont US customers buy Solar systems like anything else on the internet for 50 dollarcents.

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