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Price Of US Distributed Solar Fell 10-20% In 2014, Trend Continuing In 2015

The price of installed distributed solar PV systems in the US has fallen dramatically in 2014, and the Department of Energy’s Lawrence Berkeley National Laboratory expects that trend to continue into 2015.

Figures at the heart of Berkeley Labs’ latest edition of Tracking the Sun show that the installed price of distributed solar PV in the US for residential and small non-residential systems completed in 2014 was $0.40 per-watt lower than in 2013 (percentage declines of 9% and 10% respectively), and prices for large non-residential systems were $0.70 per-watt lower (a 21% decline on 2013 levels).

“This marked the fifth consecutive year of significant price reductions for distributed PV systems in the U.S.,” notes Galen Barbose of Berkeley Lab’s Electricity Markets and Policy Group, and the lead author of the report.

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This trend is also expected to continue, if figures from the first half of 2015 are anything to go by, with installed prices within a number of large US state markets falling by an additional $0.20 to $0.50 per-watt.

The steady decline in distributed solar has not been attributed to the cost of the systems themselves, with Berkeley Labs instead attributing the decline in “soft” cost reductions — ie, things such as marketing and customer acquisition, system design, installation labor, and permitting and inspections. The authors of the report conclude that “soft cost reductions are partly due to steady increases in system size and module efficiency, though likely also reflect a broad and sustained emphasis within the industry and among policy-makers on addressing soft costs.”

Interestingly, despite this continuing decline in price, the authors of the report still conclude that the “installed prices in the United States are higher than in most other major national PV markets.” Specifically, the installed prices for residential and non-residential systems less than 500 kW in size are substantially lower in other key solar markets, including Germany, China, and Australia — a disparity that the authors believe can be “primarily attributable to differences in soft costs.”

There is also a high level of price variability in PV system pricing across the US market. For example, among residential systems sold in the US in 2014, 20% sold for less than $3.50 per-watt, while another 20% sold for more than $5.30 per-watt — and there is a similar variability in pricing amongst non-residential systems as well.

“This variability reflects a host of factors: differences in system design and component selection, market and regulatory conditions, and installer characteristics, to name a few,” explained Berkeley Lab’s Naïm Darghouth, another of the report’s authors.

The report, Tracking the Sun VIII: The Installed Price of Residential and Non-Residential Photovoltaic Systems in the United States, is the eighth edition in Berkeley Lab’s Tracking the Sun report series.

 
 
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