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Published on October 15th, 2015 | by Joshua S Hill

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US Residential & Small-Scale Commercial Solar Averages Installation Costs Of $3.79/W

October 15th, 2015 by  


Originally published on Solar Love

New figures from EnergySage show that solar installation costs in the US for the first half of 2015 averaged around $3.79 per watt.

EnergySage-1This is one of the primary conclusions from EnergySage’s new 2H 2014-1H 2015 EnergySage Solar Marketplace Intel Report, published this week, and focused on investigating the residential and small-scale commercial solar market. EnergySage bills the report as “a complement to the quarterly research produced by GTM Research and Solar Energy Industry Association, which centers more on industry-wide macroeconomic trends.”

Furthermore, EnergySage bills the insights gleaned from its EnergySage Solar Marketplace — the backbone of EnergySage’s data gathering — as “so exclusive that leading research and academic institutions such as National Renewable Energy Laboratory, Lawrence Berkeley National Laboratory, Solar Electric Power Association, and the University of Texas have all leveraged EnergySage data for their own research and analysis.”

“The residential solar market is a vibrant $7 billion industry, and on track to generate more revenue by year-end 2016 than Major League Baseball,” said EnergySage CEO Vikram Aggarwal. “The economics of solar are rapidly changing for solar shoppers, installers, and financiers alike. As demonstrated by the data within our Solar Marketplace Intel Report, it’s becoming more affordable for US households to adopt solar.

“And, with the increasing consumer adoption of marketplace solutions like EnergySage, it’s also becoming easier for solar installers and financiers to find their customers.”

Solar is serving to meet 85% of solar homeowners’ electricity needs in 2015, with an average 7.9 per kilowatt system generating about $2,000 worth of electricity annually.

Interestingly, EnergySage found that 90% of solar shoppers using EnergySage’s Solar Marketplace elected to own their system outright from the get-go, rather than leasing it — choosing to either pay in cash or finance with a solar loan, rather than sign up for a third-party lease or Power Purchase Agreement (PPA).

 

EnergySage-2






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About the Author

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.



  • Carl Baxter

    After reading all comments I’ve concluded that the only point most of you are worried about is initial cost. If you are so worried about cost than solar is not really for you. It’s like looking at a BMW and you only make Honda money. Look at the overall savings of owning a system VS initial cost. The payoff for owning a system that cost $3.00 W or $4.00 W is incredible! If you really want a system just get one and stop crying over the cost! You didn’t want to purchase a system 5 years ago when a system cost exceeded $100k now that it’s affordable you want to penny pinch a few bucks. Think of it as an investment that gets better over time and if the good Lord gives you 20 to 30 more years here, than just purchase a system for crying out loud. If not, than you have given your children a lifelong saving system. Solar energy is awesome and we will always own a system as long as we have a roof and the savings are 30% + .

  • Ivor O’Connor

    Seems the consensus is that EnergySage vendor prices are crazy high. How should one go about finding solar without being bombarded by snake oil salesmen trying to wear you down?

    • Otis11

      Here’s been my path:

      Step 1, call solar city.
      Step 2, laugh them out the door after seeing their quote and go to google.
      Step 3, go down the list requesting quotes. Have had 3 installers come by to make a bid. All 3 assure me they can handily beat the solar city quote, but all 3 are booked for the next month (a good sign I take it). Supposed to get quotes sometime this week though…

      • Ivor O’Connor

        Around here the used car salesmen try to bore you to death with 90 minutes of mandatory sales pitches hoping you’ll just say yes to get rid of them. Basic are you in the ball park quotes should be doable over the phone in five minutes with them looking at a satellite picture and you answering basic questions. Yet these solar bozos are worse than used car salespeople.

        • Otis11

          Well, none of that – just came to inspect the roof, answer questions, gather information, etc.

          One got back with the quote today – $1.30/Watt. Uses Hanwha Q-Cells Q.Pro BFR-G3 260 panels, which are a little lower efficiency than I would have liked, making the system slighly smaller than I would have prefered and leaving no south facing roof for later expantion… but overall, not a bad offer IMO. We’ll see what other offers I can get in the next 30 days.

          • Ivor O’Connor

            Just got the second quote through EnergySage and it was much better using 25 year Enphase micro inverters but still $3.14 a watt.

            I’m thinking I’ll give EnergySage vendors a week and if there’s nothing at around $2.50/Watt before ITC I will start calling local contractors being very explicit about what I expect to give them a chance to make some honest money.

          • Bob_Wallace

            Otis, Ivor – hope the two of you keep good notes. After you’ve your systems installed we might get a good article on your experience. Could serve as a guide for others trying to work their way through the system.

          • Otis11

            Best of luck!

  • vensonata

    $3.79! Something is off here. I thought the average in 2014 was $3.42 watt installed residential. Anyway, the price is ludicrous. At that price it wouldn’t matter if the entire hardware system including panels was free, the soft costs alone would exceed Australian fully installed, all in, prices. If the Aussies can install for $1.60 watt including labor, (at higher than U.S. wages), what can one say? There is nowhere to hide with the rationalizations. So price reductions in inverters, panels, wiring etc, etc, just mean nothing if the rest of the fat remains.
    3.79 – 1.60 = 2.19, At $2.19 watt of inscrutable missing dollars that is enough to buy a fully installed German system. So we can combine the Australian and the German system and have twice the system installed for the price of one American system.

  • Bryan

    $3.79 per watt is ridiculously high in today’s market. The market reached sub $3.00 a watt months ago.

    • Ivor O’Connor

      Where did you see under $3/Watt?

  • Marion Meads

    Solar City which takes the Lion Share of the Solar Installation in America are charging $5.10/Watt before federal tax credits, and the owner’s cost is published at $3.57/Watt.

    Is EnergySage average installation costs of $3.79/Watt before or after Federal Tax Credits?

    When I shop around for an A rated installers at BBB, I get anywhere from $3.00-$3.50/Watt before any rebates or incentives. Along with the federal tax credit and property tax deductions via HERO financing, the net effective cost would be about $1.00-$1.40/Watt installed!

    • Bryan

      Sounds to me like energy sage is just trying to promote their higher priced dealer network.

    • Ivor O’Connor

      I’ve never used the BBB in such a manner. You make it sound like you can find the price per Watt of many installers without leaving the BBB site. Could you explain the steps involved?

    • Otis11

      Care to suggest an installer in Dallas, texas? I’ve been actively shopping and am getting better quotes, but notthing as low as you’re quoting yet. Would love to find one!

  • Ronald Brakels

    Dudes! Come on! It is $1.68 US a watt in Australia for residential rooftop solar before tax or subsidy. And larger sized commercial rooftop solar is considerably less.

    I suppose the good news is, you’ve got a lot of room for improvement there before you reach the developed world’s best practice.

    • Necro Nomaken

      It’s okay to just say “reach the developed world”, americans coming to this website know where we’re at.

    • Michael G

      Which raises two questions.
      1. Why is the competitive market not working in the US?
      2. Where does all the excess cost in the US come from?

      • Ronald Brakels

        There are lots of things I could speculate on, but I think a couple of main points are:

        (1) Set up incentives so that people with the right circumstances can save money. This attracts customers who are just interested in saving money and not just first adopters who are happy to spend more to get new technology to help protect the environment. Because these people are looking to save money they will shop around and encourage installers to compete on price.

        (2) The magic of the many small. When it comes to driving down costs it is far better to install six small 1.5 kilowatt rooftop solar systems than one large 9 kilowatt system. The smaller systems mean 2 person teams can install them and they get six times as much experience in installation as with one 9 kilowatt system. Then there are six times as many people with solar spreading the word to their friends and neighbours and beating up business so time and money doesn’t have to be spent aquiring customers.

        Australia has a vast number of small 1.5 kilowatt systems that exist because small systems used to receive a greater subsidy.

      • Bob_Wallace

        My understanding is that a large amount of the higher cost for US residential is “customer acquisition”. It costs a lot of money to sell solar to people.

        In Germany they removed customer acquisition costs by setting a high FiT. As soon as people found out they could make significant profits by installing solar, solar was sold. Customers contacted installers.

        In Australia they removed customer acquisition costs by making the cost of grid power very expensive. As soon as people found out they could save …….

        In the US the payoff is lower. Companies have salespeople out walking the streets, knocking on doors, trying to sell solar to people.

        • Michael G

          Makes sense.

          I’ve read that the best predictor of whether someone is going to get solar is whether they know someone that has solar. Once you reach a critical mass, I guess it takes off by itself.

      • Hurrya

        It’s not a competitive market in most of the US, it’s not a market yet. California still accounts for most of solar. In the rest of the country, utilities and by extension local and state government are still creating barriers against solar and renewables.

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