Clean Power

Published on January 14th, 2016 | by Adam Johnston


US Utility-Solar PV Costs Plummeted 17% In Q3 2015

January 14th, 2016 by  

US utility-scale solar PV costs plummeted 17% in Q3 of 2015, and declining PV costs are fuelling greater demand.

According to an EnergyTrend report, US utility-scale solar costs fell in the third quarter of 2015 to $1.38/W, compared to $1.66/W twelve months earlier.


Image Credit: Aston Field Solar Plant by Stausifr via WikiCommons (Some Rights Reserved)

Patrick Lin, an analyst with EnergyTrend, said the average cost for a global utility-scale system could drop an extra 15% on a year-to-year basis within 24 months. The average cost of a utility-scale solar PV system could reach $1.15/W this year, Lin said. Declining installation costs will push levelled costs of electricity (LCOE) in some areas to $0.07/kWh and under. This makes solar cheaper than coal plants and natural gas.

Factor in continuing efficiencies seen in solar PV products, and you can see LCOE prices will push further down. This, along with declining installation costs, will help fuel greater demand globally, EnergyTrend noted.

Since the start of 2015, utility-scale solar installed capacities in Chile, India, and the Philippines are 750 MW, 827 MW, and 134 MW. In 2016–2017, utility-scale solar will see increased demand returning to Southeast Asia, Latin America, and India.

Overall, this is another report which proves solar is gaining traction. Consider now that US utility-scale solar is 31 times greater than in 2005. It accounts for half a percent of US electricity production. Last June, US utilities reached a record for solar electricity, with 2,765 GWh — an increase of 35.8% from 2014.

Based on EnergyTrend’s report, it would not be surprising to see more record solar electricity generation and solar capacity additions from the US this year as prices fall, as well as around the world.

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About the Author

is expected to complete the Professional Development Certificate in Renewable Energy from the University of Toronto by December 2017. Adam recently completed his Social Media Certificate from Algonquin College Continuing & Online Learning. Adam also graduated from the University of Winnipeg with a three-year B.A. combined major in Economics and Rhetoric, Writing & Communications in 2011. Adam owns a part-time tax preparation business. He also recently started up Salay Consulting and Social Media services, a part-time business which provides cleantech writing, analysis, and social media services. His eventual goal is to be a cleantech policy analyst. You can follow him on Twitter @adamjohnstonwpg or check out his business

  • Freddy D

    Future milestone to look for: when new solar is cheaper than marginal operating costs for EXISTING coal plants. Probably closer to $0.04/kWh. That will disrupt the market even further.

    • Tim

      Existing US coal plants total 600. BUT that doesn’t include plants that call themselves steam plants like Colstrip Steam Plant, which is one dirty plant consuming MASSIVE amounts of coal.

  • Bob_Wallace

    Here’s the GTM/SEIA data for the last four years ending with Q3 2015.

    From Q3 2012 to Q3 2013 utility solar fell 15%. Then to Q3 2014 utility fel 18.6%. And to Q3 2015 prices dropped 16.9%. An average of 16.8% annually over 3 years.

    Keep this up two more years and we see the magic $1/watt.

    BTW, commercial solar is coming down rapidly as well. Look for a lot of businesses installing.

    • Martin

      Are the incentives in the US the same for utility scale solar the same as for residential solar?
      Looking at the price difference of $ 1.38/W, utility, as compared (according to your chart above) of $ 3.50/W for residential.

      • Bob_Wallace

        Residential solar gets a 30% tax credit. Utility can either take the 30% tax credit or opt for a 2.3c/kWh tax credit for electricity produced during the first ten years of operation.

    • Freddy D

      Big parking lots sure look compelling. I don’t know the economics of canopy structures though. Since they’re not being installed like crazy, those canopies must be expensive.

      • Martin

        So do the flat roofs of commercial buildings, look compelling to solar installs.
        If half of those in the US would have solar roofs and say half of the parking lots, how would that fare with the square of the total solar needs for the US?

      • JamesWimberley

        It looks from the chart as if the premium for commercial over utility dropped sharply at the end of 2013, and is now a reasonable 20-30%. There have been a lot of hurdles to overcome: non-standard sites, fragmented ownership, financing packages, management time. But as these are resolved, expect commercial to steam ahead. As you say, car parks.

  • jburt56

    When the scale grows to gigawatts the cost declines to buck a watt.

  • Frank

    If that $1.15 comes true, then the price drop from $1.66 will be more than the 30% ITC. This is really good news for solar, though I still think that keeping smokestack and tailpipe emissions free when it isn’t actually, is a market distortion that encourages a bad outcome. To everyone who is afraid of a tax like that, understand that it would be temporary because of switching, and would bring many benefits, that would be lucrative, unless you have coal interests, because they would become worthless.

  • JamesWimberley

    The photo is of a plant from the Indian developer Astonfield. Note that it has preserved vegetation under the panels, which is good for wildlife and water conservation. In the UK, there are numerous examples of plants with sheep grazing, poultry, and flowers for bees. American developers please copy! A burrowing owl or Gila monster is not going to eat your cables.

    • Roger Lambert

      That’s a great point. Environmentalists speak of protecting desert ecosystems from solar development, and many actively work against power projects, but solar development might be beneficial to desert wildlife.

      • JamesWimberley

        Quite. The shade adds diversity to the habitat. I imagine the undersides of the panels might act as dew collectors.

      • Tim

        If more environmentalists worked against solar, we could have desert ecosystems cover more of earth mighty quickly! Plus dead humans and permanently flooded coasts. Always fascinates me how many people seem to fail to grasp the entirety of our situation right now.

    • eveee

      Solar seems almost the same as wind for grazing. Little effect on land use. People forget that grass grows under solar panels. It doesn’t need direct light. And the sheep seem to prefer its shade.

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