US Solar Installation Costs Declined In 2017, Little Progress So Far In 2018

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The eleventh edition of Berkeley Lab’s Tracking the Sun report published this week shows that the installed price of solar continued to fall across the country in 2017 but only saw small declines through the beginning of 2018.

Published by the US Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab), the eleventh edition of its Tracking the Sun report details the installed prices and other trends of the solar PV industry in the United States based on a dataset of over 1.3 million solar PV systems (and transaction prices for 770,000 systems). This eleventh edition focuses specifically on trends through year-end 2017 and adds preliminary data for the first half of 2018.

According to the report, the national median installed price of solar PV in 2017 was $3.7 per watt (W) for residential systems, a $0.2/W or 6% decline from 2016. For small non-residential systems, the price was $3.1/W, down $0.4/W or 11%, while large non-residential systems were $2.2/W, a $0.1/w or 5% decline.

Through the first half of 2018, Berkeley Lab’s data showed there was an additional drop of $0.1/W for residential and small non-residential systems, and effectively no change to the cost of large non-residential systems. While the authors of the report declined to comment on the specifics, the impact of the tariff on imported solar cells and modules imposed in January might be the reason for the stagnant movement over the first half of the year.

Overall, however, Berkeley Lab concludes that the figures are “generally consistent” with the pace of solar PV price declines since 2014. Unfortunately, the price declines seen since 2014 pale in comparison to the declines seen between 2009 and 2013, when prices fell by roughly $1/W per year.

As can be seen, for residential solar projects, the total $8/W long-term decline in median residential system pricing was made up of:

  • ~46% associated with falling module prices
  • ~12% with falling inverter prices
  • ~42% with the collective assortment of balance of systems (BoS) and soft costs

This is not the whole story, however, as the data also showed that there were wild variations between individual residential solar projects, with 20% priced below $3.0/W (the 20th percentile) while another 20% were above the 80th percentile at $4.5/W. The same was true for non-residential systems which swung from $2.4/W to $4.1/W for small non-residential systems and from $1.8/W to $2.8/W for large non-residential projects.

There are also significant pricing disparities across state lines, with the state-level median installed prices for 2017 ranging from $2.6/W to $4.5/W for residential systems, from $2.2/W to $4.0/W for small non-residential systems, and from $2.1/W to $2.4/W for large non-residential systems. The report also found that three of the largest state markets — California, Massachusetts, and New York — have relatively high-priced project costs, dragging the overall US median price upwards.

“Pricing variability across projects partly reflects differences in system size and design (e.g., choice of module technology), as well as attributes of the individual installer (e.g., firm size and experience) and whether the system is host-owned or third-party owned,” explained Berkeley Lab’s Galen Barbose to me via email. “Underlying differences in the market, policy, and regulatory environment also can strongly impact prices, though those effects are much harder to pinpoint. A number of other studies have shown, for example, how PV system prices can differ quite a bit from project to project depending on the level of competition among installers, local labor costs, incentive levels, and permitting and interconnection processes. Naturally, many of these factors vary from state to state, which also explains some of the pricing differences across states.”

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Joshua S Hill

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 (, and can be found writing articles for a variety of other sites. Check me out at for more.

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