Solar is getting cheaper by the minute

Posted by Pete Danko, EarthTechling

Cheaper by the minute: That seems to be the story with solar photovoltaics in the United States these days.

According to a new report from government scientists, the cost of installed PV fell another 30 to 90 cents per watt in 2012, putting the median price for residential and small commercial systems – those under 10 kilowatts – at $5.30/watt.

Tracking the Sun solar cost

image from “Tracking the Sun”

“This marks the third year in a row of significant price reductions for PV systems in the U.S.,” Galen Barbose of Berkeley Lab’s Environmental Energy Technologies Division, one of the co-authors of the annual Tracking the Sun report, said in a statement.

And the decline appears to be continuing apace this year, according to the researchers: “Within the first six months of 2013, PV system prices in California fell by an additional 10 to 15 percent, and the report suggests that PV system price reductions in 2013 are on pace to match or exceed those seen in recent years.”

Utility-scale systems are also becoming cheaper. “Utility-scale systems installed in 2012 registered even lower prices, with prices for systems larger than 10,000 kW generally ranging from $2.50/W to $4.00/W,” the researchers said.

The report emphasized that there’s a lot of variability in prices depending on where the installation is going in as well as the nature the PV application and how the system is configured. But overall, the continuing decline in module prices – that’s the panels themselves – is certainly exhibiting downward pressure on overall installed system costs.

Now if only something could be done about the costs of the rest of the system and the installation.

“Non-module costs—such as inverters, mounting hardware, and the various non-hardware or ‘soft’ costs—have also fallen over the longterm but have remained relatively flat in recent years,” the researchers said. “As a result, they now represent a sizable fraction of the total installed price of PV systems. This shift in the cost structure of PV systems has heightened the emphasis within the industry and among policymakers on reducing non-module costs.”

Indeed, that is a chief goal of the Obama administration’s SunShot program, the effort to drive down the cost of solar to the point where it’s at a par with conventional sources.

Tracking the Sun, a 70-page PDF, can be downloaded for free here.

Pete Danko, EarthTechling