In it’s fifth annual “Tracking the Sun” report, the Department of Energy’s Lawrence Berkeley National Laboratory determined that the price of installed solar has continued to fall, largely because of price drops in the cost of photovoltaics. While the report also found falling prices in the soft costs of solar they were not nearly as large as the drops in PV modules.
The raw (pre-incentive) costs of photovoltaics continued the downward trend they’ve been on for the last few years, according to the report. It found the average installed price of residential and commercial PV systems completed in 2011 fell between 11 percent and 14 percent compared to 2010. In California prices fell 3 percent to 7 percent more than in other states within the first six months of 2012. The median installed price of PV systems installed in 2011 was $6.10 per watt for systems under 10 kilowatts in size. Commercial installations over 100 kilowatts had an average price of $4.90 per watt, and utility-sector PV systems over 2 megawatts cost $3.40 per watt.
The PV price drops have been continual over the past few years and that’s not expected to change in 2012. “The report does not really show any slowing in the rate of PV price declines, as the declines we saw in 2011 were roughly on par with the previous year, and the preliminary numbers for 2012 show a similar pace of decline,” said report co-author Galen Barbose. “That said, much of the recent declines can be attributed to falling module prices, and there are limits as to how much further module prices can drop.”
While the prices have continued to drop most sharply on the module side, there’s bigger opportunities for price drops in the soft costs of solar, Barbose said. “If price declines are to continue at the same pace beyond, say, 2012 or 2013, then those declines will largely need to come from the soft cost side,” he said. “The fact that PV system prices in Germany are so much lower than in the U.S., though, does seem to suggest that substantial soft cost reductions in the U.S. are possible.”
However, the report wasn’t focussed much on the opportunity for soft-cost reductions, according to Barbose. “Though there have been a number of recent reports by both LBNL and NREL that seek to at least quantify individual soft costs—though none of them necessarily go so far as to evaluate cost reduction potential,” he said. The lab, however, plans to release updated information about the German solar market and its soft costs compared to the U.S.