NREL report highlights 20% cost reduction in US utility-scale solar installations

Facebook
Twitter
LinkedIn
Reddit
Email
The largest cost declines were modelled in the utility-scale sector, which achieved cost reductions of 20%. Image: First Solar

The US Energy Department's National Renewable Energy Laboratory (NREL) has highlighted continued PV system cost reductions in its latest quarterly report, ‘US Solar Photovoltaic System Cost Benchmark Q1 2016’. 

The NREL study noted that modelled costs to install PV systems continued to decline in the first quarter of 2016 in the US residential, commercial, and utility-scale sectors.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

Not ready to commit yet?
  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Costs declined quarter-on-quarter by 6% for residential system installs and 4% for commercial rooftop systems in the first quarter of 2016, compared with the fourth quarter of 2015.

However, the largest cost declines were modelled in the utility-scale sector, which achieved cost reductions of 20%.

NREL noted in the study that the significant cost reductions quarter-on-quarter were due to “the large difference between Q1 2015 and Q1 2016 in the utility-scale sector is caused by amplifying economies-of-scale impacts on EPC contractor and developer costs”.

According to NREL, this was due to ‘more aggressive economies of scale applied on EPC and developer costs to reflect labour productivity, construction logistics, bulk price, and discounted developer overhead for larger systems’. 

The study showed that costs fell to US$2.93/W (per watt) of direct current (Wdc) for residential systems, US$2.13/W for commercial systems, and US$1.42/W of direct current for utility-scale systems for fixed-tilt utility-scale systems, and US$1.49 Wdc for one-axis-tracking utility-scale systems. Image: NREL

The study showed that costs fell to US$2.93/W (per watt) of direct current (Wdc) for residential systems, US$2.13/W for commercial systems, and US$1.42/W of direct current for utility-scale systems for fixed-tilt utility-scale systems, and US$1.49 Wdc for one-axis-tracking utility-scale systems.

“The continuing total cost decline of solar PV systems demonstrates the sustained economic competitiveness of solar PV for the industry across all three sectors,” said NREL Senior Analyst and Project Lead, Ran Fu.

Of course the NREL study takes time to produce and does not yet reflect the significant PV module price declines seen since the end of the second quarter due to weak end-market demand in China and overcapacity returning across the supply chain. 

The full technical report can be downloaded here and the presentation here.

Read Next

August 22, 2025
AEMO has predicted the NEM will see a steady rise in renewable energy generation capacity, reaching 229TWh by 2035.
August 21, 2025
JA Solar's CTO, Zi Ouyang, discusses the company's latest module technologies and why the future is tandem.
August 21, 2025
National Thermal Power Corporation (NTPC), through its renewable energy arm NTPC Green Energy, has commissioned 212.5MW of solar capacity at its 1.25GW Khavda-I project. 
August 20, 2025
Blueleaf Energy has signed an MoU with Chemsain Sustainability to explore a portfolio of up to 3GW of solar PV and BESS in Malaysia.
August 20, 2025
USDA has announced that new wind and solar projects on agricultural land will not be eligible for two federal loan programmes.
August 20, 2025
The consortium building the Al Sadawi PV power plant in Saudi Arabia has reached financial close on the 2GW project.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK
Solar Media Events
October 2, 2025
London,UK
Solar Media Events
October 7, 2025
Manila, Philippines