Study shows decline in installed costs of solar PV power systems in U.S.

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

A new study on the installed costs of solar photovoltaic power systems in the U.S. shows that the average cost of these systems declined significantly from 1998 to 2007, but remained relatively flat during the last two years of this period.

“Tracking the Sun: The Installed Cost of Photovoltaics in the U.S. from 1998–2007” was written by Ryan Wiser, Galen Barbose, and Carla Peterman, researchers at the Department of Energy’s Lawrence Berkeley National Laboratory. They say that the overall decline in the installed cost of solar PV systems is mostly the result of decreases in nonmodule costs, such as the cost of labor, marketing, overhead, inverters, and the balance of systems.

“This suggests that state and local PV deployment programs—which likely have a greater impact on nonmodule costs than on module prices—have been at least somewhat successful in spurring cost reductions,” according to the authors, who work at the lab’s Environmental Energy Technologies Division.

Installations of solar PV systems have grown at a rapid rate in the U.S., and governments have offered various incentives to expand the solar market. “A goal of government incentive programs is to help drive the cost of PV systems lower. One purpose of this study is to provide reliable information about the costs of installed systems over time,” said Wiser.

The study examined 37,000 grid-connected PV systems installed between 1998 and 2007 in 12 states. It found that average installed costs, in terms of real 2007 dollars per installed watt, declined from $10.50 per watt in 1998 to $7.60 per watt in 2007, equivalent to an average annual reduction of 30 cents per watt, or 3.5% per year in real dollars.

The researchers found that the reduction in nonmodule costs was responsible for most of the overall decline in costs. This trend, along with a reduction in the number of higher-cost “outlier” installations, suggests that state and local PV-deployment policies have achieved some success in fostering competition within the industry and in spurring improvements in the cost structure and efficiency of the delivery infrastructure for solar power.

The study revealed other information about differences in costs by region and by installation type. The cost reduction over time was largest for smaller PV systems, such as those used to power individual households, and installed costs also show significant economies of scale. Systems completed in 2006 or 2007 that were larger than 750 KW averaged $6.80 per watt, while those less than 2 KW averaged $9.00 per watt.

Installed costs were also found to vary widely across states. Among systems completed in 2006 or 2007 and less than 10KW, average costs range from a low of $7.60 per watt in Arizona, followed by California and New Jersey, which had average installed costs of $8.10 per watt and $8.40 per watt, respectively, to Maryland’s high of $10.60 per watt.

Based on these data, and on installed-cost data from the Japanese and German PV markets, the authors suggest that PV costs can be driven down through sizable deployment programs.

New construction market offers cost advantages for residential PV systems, according to the study. Among small residential PV systems in California completed in 2006 or 2007, systems installed in residential new construction cost 60 cents per watt less than comparably sized systems installed as retrofit applications.

The study also found that direct cash incentives offered by state and local PV incentive programs declined over the 1998-2007 study period. Other sources of incentives, however, have become more significant, including federal incentive tax credits (ITCs). As a result of the increase in the federal ITC for commercial systems in 2006, total after-tax incentives for commercial PV were $3.90 per watt in 2007, an all-time high based on the data analyzed in the report. Total after-tax incentives for residential systems, on the other hand, averaged $3.1 per watt in 2007, their lowest level since 2001.

Because incentives for residential PV systems decreased over this period, the net installed cost of residential PV has stayed relatively flat since 2001. At the same time, the net installed cost of commercial PV has dropped — it was $3.90 per watt in 2007, compared to $5.90 per watt in 2001, a drop of 32 percent, due in large part to the federal ITC.

The research was supported by funding from the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (Solar Energy Technologies Program) and Office of Electricity Delivery and Energy Reliability (Permitting, Siting and Analysis Division), and by the Clean Energy States Alliance.

19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?
26 August 2021
In this webinar, JA Solar will present its product portfolio based on the latest technologies to improve your PV projects, ensuring maximum reliability and performance. During the webinar we will receive insight from JA Solar about its solar technology roadmap and how the manufacturer is providing customers with innovative solutions to suit their needs, while we will also analyse how to determine the best product solution for each solar project.
6 September 2021
The 38th European Photovoltaic Solar Energy Conference and Exhibition will be held online from 6 - 10 September 2021, allowing PV experts from all around the globe to participate with just one click! The EU PVSEC is the world's leading forum for PV Research and Development and the biggest Conference on PV Solar Energy worldwide. That is why PV experts from all around the globe are keen on gathering together each year to be part of this specialist’s event, to present and discuss the latest developments in Photovoltaics, to network and to conduct business.

Read Next

July 29, 2021
Tracker and racking provider Arctech has delivered SkySmart II tracking system to a 575MW agriculture-sharing solar project located in Nangong City, Hebei Province, China.
July 29, 2021
Unigreen Energy, owned by Hevel majority shareholder Ream Management LLC, has broken ground on a wafer and cell manufacturing plant that will produce 1.3GW of silicon n-type monocrystalline ingots and wafers as well as 1GW of heterojunction technology (HJT) solar cells.
July 29, 2021
Meyer Burger has revealed plans to launch a solar roof tile product, expanding its rooftop solar product range.
July 29, 2021
US residential solar installer SunPower has partnered with EV charging provider Wallbox to add EV charging technologies to its portfolio.
July 29, 2021
US residential solar installer Sunnova said it was investing in its end-to-end solar services to cater for customers demanding more from their rooftop installations.
July 29, 2021
The US Senate has passed a new bipartisan infrastructure bill after weeks of protracted discussions, establishing US$550 billion in new infrastructure funding as part of an investment described as “once-in-a-generation”.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
BRISTOL, UK