Solar System Prices Continue to Drop

Oct. 21, 2014

U.S. photovoltaic costs continue to decline.

The costs of solar energy dropped 12-19% nationwide last year, with prices expected to drop a further 3-12% in 2014, according to a report released by the DOE’s National Renewable Energy Laboratory and the Lawrence Berkeley National Laboratory. Market analysts expect the prices for photovoltaic installations to continue to decline at least through 2016, which would keep the U.S. on track to meet the DOE’s SunShot Initiative solar targets by 2020.

Commercial photovoltaic system (200kW) quoted prices saw a reduction of 3% from 2012 to 2013, from $2.61/W to $2.54/W. Also noted by Photovoltaic (PV) Pricing Trends: Historical, Recent, and Near-Term Projections (2014 Edition) is that reported system prices for commercial and residential installations dropped 12-13% between 2012 to 2013, which is double the average price drop between 1998-2012. 

The report shows wide variability in solar pricing, roughly a $2/W difference for installed residential and commercial photovoltaic systems between the median prices of the lowest- and highest-priced states. These are due to factors such as market size and maturity, incentives, sales taxes, administrative and labor costs, and specific project characteristics. 

“There appears to be an emerging consensus that the SunShot’s price reduction targets are within reach and more and more likely to be realized. We see this reflected in the fact that many of the current projections are far lower than projections made in the past by the same sources,” says David Feldman of NREL, lead author of the report. 

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