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Solar Implementation Prices Drop

Sept. 18, 2014

A new study suggests that the installed cost of photovoltaic solar power continues to drop in the U.S.

The price of photovoltaic solar power for commercial applications is continuing to decline, says a report from the Department of Energy's Lawrence Berkeley National Laboratory. The study, Tracking the Sun, finds that installed prices have dropped 12-15% by year depending on the type and scale of the system. 

Mentioning the economy of scale, the report shows that systems with less than or equal to 2 kW of capacity have a significantly higher installed price at $4.8/W than those with larger commercial systems with greater than 1,000 kW of capacity's median installed price of $3.1/W, though price ranges continue to decrease. The study also notes that photovoltaic module prices have remained largely stagnant while other costs have been the main driver behind the drop in installed price. Non-module costs such as inverters, mounting hardware, overhead, and taxes have fallen substantially since 1998, which is responsible for up to 42% of the reduction in installed prices. 

"The fact that system prices have continued to fall, despite the flattening of module prices, suggests that the various initiatives targeting soft costs are beginning to bear fruit," says Naim Darghouth, one of the study's authors. 

From a consumer standpoint, the research finds that cash incentives provided through state and utility photovoltaic programs have decreased 85-95% over the past ten years – offsetting between 40-50% of the drop in installed prices. While the price of solar installation is dropping in the U.S., more progress is certainly possible as American prices are significantly higher than those in Germany, the UK, Italy, and France. Costs also vary widely based on geographic location within the U.S. The full study is available here

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