Solar Prices Still Falling Fast, Study Finds

solarSolar prices continue to drop, according to the findings of a joint report by National Renewable Energy Laboratory (NREL) and Lawrence Berkeley National Laboratory (LBNL). Distributed solar photovoltaic (PV) system prices decreased by 12 to 19 percent nationwide in 2013. Prices in 2014 are expected to drop by another 3 to 12 percent — and this trend is expected to continue through 2016.

PV system prices of residential and commercial systems dropped by 6 to 7 percent per year from 1998 to 2013 — and by 12 to 15 percent from 2012 to 2013. Market analysts expect system prices to continue to drop. The Department of Energy SunShot Initiative aims to reduce PV system prices by 75 percent from 2010 to 2020.

Other findings in the report include:

  • Prices for residential systems (5 kilowatts) dropped by 12 percent from the second quarter of 2012
  • Prices for commercial systems (200 KW) dropped by 3 percent from the second quarter of 2012
  • Utility scale prices dropped by 5 percent from the second quarter of 2012
  • From 2012 to 2013, prices for systems bigger than 10 KW dropped by 12 percent and by 15 percent for systems greater than 100 KW
  • The median reported prices dropped by roughly 5 to 12 percent during the first half of 2014 across the three size ranges
  • Global annual average module prices increased by 7 cents per watt from 2012 to 2013

A report by the Solar Energy Industries Association for the second quarter of 2014 found that the price for the national average PV installed system price dropped by 9 percent. The average price of a residential PV installation in the second quarter of 2014 dropped 41 percent from 2010. Since the second quarter of 2010, the average price of a solar panel dropped by 64 percent.

For the first half of the year, 53 percent of all new electric capacity installed has come from solar. Through the first half of the year, a new solar project has been installed every 3.2 minutes.

All three PV market segments grew significantly year over year. Over 6,500 megawatts of PV is predicted to come online in 2014, representative of a 36 percent growth over last year’s record installation levels.

There are over half a million solar installations now online in the U.S. The U.S. solar market topped the gigawatt mark for the third consecutive quarter to settle at 1,133 megawatts. That represents a 21 percent growth over the second quarter of last year and brings cumulative installed solar capacity to 15,900 MW, enough to power more than 3.2 million average American homes.

Image credit: Christine via Flickr

Gina-Marie Cheeseman

Gina-Marie is a freelance writer and journalist armed with a degree in journalism, and a passion for social justice, including the environment and sustainability. She writes for various websites, and has made the 75+ Environmentalists to Follow list by Mashable.com.

14 responses

  1. Lets start naming prices. Solar is very cheap today and people being kept in the dark! A typical residential system has a net cost to the installer of about USD 1.00 per Watt/peak. Everything above this is margin from the installer! If he tells you otherwise, he is lying!!

    1. As an installer, I would put the number at about $1.5 or so for materials. When you add the labor to install and get permits/utility paperwork and some overhead then that’s why you are seeing prices around $3/watt installed for systems >5kW.

        1. Good luck getting away without permitting a system on your roof when the power company starts seeing your meter spinning backwards.

    2. your freaking crazy…. as an installer for panels, inverters, junction boxes, utility meters, wiring etc… its about 1.50+ per watt depending on panel and add in permits, engineering, and labor… more like $2.80 per watt…

      if you can do it yourself be my guest.. but the first system i installed took me about 6 months… i couldn’t get the plans approved…i was in misery!

  2. The soft costs still haven’t come down, Im looking at solar but the local utility Orange and Rockland (owned by Con Edison) will only allow me 110% of my annual usage and because I use gas,they dont include that in my usage calculation. This way they dont get overun by solar install like in Hawaii.
    The local town get their cut as well
    Thats the killer but the real killer is that people dont understand that by laying out a big wad of cash to buy the thing outright they get federal and local rebates (some local not with O&R the scum) and it becomes very cheap by the end of year 1, from then on its like a mortgage, it pays itself off until in my case 7 years later its all cash in my pocket
    All these solar companies want you to lease the system, basically they use your roof , you still pay and they get the tax rebates no thanks

  3. “All three PV market segments grew significantly year over year. Over 6,500 megawatts of PV is predicted to come online in 2014, representative of a 36 percent growth over last year’s record installation levels.

    There are over half a million solar installations now online in the U.S. The U.S. solar market topped the gigawatt mark for the third consecutive quarter to settle at 1,133 megawatts. That represents a 21 percent growth over the second quarter of last year and brings cumulative installed solar capacity to 15,900 MW, enough to power more than 3.2 million average American homes.”
    Is that 15,900 MW capacity available 24/7/365? Could those 3.2 million American homes disconnect from the grid? No longer using the grid utility companies supply? Consequently using the grid as a battery to back-up when a PV owner can’t produce enough power to supply their own needs? If the solar PV systems are not reliable enough to supply power 24/7/365 to provide those 15,900 MW fro 3.2 million customers then the system did not grow a realistic 36%. The only way a 36% growth took place is when that power is good 24/7/365.

      1. Sorry about the name, but you are the only author of any article who has ever in four years of posting to discus who has responded to a rebuttal. But, if there is not a 36% increase 24/7/365 power availability to the grid there is not an actual 36% increase. I work for a utility company. We are expected by customers to be available any time of the day or night seven days a week 365 days a year regardless of whether the day is a holiday or not. If we do not supply constant power 24/7/365 customers want to know why. I can’t fault them for expecting the utility company to provide power. It is our job. However, there isn’t a solar system made which can guarantee 24/7/365 power, especially PV solar systems.

        I can understand what you are saying about installation costs and permitting; but, the majority of customers, especially commercial and particularly industrial care about reliability. If the grid does not produce adequate voltage sections of the grid will be dropped out of service. Utilities have no choice when they are expected to guarantee voltage bc low voltage will burn up electrical equipment and the utility company can become liable for damaged equipment along with the very distinct possibility of paying for lost productivity after a law suit. PV systems do not produce 120/240 voltage which is normal voltage for household use. Also the PV systems I have seen produce DC power and has to be rectified to AC. Even after rectifying DC voltage to AC voltage a PV system does not produce 120/240 voltage, household voltages. If a PV system can not meet 120/240 voltages to run household appliances what do think an industrial user is going to do when they require 480 or 4160 or 7200 kva to supply buss work to run large pieces of equipment?

        Understand I have nothing against green power. However; there are many out there who read articles such as yours who believe green power is the answer to all electrical needs bc they are only running household appliances. The picture is much much larger. The technology of the country is dependent on electricity. We need all forms of generation.

        Thanks for responding Gina. (Again sorry about your name.)

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