The World's #1 Renewable Energy Network for News, Information, and Companies.

PV Costs Down Significantly from 1998-2007

A new study on the installed costs of solar photovoltaic (PV) 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. Researchers at the Department of Energy's Lawrence Berkeley National Laboratory said the overall decline in the installed cost of solar PV systems is mostly the result of decreases in non-module costs, such as the cost of labor, marketing, overhead, inverters and balance of systems.

“This suggests that state and local PV deployment programs—which likely have a greater impact on non-module costs than on module prices—have been at least somewhat successful in spurring cost reductions,” according to the paper, by Ryan Wiser, Galen Barbose, and Carla Peterman of Berkeley Lab’s Environmental Energy Technologies Division.

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 US $10.50/watt (W) in 1998 to $7.60/W in 2007. This is equivalent to an average annual reduction of $0.30/W, or 3.5 percent per year in real dollars.

The cost reduction over time was largest for smaller PV systems, such as those used to power individual households. Also, installed costs show significant economies of scale. Systems completed in 2006 or 2007 that were less than 2 kilowatts (kW) in size averaged $9.00/W, while systems larger than 750 kW averaged $6.80/W.

Installed costs were also found to vary widely across states. Among systems completed in 2006 or 2007 and less than 10 kW, average costs range from a low of $7.60/W in Arizona, followed by California and New Jersey, which had average installed costs of $8.10/W and $8.40/W, respectively, to a high of $10.60/W in Maryland. Based on these data, and on installed cost data from the sizable Japanese and German PV markets, the authors suggest that PV costs can be driven lower through sizable deployment programs.  

The study also found that the new construction market offers cost advantages for residential PV systems.  Among small residential PV systems in California completed in 2006 or 2007, those systems installed in residential new construction cost $0.60/W less than comparably-sized systems installed in retrofit applications.

The study also found that direct cash incentives provided 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 investment 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/W in 2007, a near-record high based on the data analyzed in the report.  Total after-tax incentives for residential systems, on the other hand, averaged $3.1/W in 2007, their lowest level since 2001.

Because incentives for residential PV systems declined over this period, the net installed cost of residential PV has remained relatively flat since 2001. At the same time, the net installed cost of commercial PV has dropped—it was $3.90/W in 2007, compared to $5.90/W in 2001, a reduction of 32%, thanks in large part to the federal ITC.

“Solar will be big when it is cheap. This report demonstrates that local market development plays a key role in bringing solar costs down,” said Adam Browning, executive director of Vote Solar. “Competitive markets make for quality installers and service providers, which then lead to lower costs and more demand for solar: a virtuous circle.”

The report Tracking the Sun: The Installed Cost of Photovoltaics in the U.S. from 1998–2007 can be downloaded by clicking here.

RELATED ARTICLES

Renewable energy jobs

Global Renewable Energy Employment Surges 18 Percent to 7.7 Million

Andrew Burger, Correspondent Ongoing growth in renewable energy investment and deployment is creating jobs worldwide — and lots of them. This job growth is helping governments address a fundamental economic problem plaguing developed and developing cou...
Beach sand

Italian Company Uses Sun-Heated Sand to Produce Energy

Flavia Rotondi and Alessandra Migliaccio, Bloomberg

Italy’s well-known sun and sand form the basis of many beach holidays. An Italian company has also found another purpose for the combination: energy production.

Panasonic Japan solar module manufacturing

Panasonic Ramps Up Japanese Solar Manufacturing to Meet Domestic Rooftop Demand

Junko Movellan, Correspondent Panasonic Corp, a Japanese electronics company, announced that it will expand its domestic solar cell and module production to meet the rooftop solar demand in Japan. The company will invest a total of 9.5 billion yen (US$7...

Renewable Energy Is Beginning To Power Africa

Andrew Burger, Contributor According to the International Energy Agency, sub-Saharan Africa will require more than $300 billion in investment to achieve universal electricity access by 2030. Committing more than $7 billion in U.S. government support ...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 3
1505REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

EU PVSEC 2015 (European PV Solar Energy Conference and Exhibition)

The EU PVSEC is the largest international Conference for Photovoltaic re...

CA Wine Industry's 2015 Solar Update- WEBINAR

Proceeds from event registration will go to the CA Sustainable Win...

Energy Security: Opportunity Power with the Sunny Boy Secure Power ...

Wouldn’t it be great to have a grid-tied inverter that could still...

COMPANY BLOGS

Can We Just Allow Florida To Be The Sunshine State?

We attended Solar Power Southeast, a regional solar show put on by&...

The Outlook for Midwest Solar

Our whirlwind solar conference tour continues! Yesterday we touched down...

Well, Hello There Southeast — We Are Excited To Be Here

We’ve traveled 651 miles into the heart of the Deep South to atten...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS