An average installed price of US$4.71/W has been reported for utility-scale solar PV projects for 2010, according to recent analysis from the International Renewable Energy Agency (IRENA).

This figure – compiled from 92 utility-scale PV projects averaging 10 MW in Canada, Australia, China, Thailand, India, Japan, the Czech Republic, Belgium, Greece, Spain, France, Germany, Italy and the US – gives a cost which is about 16% lower than the 2009 average price of $5.61/W.

Reflecting differences in technology prices IRENA figures furthermore suggest the average 2010 price for crystalline silicon (c-Si) PV plants was $5.03/W, while the average price for thin-film utility-scale systems was around $3.90/W.

For example, fixed, ground-mounted systems were the cheapest option for c-Si-based utility-scale systems with an average cost of $4.19/W. Adding a tracking system increases the costs to an average of $6.39/W, only slightly cheaper than mounting the PV system on roofs ($6.45/W). Thin-film PV systems are cheaper than c-Si systems and have a higher market share for utility-scale applications, the report says. In 2010, ground-mounted fixed systems using thin-film PV modules cost an average of $3.87/W, the authors add.

According to the agency, the total installed cost of PV systems can vary widely within individual countries, and between countries and regions and it is these variations which reflect the maturity of domestic markets, local labour and manufacturing costs, incentive levels and structures, and a range of other factors.

In 2010, the lowest price ($3.38/W) was recorded in Thailand. The highest cost utility-scale PV plants were recorded in Japan ($6.50/W), albeit with an average project size lower than in Europe and China. Among the major PV markets, Germany showed the lowest average price at $3.64/W for c-Si-based PV plants. The widest price variation occurred in Italy with lowest and highest figures of $2.89/W and $6.67/W respectively. In the US, the average price was $4.83/W.

Falling PV prices, high cost fossil fuels and incentive schemes have clearly driven the growth in utility-scale PV plants. IRENA gives figures that reveal that since 2005, more than 1200 PV plants with a capacity of 1 MW or more have been commissioned, with over 120 of these plants having an output of 10 MW or more.

Indeed, leading markets identified by IRENA for utility-scale PV systems are Germany, Spain, Canada and the US, but agency adds that utility-scale PV systems are also being commissioned in India, China and the Middle East.

And, despite the large range in costs, PV is already competitive with residential tariffs in regions with good solar resources, low system costs and high electricity tariffs.

But, despite the impressive declines in PV system costs, the levelised cost of electricity (LCOE) from PV remains comparitively high. For instance, the agency cites a LCOE of current utility-scale thin-film PV systems estimated at between $0.26 and $0.59/kWh in 2011.

Fortunately, the prospects for continued cost reductions are very good. Most of the economy of scale achieved by utility-scale PV systems comes from balance of system (BOS) cost reductions and saving in the installation, permitting and commissioning costs. However, IRENA also identifies financing costs as an area where potential savings can also be achieved.