LONDON -- As the deployment of grid-connected solar photovoltaic (PV) systems has increased, so too has the desire to track the installed price of these systems over time and by location, customer type, and system characteristics.
A new report from the Lawrence Berkeley National Laboratory (LBNL) attempts to do just that by summarising trends in the installed price of grid-connected PV systems in the US from 1998-2011, with preliminary data for 2012. The analysis is based on project-level data for more than 150,000 individual residential, commercial, and utility-scale PV systems, totaling more than 3 GW and representing 76 percent of all grid-connected PV power installed.
Utility-scale PV Emerges
The majority of systems (64 percent) were installed within the last three years of the sample period, and the utility-scale systems in the sample, as might be expected, were even more heavily concentrated within the latter years, with 90 percent of these systems installed from 2009-2011.
California and New Jersey represent 54 percent and 18 percent of the sample, respectively, in terms of total installed capacity. Arizona, Pennsylvania, Massachusetts, North Carolina, and New York each represent 2 percent-7 percent of the sample capacity, with the remaining 20 states comprising 9 percent in total.
The U.S. PV market has diversified significantly in recent years. California, though still the largest market, represents a smaller share (40 percent), with correspondingly greater representation among the other leading state markets.
The 80 utility-scale PV systems studied are located in a total of 17 states, with almost 90 percent of the capacity distributed across eight states (California, New Jersey, New Mexico, Nevada, Colorado, Arizona, Florida, and Texas). The size of the utility-scale PV systems in LBNL's data sample ranges widely, from 2 MW up to 58 MW. Most of the systems (66 percent) are smaller than 10 MW, though most of the sample capacity (72 percent) consists of systems larger than 10 MW.
Key findings are as follows:
The installed price of utility-scale systems varies significantly across projects. Among the 49 projects in the data sample completed in 2011, for example, installed prices ranged from $2.4/W to $6.3/W, reflecting the wide variation in project size (from 2 MW to 35 MW), differences in system configurations (e.g., fixed- tilt vs. tracking and thin-film vs. crystalline modules), and the unique characteristics of individual projects.
Discerning a time trend for the installed price of utility-scale PV is challenging, given the small and diverse sample of projects. As a rough measure, the capacity-weighted average installed price declined from $6.2/W for projects installed during 2004-2008, to $3.9/W for projects installed during 2009-2010, and to $3.4/W for projects installed in 2011.
Larger utility-scale systems have lower installed prices. In particular, among projects installed in 2011, the installed price of projects larger than 10 MW generally ranged from $2.8/W to $3.5/W, whereas projects smaller than 10 MW span a broader range, with most priced between $3.5/W and $5.0/W.
Installed price trends according to system configuration are less evident. Among <10 MW utility-scale projects installed in 2011, systems using thin-film modules are relatively low priced, compared to crystalline systems with and without tracking. Among projects >10 MW, however, no clear differences in installed prices are observable either between crystalline and thin-film systems or between systems with and without tracking.
Within the class of systems 2-10 MW in size, utility-scale systems (ground- mounted, by definition) generally have slightly lower installed prices than similarly sized commercial rooftop systems. Although median installed prices are similar between these two groups, the distribution is skewed lower for utility-scale systems, with one-third priced from $2.9/W to $3.5/W, whereas the lowest-priced third of the large commercial roof-mounted systems range from $3.6/W to $3.8/W.
Installed prices have declined by 5 percent-7 percent per year, on average, depending on system size. Price declines, however, have not occurred at a steady pace. In particular, installed prices declined markedly until 2005, but then stagnated through roughly 2009 while the PV supply chain struggled to keep pace with surging worldwide demand.
Since 2009, installed prices have fallen precipitously as upstream cost reductions - principally PV module cost reductions - worked their way through to end consumers, and as state and utility PV incentive programmes continued to ramp down their incentives. From 2010 to 2011, installed prices fell by $0.8/W (14 percent) for systems greater than 100 kW. Preliminary data for the first half of 2012 show that installed prices have continued to fall, and declines in global module prices over the first half of 2012 suggest that installed system prices will continue to decline as projects in the development pipeline, whose costs reflect current module pricing, are constructed.
Over the longer term, however, installed prices have fallen also as a result of reductions in non-module costs (which include such items as inverters, mounting hardware, labour, permitting and fees, overhead, taxes, and installer profit). During the first half of the historical period, the overall decline in total installed prices was primarily attributable to a reduction in non-module costs. Within the past several years, however, module prices have declined at a much faster pace than non-module costs, and as a result, non-module costs have grown in terms of their relative share of total system costs. This shift in the cost structure of PV systems has heightened the emphasis within the industry and among policymakers on reducing non-module costs and, particularly, business process (or “soft”) costs.
Prices vary across projects
A convergence of prices, with high-priced outliers becoming increasingly infrequent, is consistent with a maturing market characterised by increased competition among installers and module manufacturers and by better-informed consumers. A narrowing trend was most evident between 1998-2003 and 2004-2008. Since then, the spread in the installed price distribution has remained relatively stable, and a significant degree of variability in pricing across systems has persisted.
The installed price distribution for 10-100 kW and >100 kW systems exhibit considerable spread, though somewhat less so than for smaller systems.
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