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The Price of Solar PV Installations Fell by 17% in 2015

Solar Cost – Solar Savings – Solar Installation

According to GTM Research and SEIA’s “Solar Market Insight 2015: Year in Review” overall solar PV system pricing in the U.S. fell by 17% in 2015. The price varied by market segment, with the largest declines in the utility fixed-tilt sector.

Quarter by quarter, pricing has continued to trend downward but with some leveling off in the residential sector. According to the report, this was due in particular to strong investment in winning new customers and the stubbornness of other residential soft costs. In the non-residential and utility sectors, there were annual declines of 10% and 17%, respectively. This reflects continued aggressive cost reductions (both in hardware and soft costs) in national solar PV system pricing.

Moreover, with the expansion of the contractors, installers and operators into regions with lower labor and regulatory compliance costs, these regions will have a larger impact on aggregate pricing going forward. Due to scale benefits, variations in utility PV system costs are much smaller than variations in residential and non-residential solar PV costs.

While residential hardware costs have fallen by over 16% in the past year, soft costs have actually risen on an industry-average basis by 7%. In the non-residential market, soft costs remain a challenge as well. Hardware costs fell 15% year-over-year, while soft costs saw a modest decrease of 6%. In Q4 2015, soft costs accounted for approximately 50% of total system pricing.

The Southeast U.S. led in terms of the lowest system costs, and the region played a significant role in bringing national pricing downward for utility fixed-tilt systems in 2015. Throughout the country, utility EPCs and developers continue to optimize their logistics and supply chains, as well as leveraging more mature installation practices, which has translated into major reductions in non-hardware costs across the board. In 2015, soft costs decreased 37% and 23% in fixed-tilt and tracking project, respectively.

Even with prices falling significantly throughout 2015, there still are tremendous opportunities to realize further price reductions in 2016 and beyond.

Palmetto Solar