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Report finds PV costs fell by 17 percent in 2010

A report released September 15 found the average pre-incentive cost of installing a PV system fell by 17 percent from 2009 to 2010, with a further decrease in the first half of 2011.

Photo Credit: DOE/NREL 15610/Premier Homes

The Department of Energy’s Lawrence Berkeley National Laboratory released an update of it’s report, Tracking the Sun, which has been following the installed costs of grid-tied PV systems in the United States since 1998. The report focuses on changes from 2010 to 2009, but also includes preliminary data for the first half of 2011.

The study found that the average cost of installing a PV system in 2010 was $6.2/W before incentives, 17 percent lower than in 2009. The lower cost is attributed to:

  1. declining wholesale module prices, which fell by $0.14/W from 2008 to 2010 and have, according to Navigant Consulting’s Global Power Module Price Index, fallen more in 2011.

  2. falling non-module costs. These include mounting hardware, labor, permits and fees, shipping, taxes and installer profit, and have fallen by about 18 percent  from 2009 to 2010.

  3. economies of scale. Systems with a capacity of over 1,000 kW had an average cost of about 47% less than systems of ≤2 kW.

“The drop in non-module costs is especially important,” said report co-author Ryan Wiser, “as those are the costs that can be most readily influenced by solar policies aimed at accelerating deployment and removing market barriers, as opposed to research and development programs that are also aimed at reducing module costs.”

Overall, the average net installed cost, taking into account state and federal government incentives, was $3.6/W for residential PV and $3/W for commercial PV in 2010, both historic lows.

The study also found much variation among states, suggesting that local factors – like permit requirements, labor rates, the extent of third party ownership, and sales tax exemptions – strongly influenced PV system costs.


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