The cost of installing solar energy in America has fallen to an all-time low according to new market data released by the Energy Department’s Lawrence Berkeley National Laboratory.
In the latest editions of two recurring reports, Tracking the Sun IX and Utility Scale Solar 2015, Berkeley Labs found the average year-on-year price of residential and non-residential solar PV systems fell by five percent, while utility-scale solar costs declined by 12 percent.
Tracking the Sun IX details a record low price for installing household rooftop PV, dropping by USD $0.20 per watt in 2015. Smaller, non-residential rooftop PV systems under 500 kW in size declined by seven percent ($0.30 p/W) while larger commercial PV systems above 500 kW saw price drops of nine percent ($0.30 p/W).
“This marked the sixth consecutive year of significant price reductions for distributed PV systems in the U.S.,” said Galen Barbose of Berkeley Lab’s Electricity Markets and Policy Group, lead author of Tracking the Sun.
Roughly 20 percent of the non-module reductions are due to a plunge in the price of solar inverters and system racking equipment, with the remainder attributed to ongoing falls in the “soft” cost of solar installations, ie., marketing and customer loans schemes, better system design and more efficient inspection and permitting procedures.
It’s interesting to note that solar power systems are cheaper in Australia than in the USA, thanks in part to the subsidy available here (which will be reduced soon).
In the USA’s larger, utility-scale market – defined as any grid-connected solar power system above 5 MW in capacity – installed prices have fallen by around 60 percent since the 2007-09 period to an average of USD $2.7 p/W for projects completed in 2015.
The price of utility-scale solar varies widely; the lowest-cost PV projects deliver energy at just $1.7 p/W, while one project, a single concentrating solar power facility completed in 2015, was price at $8.7 p/W.
The performance of projects has improved in recent years, thanks largely to advancements in solar tracking technology and design. Developers have also become adept at siting facilities in areas of high solar irradiation, with considerations on best technology making a big impact, such as silicon vs. thin-film modules.
These falling costs and higher capacities have allowed power purchase agreements (solar PPA) for utility-scale PV to tumble “dramatically”, by $20-$30 p/MWh per year on average from 2006 through 2013, with a smaller price decline of $10 p/MWh per year among PPAs signed in 2014 and 2015.
“Looking ahead, the improving economics of solar power demonstrated in these two reports, coupled with the extension of the 30% federal investment tax credit (ITC) through 2019, should drive a continued expansion in all sectors of the U.S. solar market over the next few years,” the report concludes.
