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PV System Prices Plummet 14%

August 14, 2013 By Linda Hardesty

Tracking the Sun coverThe installed price of solar photovoltaic power systems in the United States fell substantially in 2012 and through the first half of 2013, according to the latest edition of Tracking the Sun, an annual PV cost tracking report produced by the Department of Energy’s Lawrence Berkeley National Laboratory.

Installed prices for PV systems in 2012 fell by a range of roughly $0.30 per Watt to $0.90/W, or 6 to 14 percent, from the prior year, depending on the size of the system, marking the third year in a row of significant price reductions for PV systems in the US.

Within the first six months of 2013, PV system prices in California fell by an additional 10 to 15 percent, and the report suggests that PV system price reductions in 2013 are on pace to match or exceed those seen in recent years.

The report indicates that the median installed price of PV systems completed in 2012 was $5.30/W for residential and small commercial systems smaller than 10 kW in size and was $4.60/W for commercial systems of 100 kW or more in size. Utility-scale systems installed in 2012 registered even lower prices, with prices for systems larger than 10,000 kW generally ranging from $2.50/W to $4.00/W.

The sixth edition of Berkeley Lab’s Tracking the Sun report is based on data from more than 200,000 residential, commercial, and utility-scale PV systems installed between 1998 and 2012 across 29 states, representing roughly 72 percent of all grid-connected PV capacity installed in the United States.

According to the report, recent installed price reductions for PV systems are primarily attributable to steep reductions in the price of PV modules. From 2008 to 2012, annual average module prices on the global market fell by $2.60/W, representing about 80 percent of the total decline in PV system prices over that period. Non-module costs—such as inverters, mounting hardware, and the various non-hardware or “soft” costs—have also fallen over the longterm but have remained relatively flat in recent years. As a result, they now represent a sizable fraction of the total installed price of PV systems. This shift in the cost structure of PV systems has heightened the emphasis within the industry and among policymakers on reducing non-module costs.

The report compares PV system pricing in the United States to a number of other major international markets, and finds that US prices are generally higher. The differences are particularly stark in comparison to Germany, Italy and Australia, where the price of small residential PV systems installed in 2012 was roughly 40 percent lower than in the United States. The report attributes much of the difference in PV system pricing to soft costs, citing the fact that the cost of PV modules and other hardware is typically similar across countries. The contrast between countries suggests that deep near-term reductions in soft costs are attainable in the United States.

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