National Lab Report: Cost of Solar Energy Continues Significant Decline

The latest edition of Lawrence Berkeley National Lab’s “Tracking the Sun,” an annual report on solar photovoltaic (PV) costs in the U.S., examined more than 150,000 PV systems installed between 1998 and 2011 and preliminary data from the first half of 2012. Key findings include:

• The average installed price of residential and commercial PV systems completed in 2011 range from $6.1/W for smaller projects to $4.9/W for larger projects, an 11-14% decrease from the year before. Installed prices fell an additional 3-7% in the first half of 2012. 

• Historically, installed PV prices have declined an average of 5-7% per year from nearly $12/W in 1998, with particularly sharp reductions occurring since 2009.

• The recent price decline is, in large part, attributable to falling module prices, which fell by $2.1/W from 2008 through 2011, and have fallen further still in 2012.

• Non-module costs, such as installation labor, marketing, overhead, inverters, and the balance of systems for residential and commercial systems declined by roughly 30% from 1998 to 2011, but have not declined as rapidly as module prices in recent years. Market-building policies that target non-module or “soft” costs represent a significant opportunity for continued price reduction.

“Tracking the Sun gives us more good solar news as we see efficiencies built into labor and permitting practices without sacrificing quality and safety,” said Jane Weissman, executive director, Interstate Renewable Energy Council, Inc. (IREC).”The solar industry has built in safeguards through standard-based performance and competency assessment programs which together lead to consumer confidence and sustainable market growth.”

The price declines found in Tracking the Sun add to a number of recent reports that illustrate: 

• Rapid Market Growth: PV installations totaled 742 megawatts (MW) in Q2 2012, up 45% over the previous quarter and 116% over Q2 2011. Source: Solar Market Insight report from GTM Research and SEIA.

• Strong Job Growth: Solar employs 119,000 Americans across all 50 states. Solar job growth has far outpaced the general economy with 13.2% annual growth over 2011. Source: The National Solar Jobs Census from the Solar Foundation.

• Overwhelming Bipartisan Support: 92% of Americans agree that it’s important to use and develop more solar. Source: Hart Research National Solar Survey 2012.

An infographic illustrating the U.S. solar industry’s recent success is available at: http://votesolar.org/2012/11/infographic/

The full Tracking the Sun report is available at: http://emp.lbl.gov/sites/all/files/LBNL-5919e-REPORT.pdf

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About Vote Solar:
Founded in 2002, the Vote Solar Initiative is a grassroots non-profit organization working to combat climate change and foster economic development by bringing solar energy into the mainstream. www.votesolar.org

About SEIA:
Established in 1974, the Solar Energy Industries Association® is the national trade association of the U.S. solar energy industry. Through advocacy and education, SEIA® is building a strong solar industry to power America. As the voice of the industry, SEIA works with its 1,100 member companies to make solar a mainstream and significant energy source by expanding markets, removing market barriers strengthening the industry and educating the public on the benefits of solar energy. Visit SEIA online at www.seia.org

About IREC:
The Interstate Renewable Energy Council, Inc. (IREC) is a non-profit organization accelerating the use of renewable energy since 1982. IREC’s programs and policies lead to easier, more affordable connection to the utility grid; fair credit for renewable energy produced; best practices for states, municipalities, utilities and industry; and quality assessment for the growing clean energy workforce through the credentialing of trainers and training programs. www.irecusa.org