Solar Power Keeps Getting Cheaper

“Tracking the Sun V,” the lab’s fifth annual report, tracks the installed price of grid-connected photovoltaic (PV) systems in the U.S. by location, customer type, and system size from 1998 to 2011, based on data from more than 150,000 residential, commercial, and utility-scale systems. Prior to 2005, the decline in price was largely due to reductions in non-module, or “soft,” costs such as permitting, installation, and maintenance; prices stabilized for a few years and then, in 2008, module costs (for the panels themselves) began to fall sharply, with reductions of 25% in residential and commercial installations by 2011. Soft costs, however, have remained fairly consistent since 2005.

Overall price varied from state to state; small systems were installed for less than $5/W in Texas but well over $7/W in Washington, D.C., and much of that difference was in soft costs. The U.S. PV market, the world’s fourth largest, is encouraged by government incentives that include rebates and tax benefits; the report suggests targeting future policies at specific expenses, such as permitting and interconnection.