Solar Cost Plunge Shows No Signs Of Abating

Cheaper by the minute: That seems to be the story with solar photovoltaics in the United States these days.

According to a new report from government scientists, the cost of installed PV fell another 30 to 90 cents per watt in 2012, putting the median price for residential and small commercial systems – those under 10 kilowatts – at $5.30/watt.

Tracking the Sun solar cost

image from “Tracking the Sun”

“This marks the third year in a row of significant price reductions for PV systems in the U.S.,” Galen Barbose of Berkeley Lab’s Environmental Energy Technologies Division, one of the co-authors of the annual Tracking the Sun report, said in a statement.

And the decline appears to be continuing apace this year, according to the researchers: “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.”

Utility-scale systems are also becoming cheaper. “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 researchers said.

The report emphasized that there’s a lot of variability in prices depending on where the installation is going in as well as the nature of the PV application and how the system is configured. But overall, the continuing decline in module prices – that’s the panels themselves – is certainly exhibiting downward pressure on overall installed system costs.

Now if only something could be done about the costs of the rest of the system and the installation.

“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,” the researchers said. “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.”

Indeed, that is a chief goal of the Obama administration’s SunShot program, the effort to drive down the cost of solar to the point where it’s at a par with conventional sources.

Tracking the Sun, a 70-page PDF, can be downloaded for free here.


  • Reply August 12, 2013


    When the cost of solar hits the cost of current electricity, I’m in and big scale.

  • Reply August 14, 2013


    de-centralizing energy production has 2 major benefits to the US Economy. First, grid-hauling losses are eliminated when energy is produced close to where it is consume – neighborhood utility scale shared systems and roof-panels. Second, its more robust in times of national energy, when grid failures are known to happen. And as a side note, Smart Grids – the anti-Christ of distributed energy, aren’t nearly as expensive, invasive and again, centrally administered. Nest and other home energy management systems can do a better job.

    Great article, and pointing out SunShot is important. As the cost to place panels, convert and store the energy they make continues to become a larger part of the overall installation cost, innovations in rapid-deployment, interconnection, conversion, storage are needed.

    Why GE pays no taxes isn’t often asked, but we need to move cautiously and question Congress’ constant mad desire to eliminate public ownership, patent free development and other benefits we all enjoy of the once strong US tech economy, fueled by public dollars. From TCP/IP and the Internet to advances in material sciences, the US public has funded and enjoyed the benefits of a highly competitive free market until 1985. Since then, free markets have been redefined to mean one corporate entity is ‘free to do whatever it likes with the market’ rather than the well-informed public is free to choose better products for lower prices, improving the vast majority of lives – see at minimum 1930-1985 a nice run.

    My only criticism about SunShot is that it required a very large demonstration again favoring the largest installation companies, rather than a free market. Garage innovators should be embraced. Market disruptors *make* the healthy American economy ‘back in the day’ – pre 1985. X-prize the problem, and let everyone compete for a very large prize – say 1 billion dollars – a tiny fraction of the solar deployment costs – and make the techniques available to all installers, conversion and storage companies rather than onerous patents.

    Its why TCP/IP, Web services, and many elements of our technology economy work. There are no patents on TCP/IP, Web services, and GNU free software drives most of Facebook, Google, and many other tech giants services.

    A similar market-advance is needed in Energy, and the economic model used to produce America’s single largest economic advance – the Internet, is a good one. 🙂

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