Solar PV System Prices Continue Downward Spiral

Solar may have gotten some bad buzz recently with the scandal surrounding Solyndra and its $527 million in loan guarantees (see article) but there has been much more good news than bad regarding solar's potential. According to a report released this month from the Lawrence Berkeley National Laboratory, the average cost of going solar in the United States fell significantly in 2010 and the first half of 2011. The report, entitled, "Tracking the Sun IV," says pre-incentive solar photovoltaic (PV) costs decreased 17 percent in 2010, the most significant annual reduction since Lawrence Berkeley National Laboratory began tracking the data in 1998. In the first half of 2011, costs declined another 11 percent. If you have been postponing solar for electricity production, you may want to re-visit the idea.

Installed costs are lowest for thin-film systems and highest for crystalline systems with tracking. Costs do vary by state and of course incentives impact final cost. Average costs, for example, range from a low of $6.3/W in New Hampshire to a high of $8.4/W in Utah.

Also according to the report, third party ownership of customer-sited PV systems through power purchase agreements and leases has become increasingly common for PV systems of all sizes and market sectors. "Under such arrangements, the transaction between the host customer and the system owner consists of a series of payments over time, rather than a single up-front payment for the purchase of the PV system," the report says.

The report concludes that further cost reductions will be necessary if the U.S. PV industry is to continue its expansion, given the expectation that PV incentive programs will also continue to ratchet down financial support.

For its report, Lawrence Berkeley National Laboratory examined more than 115,000 PV systems installed between 1998 and 2010 across 42 states.