PV prices to continue falling – US report

The price of solar PV systems is to keep on falling according to a joint report from the US government’s National Renewable Energy Laboratory (NREL) and Berkeley’s Lawrence Berkeley National Laboratory (LBL).

In an analysis of PV pricing data over the past decade, the report indicated that the rapid fall in prices will continue throughout the rest of 2012 and into 2013. The report aims to provide clarity on the price of PV systems amid much conflicting data, and help the Department of Energy (DoE) track progress towards the government’s goal of reducing the installed cost of solar energy systems by roughly 75% between 2010 and 2020.

“There is often confusion when interpreting estimates of PV system prices,” NREL solar technology financial analyst David Feldman said. “This report helps to clarify this confusion by bringing together data from a number of different sources and clearly distinguishing among past, current and near-term projected estimates.”

The report indicates that while data sources, assumptions, and methods differ substantially between the bottom-up analysis, which includes component prices, and the reported price analysis, the results support the validity of both analyses and provide a consistent perspective on system pricing, NREL said.

The report draws on on-going NREL research into PV component prices, and its tracking of near-term projections of system- and component-level pricing from various analysts and manufacturers. The report also summarises findings on historical price trends from LBL’s Tracking the Sun V report.

In a second analysis released alongside the price projections, into the make-up of PV system prices, NREL and Berkeley analysts found that “soft costs”, the non-hardware costs, constitute roughly 40-50% of a typical PV system price.

The four soft cost categories, customer acquisition, permitting and inspection, installation, and third part financing, accounted for 23% of residential PV system prices, 17% of small commercial system prices, and 5% of large commercial system prices, the report said.

“These soft costs present significant opportunities for further cost reductions and labour-productivity gains,” NREL solar technology markets and policy analyst Kristen Ardani said. “Benchmarking and tracking these costs will help with the development of policies and practices aimed at reducing cost inefficiencies.”

Both reports were produced as part of an on-going collaborative research effort between the two labs focused on solar technology soft cost and system-level cost analysis and modelling.

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Photovoltaics (PV)  •  Policy, investment and markets  •  Solar electricity