Originally published on Clean Energy Collective
It’s been widely publicized that the cost of residential solar electric systems in the United States is falling faster than ever before. This downward pricing trend is projected to continue through 2016 and then stabilize, according to a September 2014 report compiled by researchers from the National Renewable Energy Laboratory (NREL) and the Lawrence Berkley National Laboratory. However, residents and business owners who are unable to install solar on their property and are considering buying into a community solar facility won’t get the best deal if they wait too long.
Throughout the 15 years prior to 2012, residential photovoltaic (PV) systems declined an average of 6 to 8 percent, the report reveals. Then from 2012 to last year, prices for solar systems under 10 kilowatts (kW) fell by 12 percent or $0.65 per watt.
“There is still considerable uncertainty as to how low PV system prices will drop in the next five to 10 years,” David Feldman, the study’s lead author and NREL financial analyst told the Denver Business Journal.
For residential and small commercial PV systems, the average reported price (taken from a subset of state markets) for the first half of 2014 is $4.50 per watt—compared to the annual average of $4.74 per watt last year.
Feldman noted that the reductions in solar electric systems are “within reach” of the U.S. Department of Energy’s (DOE) SunShot Initiative goal to make the price of solar cost-competitive with other sources of energy by the end of the decade. If successful, the national collaborative effort will reduce the cost of solar PV systems 75 percent from 2010 to 2020.
Having achieved 60 percent of its goal, SunShot supports a variety of innovative efforts to accelerate the deployment of solar across the United States. One of those efforts is to make community solar broadly accessible, allowing individuals and businesses that can’t install solar on their property to harness the sun’s energy.
Increasing Solar Energy Deployment
In October, SunShot awarded $700,000 to community solar developer Clean Energy Collective (CEC) to build a national online portal to help other parties develop their own successful community solar programs. Ultimately, the NCSP (National Community Solar Platform) will help drive down the cost of solar and facilitate the nationwide deployment and utilization of solar power.
With 16 shared solar projects online in Colorado alone—and more than 40 throughout the U.S.—CEC’s community-owned solar model is gaining traction. Two new facilities in Denver were interconnected in August, offering Xcel Energy customers the ability to own solar panels in a centralized array for $3.70 per watt. In Boulder, the cost to buy panels in CEC’s second community-owned solar array is now $3.55 per watt. Both cities offer solar panels for around $.85 per watt less than NREL’s average installed price for the first half of 2014—without a single customer needing to replace a roof or cut down a tree.
Acting Now Generates the Greatest Payback
Although the price of solar PV systems is anticipated to decline over the next several years, those with an electric bill from Xcel Energy will miss out on the biggest bang for their buck if they wait to purchase community-owned solar panels. This is because the payments that Xcel issues to its ratepayers for producing their own solar power (called Renewable Energy Credits or RECs) are set to expire as the investor-owned utility reaches its state-mandate for renewable generation.
Initially considering a rooftop solar system, Becky Jakobsen of Aurora decided it was a better option to purchase nine PV panels in the Aurora/Arapahoe Community Solar Array. An environmental advocate, she stressed the importance of making sustainable choices today. The timely decision will save the Denver Metro resident around $12,500 over 20 years. “I just cannot get it across to people how important it is that we start acting now,” Jakobsen said.