LBNL Report Shows Decreasing Soft Costs of Solar

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Its an accepted fact that the cost of solar has been continuously declining for the past several years. Many people, however, only have a vague understanding of this and do not necessarily know the exact costs and how much they have declined.

A new study from the Department of Energy’s Lawrence Berkeley National Laboratory, details just how much costs have declined up through 2013, as well as the first half of 2014. By looking at data from 1998-2013, and initial data on 2014, the study gives the most detailed cost-analysis to date.

Two leading solar advocacy groups, the Solar Energy Industries Association (SEIA) and Vote Solar, applaud the report findings as the latest indicator that affordable solar energy is ready to power our new energy economy.

“In just a few years, American ingenuity and smart policy have made solar a true success story. These price declines mean that solar power is now an affordable option for families, schools, businesses, and utilities alike,” said Adam Browning, executive director of Vote Solar. “The result is that solar and its many grid, economic, and environmental benefits are shining in communities across the country.”

“This report highlights yet another reason why solar energy has become such a remarkable American success story. Today, solar provides 143,000 good-paying jobs nationwide, pumps nearly $15 billion a year into the U.S. economy, and is helping to significantly reduce pollution,” said SEIA president and CEO Rhone Resch. “There are now more than half a million American homes, businesses, and schools with installed solar, and this is good news for freedom of energy choice as well as for our environment.”

This is the seventh edition of Lawrence Berkeley National Lab’s annual report on solar PV costs in the U.S. It examines more than 300,000 PV systems installed between 1998 and 2013 as well as preliminary data from the first half of 2014.

Key findings include:

  • Installed prices continued their significant decline in 2013, falling year-over-year by 12 to 15% depending on system size.
  • Data for systems installed in a number of the largest state markets — Arizona, California, Maryland, Massachusetts, New Jersey, and New York — during the first six months of 2014 found that the median installed price of systems installed in the first half of 2014 fell by an additional 5 to 12%, depending on system size, over 2013.
  • Solar installed costs declined even as PV module pricing remained relatively steady, indicating success in efforts targeting non-module soft costs — which include marketing and customer acquisition, system design, installation labor, and the various costs associated with permitting and inspections.
  • Cash incentives provided through state and utility PV incentive programs (i.e., rebates and performance-based incentives) have fallen by 85 to 95% since their peak a decade ago.

One of the most exciting developments is the confirmation that soft costs are in fact declining. As shown in the following graph, even though module prices remained constant from 2012-2013, the installed price continued its steady decline. This clearly shows that various initiatives, such as Sunshot, are having their desired effect.

Solar Cost Declines

 

While it is noted that the United States still lags behind countries such as Germany, these continued price declines are excellent news for the industry, and show that the U.S. is headed in the right direction.

The study is available for free in its entirety on the LBNL site.