The median installed cost of small photovoltaic (PV) systems continues its downward march, with 2014 showing the fifth consecutive year of significant price reductions, according to an annual report from the Department of Energy’s Lawrence Berkeley National Laboratory.
Installed prices for both residential and non-residential PV systems finished last year were 40 cents per watt lower than they were the year before. The decline for large non-residential PV installations was even sharper, 70 cents per watt, the latest Tracking the Sun report said.
And in the first six months of 2015, PV prices in some larger states dropped by another 20 cents to 50 cents per watt.
The lab reported “tremendous variability” in PV pricing: For residential systems installed in 2014, 20% were sold for less than $3.50 per watt while another 20% sold for more than $5.30 per watt. In Arizona, 20% of residential installers posted median prices at or below $3 per watt last year, compared to the median price in the U.S. of $4.30 per watt.
The wide swing in prices is due to a variety of factors, the Lab said, including differences in system design and components, market and regulatory conditions, and installer-specific quirks.
“The continued decline in PV system pricing is especially noteworthy given the relatively stable price of PV modules since 2012,” a press release accompanying the report said. Lower costs could instead be attributed to lower “soft costs”: marketing, system design, installation labor, permitting, and other non-module expenses.
“The fact that such variability exists underscores the need for caution and specificity when referring to the installed price of PV, as clearly there is no single ‘price’ that uniformly and without qualification characterizes the U.S. market, or even particular market segments, as a whole,” said lead author Galen Barbose of the Lab’s Electricity Markets and Policy Group.