Tuesday, February 24, 2009

Costs of Solar Going Down in U.S.

A new study on the installed costs of solar photovoltaic (PV) power systems in the U.S. shows that the average cost of these systems declined significantly from 1998 to 2007, but remained relatively flat during the last two years of this period.

Researchers at the Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) say that the overall decline in the installed cost of solar PV systems is mostly the result of decreases in nonmodule costs, such as the cost of labor, marketing, overhead, inverters, and the balance of systems.

“This suggests that state and local PV deployment programs — which likely have a greater impact on nonmodule costs than on module prices — have been at least somewhat successful in spurring cost reductions,” states the report, which was written by Ryan Wiser, Galen Barbose, and Carla Peterman of Berkeley Lab’s Environmental Energy Technologies Division.

Installations of solar PV systems have grown at a rapid rate in the U.S., and governments have offered various incentives to expand the solar market.

“A goal of government incentive programs is to help drive the cost of PV systems lower. One purpose of this study is to provide reliable information about the costs of installed systems over time,” says Wiser.

The study examined 37,000 grid-connected PV systems installed between 1998 and 2007 in 12 states. It found that average installed costs, in terms of real 2007 dollars per installed watt, declined from $10.50 per watt in 1998 to $7.60 per watt in 2007, equivalent to an average annual reduction of 30 cents per watt or 3.5 percent per year in real dollars.

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