U.S. installed solar prices, varying widely across individual projects, continued to drop through 2017 and into 2018, according to the latest Tracking the Sun report from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab).
The report, now in its 11th edition, focuses on solar systems installed through the end of 2017 and includes preliminary trends in the first half of this year. The information comes primarily from state agencies and utilities covering 1.3 million individual PV systems, representing 81% of U.S. residential and non-residential PV systems installed through 2017. Further, the analysis of installed pricing trends is based on a subset of roughly 770,000 systems, Berkeley Lab explains.
According to the report, national median installed prices in 2017 were $3.7/W for residential systems (a $0.2/W, or 6%, decline from the prior year), $3.1/W for small non-residential systems (a $0.4/W, or 11%, decline) and $2.2/W (a $0.1/W, or 5%, decline) for large non-residential systems.
Further, the first half of 2018 shows an additional drop of $0.1/W for residential and small non-residential systems and effectively no change for large non-residential systems. The report says these recent trends are generally consistent with the pace of price declines since 2014, and they also mark a slowing from the years immediately preceding (2009-2013), when prices fell by roughly $1/W per year.
Among residential systems installed in 2017, 20% were priced below $3.0/W (the 20th percentile value), while another 20% were above the 80th percentile at $4.5/W, according to the data. Non-residential systems also exhibit wide spreads, albeit shifted downward, from $2.4/W to $4.1/W for small non-residential and from $1.8/W to $2.8/W for large non-residential projects. These pricing spreads have persisted over time and are reflective of the heterogeneity in PV systems and markets, as well as suggestive of the potential for further price declines, according to Berkeley Lab.
State-level median installed prices in 2017 ranged from $2.6/W to $4.5/W for residential systems, from $2.2/W to $4.0/W for small non-residential systems and from $2.1/W to $2.4/W for large non-residential systems. Three of the largest state markets (California, Massachusetts and New York) are relatively high-priced, pulling overall U.S. median prices upward. These cross-state pricing differences reflect both idiosyncratic features of particular states, as well as more fundamental differences related to market and policy conditions, the report says.
Furthermore, Berkeley Lab also observed significant pricing differences across system sizes within each customer segment (with median prices ranging from $3.2/W to $4.5/W across residential systems of varying size and from $2.1/W to $3.7/W across non-residential systems); between third-party-owned (TPO) and host-owned residential systems ($3.3/W vs. $3.8/W); across residential installers ($2.1/W to $9.6/W for host-owned systems and $1.1/W to $5.1/W for TPO systems); between residential new construction and retrofit systems in California ($2.3/W vs. $3.9/W); between large non-residential systems at commercial sites and tax-exempt customer sites ($2.1/W vs. $2.6/W); and between systems with standard vs. premium efficiency modules ($3.6/W vs. $4.2/W among residential systems).
In addition, the report notes that the installed prices in the U.S. are much higher than in most other major national solar PV markets. Berkeley Lab attributes this to differences in soft costs, which are lower in other countries due to, for example, solar industry business models, market maturity, permitting and interconnection processes, and labor rates.