Cost of solar energy declines

Photo voltaic (PV) systems in the US are getting to be better value, according to the Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab).

The average cost fell by more than 30 percent from 1998 to 2008, dropping four percent between 2007 and 2008.

“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 report co-author Ryan Wiser.

According to the report, the most recent decline is mainly because of of a decrease in PV module costs as manufacturing capacity has expanded.

The study tracked the installed cost of 52,000 grid-connected PV systems installed between 1998 and 2008 in 16 states. It found that average installed costs, in terms of real 2008 dollars, declined from $10.80 per watt in 1998 to $7.50 per Watt in 2008.

The cost reduction over time was largest for smaller PV systems, such as those used to power individual households.

As you might expect, installed costs were also found to vary widely across states. Among systems completed in 2008 and less than 10 kW in size, average costs range from a low of $7.30 per Watt in Arizona,to a high of $9.90 per Watt in Pennsylvania and Ohio.

Based on this, and on installed cost data from the sizable German and Japanese PV markets, the authors suggest that PV costs can be lowered through large-scale deployment programs.

The study also found that the average size of direct cash incentives provided by state and local PV incentive programs declined over the  study period. Other sources of incentives, however, such as federal investment tax credits (ITCs), have become more significant.

The report is available here.