The cost of energy may be going up just about anywhere. But while that’s happening the cost of locally sourced solar power—read solar rooftops or distributed solar photovoltaic (PV) systems—continues to fall dramatically. According to a report, which came out today (Oct. 20), prices for distributed solar power dropped by 12 percent to 19 percent across the U.S. in 2013, which means it’s cheaper than ever for homeowners to go solar—and it’s getting even less expensive in 2014.
The new report, Photovoltaic (PV) Pricing Trends: Historical, Recent, and Near-Term Projections (2014 Edition), comes from the National Renewable Energy Laboratory (NREL) and Lawrence Berkeley National Laboratory (LBNL). "These price drops are consistent with previous annual reductions achieved since 2010, when the Energy Department's SunShot Initiative was established," said NREL's David Feldman, a lead author of the report.
"However, the report also indicates that there are significant variations in reported pricing both geographically and across market segments due to a variety of factors, including value-based pricing based on local competition within the marketplace and prevailing electric retail rates,” Feldman explained. “Other factors include differences in specific system configurations such as panel efficiency, mounting structure, and geographic location; and the time lags between commitments and commercial operation for utility-scale systems."
Looking ahead, the report predicted that prices for residential solar will continue to decline in 2014 by another 3 percent to 12 percent. As Feldman mentioned above the decline in prices will be relative to system location and market segment. It’s also expected that the price drops will continue through at least 2016, which NREL said, will keep the U.S. on the path to meet the SunShot Initiative’s 2020 targets. At that point solar power will be at parity with grid-power—without any state or federal subsidies.
"There is still considerable uncertainty as to how low PV system prices will drop in the next five to 10 years," Feldman cautioned. "However, there appears to be an emerging consensus that the SunShot's price reduction targets are within reach and more and more likely to be realized. We see this reflected in the fact that many of the current projections are far lower than projections made in the recent past by the same sources."
The report also looked at utility-scale solar power pricing trends. It found that the utility-scale PV system prices that NREL and LBL modeled fell below $2 a watt in 2013 and that they are continuing to decline to roughly $1.80 per watt in 2014. That is 59 percent below what modeled pricing showed in 2010.Tweet