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New LBL "Tracking the Sun" Report: Installed Solar Prices Continue to Fall; Soft Costs the Challenge

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Lawrence Berkeley Laboratories is out with its 5th annual "Tracking the Sun" report, which looks at "historical trends in the installed price (that is, the up-front cost borne by the system owner) of grid-connected PV systems in the United States." A few findings of the report jumped out at us:

  • "Installed [solar PV] prices continued their precipitous decline in 2011," with year-over-year price reductions for installed solar PV systems in the 11%-14% range. In addition, "[p]artial data for the first six months of 2012 indicate that installed prices have continued to fall."
  • These price declines are "largely attributable to falling module prices, which fell by $2.1/W from 2008 through 2011...and have fallen further still in 2012."
  • Non-module costs have also declined over the long-term. However, "[w]ithin the past several years...module prices have declined at a much faster pace than non-module costs, and as a result, non-module costs have grown in terms of their relative share of total system costs."
  • "[T]he fact that non-module costs have remained largely unchanged since 2005 highlights the potential need to identify new and innovative mechanisms to foster greater efficiency and competition within the delivery infrastructure."
  • "[F]urther price reductions will be necessary if the U.S. PV industry is to continue its expansion, given the expectation that PV incentive programs will also continue to ratchet down financial support."
  • "Lower installed prices in Germany and other major international markets suggest that deeper near-term cost reductions in United States are, in fact, possible and may accompany increased market scale."
  • " Targeted policies aimed at specific cost barriers (for example, permitting and interconnection costs), in concert with basic and applied research and development, may...be required in order to sustain the pace of installed price reductions on a long-term basis."