Renewables, Solar

Report documents drop in solar PV installed cost

20 February 2009 – The installed cost of solar photovoltaic (PV) power systems fell from 1998 to 2007, mostly due to labor, marketing, overhead, inverters and balance of system cost reductions. Average installed costs fell from $10.50 a watt in 1998 to $7.60 a watt in 2007. That was an average annual reduction of 3.5 percent a year in real dollars.

The study was done by researchers at the Department of Energy’s Lawrence Berkeley National Laboratory and looked at 37,000 grid-connected PV systems installed between 1998 and 2007 in 12 states.

Researchers said their findings suggest state and local PV programs were successful in reducing costs. Solar PV installations have grown rapidly in the U.S., and governments have offered various incentives to expand the solar market.

The report also showed the benefits of economies of scale. Systems completed in 2006 or 2007 that were less than 2 kW in size averaged $9 a watt in cost. Systems larger than 750 kW averaged $6.80 a watt.

Installed costs were cheapest in Arizona, California and New Jersey at about $7.60 a watt. They were highest in Maryland, at $10.60 a watt.