Installed cost of solar photovoltaic systems in the US declined significantly in 2010 and 2011

September 15, 2011

The installed cost of solar photovoltaic (PV) power systems in the United States fell substantially in 2010 and into the first half of 2011, according to the latest edition of an annual PV cost tracking report released by the Department of Energy's Lawrence Berkeley National Laboratory (Berkeley Lab).

The average installed cost of residential and commercial PV systems completed in 2010 fell by roughly 17 percent from the year before, and by an additional 11 percent within the first six months of 2011. These recent installed cost reductions are attributable, in part, to dramatic reductions in the price of PV modules. Galen Barbose of Berkeley Lab's Environmental Energy Technologies Division and co-author of the report explains: "Wholesale PV module prices have fallen precipitously since about 2008, and those upstream cost reductions have made their way through to consumers."

The report indicates that non-module costs—such as installation labor, marketing, overhead, inverters, and the balance of systems—also fell for residential and commercial PV systems in 2010. "The drop in non-module costs is especially important," notes report co-author and Berkeley Lab scientist Ryan Wiser, "as those are the costs that can be most readily influenced by solar policies aimed at accelerating deployment and removing market barriers, as opposed to research and development programs that are also aimed at reducing module costs." According to the report, average non-module costs for residential and commercial systems declined by roughly 18 percent from 2009 to 2010.

Turning to utility-sector PV, costs varied over a wide range for systems installed in 2010, with the cost of systems greater than 5,000 kilowatts (kW) ranging from $2.90 per Watt (W) to $6.20/W, reflecting differences in project size and system configuration, as well as the unique characteristics of certain individual projects. Consistent with continued cost reductions, current benchmarks for the installed cost of prototypical, large utility-scale PV projects generally range from $3.80/W to $4.40/W.

The market for solar PV systems in the United States has grown rapidly over the past decade, as national, state and local governments offered various incentives to expand the solar market and accelerate cost reductions. The study—the fourth in Berkeley Lab's "Tracking the Sun" report series—describes trends in the installed cost of PV in the United States, and examined more than 115,000 residential, commercial and utility-sector PV systems installed between 1998 and 2010 across 42 states, representing roughly 78 percent of all grid-connected PV capacity installed in the United States. Naïm Darghouth, also with Berkeley Lab, explains that "the study is intended to provide policy makers and industry observers with a reliable and detailed set of historical benchmarks for tracking and understanding past trends in the installed cost of PV."

Costs Differ by Region and by Size and Type of System

The study also highlights differences in installed costs by region and by system size and installation type. Comparing across U.S. states, for example, the average cost of PV systems installed in 2010 and less than 10 kilowatts (kW) in size ranged from $6.30/W to $8.40/W depending on the state. The report also found that residential PV systems installed on new homes had significantly lower average installed costs than those installed as retrofits to existing homes.

Based on these data and on installed cost data from the sizable German and Japanese PV markets, the authors suggest that PV costs may be driven lower through large-scale deployment programs, but that other factors are also important in achieving cost reductions.

The report also shows that PV installed costs exhibit significant economies of scale. Among systems installed in 2010, those smaller than 2 kW averaged $9.80/W, while large commercial systems >1,000 kW averaged $5.20/W; partial-year data for 2011 suggests that average costs declined even further in 2011. Large utility-sector systems installed in 2010 registered even lower costs, with a number of systems in the $3.00/W to $4.00/W range.

Cost Declines for PV System Owners in 2010 Were Partially Offset by Falling Incentives

The average size of direct cash incentives provided through state and utility PV incentive programs has declined steadily since their peak in 2002. The dollar-per-Watt benefit of the federal investment tax credit (ITC) and Treasury grant in lieu of the ITC, which are based on a percentage of installed cost, also fell in 2010 as a result of the drop in average installed costs.

The reduced value of federal, state, and utility incentives in 2010 partially offset the decline in installed costs. Therefore, while pre-incentive installed costs fell by $1.00/W and $1.50/W for residential and commercial PV in 2010, respectively, the decline in "net" (or post-incentive) installed costs fell by $0.40/W for residential PV and by $0.80/W for commercial PV.

Explore further: Study finds cloudy outlook for solar panels

More information: The report "Tracking the Sun IV: An Historical Summary of the Installed Cost of Photovoltaics in the United States from 1998 to 2010," by Galen Barbose, Naïm Darghouth, and Ryan Wiser, may be downloaded from

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2.3 / 5 (3) Sep 15, 2011
from absurdly expensive to merely ridiculous. Keep working boys, another 15 to 20 years might do it.
4 / 5 (4) Sep 15, 2011
from absurdly expensive to merely ridiculous. Keep working boys, another 15 to 20 years might do it.

Actually, for the warranted lifetime of the product, this is less than half the cost of grid power, in some locations it's more like 1/4th the cost of grid power.

By the time you figure incentives: state and federal tax breaks, etc; I really got no clue why solar isn't the standard, well, except that Americans are irrational and don't make long term plans, that much we know...
not rated yet Sep 15, 2011
The real story isn't that costs have come down on solar panel installs. Who wants solar panels anyway when we have much better solar technology and have had it since the 70's. A concentrated solar dish from SES ( or Infinia ( will output about 1kwh per square foot of dish area with proper sunlight available of course. But I'm sorry, the gov has outlawed that technology to all but power companies. That's even though the Infinia was designed for residential customers. We have plenty of off-grid type technology in this country, but the system of organized crime that's running our gov will NEVER let you have it!
3 / 5 (2) Sep 15, 2011

Your numbers are a bit wrong, but the basic substance of your post is correct.

People are completely ignorant, and Glenn Beck was a damn liar, as were most of his guest speakers AND audience. Glad Fox News canned him.

Wind and solar are far cheaper than coal under realistic conditions over the lifetime of the systems.

Even at just 12% of peak output, a wind turbine will produce 30 times as much power per unit price vs coal during it's expected system life time, and that's just compared to the price of the coal itself.

Solar dishes and similar technologies are a bit more expensive than Wind, but still cheaper than coal for the lifetime of the product, and ten times as energy dense as wind.

Unfortunately, about 90% of our people are too ignorant to know this, and much of the remaining 10% don't want it to happen.

It's ridiculous how useless our system of economics and our government have become because of corruption and greed...
not rated yet Sep 16, 2011
A concentrated solar dish from SES ( or Infinia ( will output about 1kwh per square foot of dish area

That's a bit unbelievable, because that would be 10-12 times higher than the solar constant (which is the total power the sun delivers to a square *meter* of Earth - which is in northern latitudes about 800W in summer, midday under a cloudless sky.)

They don't happen to also sell perpetuum mobiles? Or snake oil?

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