It shouldn’t come as a surprise that the price of solar has been dropping. A new Tracking the Sun report from the Department of Energy Lawrence Berkeley National Labs (LBNL) confirms the trend: solar keeps getting cheaper.
According to the report, median installed prices fell by an average of $0.5/W (6-7%) annually between 1998 and 2012. That rate has accelerated recently, as seen in the drop of $0.3-0.9/W (6-14%) from just 2011 to 2012. Price drops like these have facilitated a more than fourfold increase in U.S solar installations between 2009 and 2012.
The California data in so far for 2013 show the trend continuing, with prices dropping even further.
The LBNL report found that prices vary widely between states and even within the same state. That’s because of regional differences like labor costs, market size, and installer competition. But even with these differences, the overall trend is clear.
Most of the drops so far have come from the falling cost of modules, with soft costs — like permitting and customer acquisition — remaining relatively flat. This represents a major opportunity for further price drops, and will be especially important if panel costs stabilize.
As the study notes, prices have come down in other countries in part because of efforts there to lower soft costs. While that means that solar systems cost more in the U.S. than in other major markets, some progress is being made on the home front. The mayor of Lancaster, California has streamlined permitting to cost just $61 and take only 15 minutes — compared to two months in some areas. Other California cities are following suit, reducing customer costs by as much as $3,500. And California is not alone in the effort to streamline permitting.
At the same time that installed prices have dropped, the report notes, incentives and rebates have also been decreasing. So these cuts in soft costs will be all the more crucial to increasing solar adoption.
Getting there will mean more than streamlining permitting. The report’s authors echo what we’ve been hearing for a while now: to reduce soft costs and ensure that solar remains viable, we need stable and consistent policies that support solar. Let’s hope that reports like these drive that message home and help lead to legislative action.
In the meantime, more organizations and companies are joining in the effort to lower soft costs. One example is Sunible.com, an online marketplace for solar that’s radically simplifying the home solar buying experience. Sunible.com is not only making it easier for homeowners to go solar but also making it easier for installers to connect with those homeowners, thereby lowering acquisition costs.
With more efforts like these, and solid policies as a foundation, we can look forward to a thriving solar industry in the years ahead.