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 a report released on September 15 by DOE’s Lawrence Berkeley National Laboratory (LBNL). The average installed cost of residential and commercial PV systems completed in 2010 fell by roughly 17 percent from 2009, and by an additional 11 percent within the first six months of 2011.

The reductions reflect the drop in both the cost of PV modules as well as non-module costs such as installation labor, marketing, overhead, inverters, and the balance of systems. According to the report, “Tracking the Sun IV: An Historical Summary of the Installed Cost of Photovoltaics in the United States from 1998 to 2010,” average non-module costs for residential and commercial systems declined by roughly 18 percent from 2009 to 2010.

Regarding utility-sector PV, costs varied widely 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. 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 study, which examined more than 115,000 residential, commercial, and utility-sector PV systems installed between 1998 and 2010 across 42 states, describes trends in the installed cost of PV in the United States.

The study also highlights differences in installed costs by region and by system size and installation type. Across states, for example, the average cost of PV systems installed in 2010 that were less than 10 kW 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 did those installed as retrofits to existing homes.

The LBNL noted that the average size of direct cash incentives provided through state and utility PV incentive programs has declined steadily since their peak in 2002. The research was supported by funding from DOE and the Clean Energy States Alliance, a national nonprofit coalition of leading state clean energy programs. See the LBNL press release and the report.

Ernie Tucker is an NREL staff writer who has worked as a writer and editor in a variety of media, including newspapers, television and online content.

This article was first published in the U.S. Department of Energy’s EERE Network News and was reprinted with permission.