Solar Installation Costs Continue To Fall

Due to a sharp decrease in the price of solar panels, the cost of installing solar energy in California continues to fall. A new report from the Lawrence Berkeley National Laboratory, located at U.C. Berkeley, found that the per watt cost of small rooftop photovoltaic (PV) systems with less than 10 kilowatt capacity declined nationwide from $12 in 1998 to $5.30 in 2012.

In California, the price per watt of installation for small systems dropped from $6.40 in 2011 to $5.70 in 2012.

The report credited 80 percent of these price reductions to the fact that solar panels themselves are becoming cheaper. Between 2008 and 2012, panels dropped by $2.60 per watt. Other factors, referred to as “soft costs” which include employee wages, permitting fees and other equipment needed for installations, remained relatively flat over the same period. The study’s authors pointed out that further reductions could be achieved if these expenditures were lowered through public policy.

“Soft costs are especially important from the perspective of public policy efforts,” said Galen Barbose of Berkeley Lab’s Environmental Energy Technologies Division, and one of the report’s co-authors, in a news release. “Unlike module prices, which are established based on global supply and demand, soft costs can be influenced more directly by local, state and national policies aimed at accelerating deployment and removing market barriers.”

Among the proposals that have been put forward by solar energy industry advocates and lawmakers are reforms to the licensing and permit process to make it more streamlined. There have also been calls to reinvest in the California Solar Initiative, funding for which has largely been spent. But even absent these solutions, it’s clear that a solar electric system is becoming more affordable and accessible to a larger share of the population.