A new study on the installed costs of solar photovoltaic (PV) power systems in the U.S. shows that the average cost of these systems declined significantly from 1998 to 2007, but remained relatively flat during the last few years.
Costs differ by region and type of system
Information about differences in costs by region and by installation type emerged from the study. The cost reduction over time was largest for smaller PV systems, such as those used to power individual households. Also, installed costs show significant economies of scale. Systems completed in 2006 or 2007 that were less than two kilowatts in size averaged $9.00 per watt, while systems larger than 750 kilowatts averaged $6.80 per watt.
Installed costs were also found to vary widely across states. Among systems completed in 2006 or 2007 and less than 10 kilowatts, average costs range from a low of $7.60 per watt in Arizona, followed by California and New Jersey, which had average installed costs of $8.10 per watt and $8.40 per watt respectively, to a high of $10.60 per watt in Maryland. Based on these data, and on installed-cost data from the sizable Japanese and German PV markets, the authors suggest that PV costs can be driven lower through sizable deployment programs.
The study also found that the new construction market offers cost advantages for residential PV systems. Among small residential PV systems in California completed in 2006 or 2007, those systems installed in residential new construction cost 60 cents per watt less than comparably-sized systems installed as retrofit applications.