Friday, February 20, 2009

Cost/Watt Installed - Down 27% in last 10 years

The cost of installing solar panels on homes and businesses plunged 27.6 percent from 1998 through 2007, according to a new study that questions some of the conventional wisdom about solar power's price.


Researchers at Lawrence Berkeley National Laboratory examined the costs of 37,000 photovoltaic systems across the country and found the average price fell from $10.50 per watt in 1998 to $7.60 per watt in 2007. Those averages include residential systems as well as larger arrays installed on businesses and do not take into account financial incentives from the federal or state governments.

Smaller, home-size systems averaged $8.30 per watt in 2007, which was more than the average at commercial installations. At that price, a typical 3-kilowatt residential solar system would cost $24,900.

The study's findings, released Thursday, contain one surprise.

For several years, solar prices were widely believed to be rising, the result of a worldwide shortage of the silicon used in most photovoltaic panels. Indeed, Lawrence Berkeley researchers did find a slight increase in prices from 2005 to 2007. But the price hike was small, only about 20 cents per watt, said Galen Barbose, one of the report's authors. And it has probably ended, as the silicon shortage eased.

"In point of fact, the cost of these systems remained relatively flat," said Barbose, a staff research associate at the lab. "So the industry was able to absorb some of those (silicon) price increases."

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