Tracking the Sun: Installed Price Trends for Distributed Photovoltaic Systems in the United States - 2018 Edition

Berkeley Lab’s Tracking the Sun report series is dedicated to summarizing installed prices and other trends among grid-connected, distributed solar photovoltaic (PV) systems in the United States. The present report, the 11^th edition in the series, focuses on systems installed through year-end 2017, with preliminary trends for the first half of 2018. As in years past, the primary emphasis is on describing changes in installed prices over time and variation in pricing across projects based on location, project ownership, system design, and other attributes. New to this year, however, is an expanded discussion of other project characteristics in the large underlying data sample. Future editions will include more of such material, beyond the report’s traditional focus on installed pricing.

The trends described in this report derive primarily from project-level data reported to state agencies and utilities that administer PV incentive programs, solar renewable energy credit (SREC) registration systems, or interconnection processes. In total, data were collected and cleaned for more than 1.3 million individual PV systems, representing 81% of U.S. residential and non-residential PV systems installed through 2017. The analysis of installed pricing trends is based on a subset of roughly 770,000 systems with available installed price data.

Key findings from this year’s report include the following:

• Installed Prices Continued to Fall through 2017 and into 2018. National median installed prices in 2017 were $3.7 per watt (W) for residential systems (a $0.2/W or 6% decline from the prior year), $3.1/W for small non-residential systems (a $0.4/W or 11% decline), and $2.2/W (a $0.1/W or 5% decline) for large non-residential systems. Data for the first half of 2018 show an additional drop of $0.1/W for residential and small non-residential systems, and effectively no change for large non-residential systems. These recent trends are generally consistent with the pace of price declines since 2014, and mark a slowing from the years immediately preceding (2009-2013) when prices fell by roughly $1/W per year.
• Installed Prices Vary Widely Across Individual Projects. Among residential systems installed in 2017, 20% were priced below $3.0/W (the 20th percentile value) while another 20% were above the 80th percentile at $4.5/W. Non-residential systems also exhibit wide spreads, albeit shifted downward, from $2.4/W to $4.1/W for small non-residential and from $1.8/W to $2.8/W for large non-residential projects. These pricing spreads have persisted over time and are both reflective of the heterogeneity in PV systems and markets, as well as suggestive of the potential for further price declines.
• Pronounced Pricing Disparities Exist Across States. State-level median installed prices in 2017 ranged from $2.6/W to $4.5/W for residential systems, from $2.2/W to $4.0/W for small non-residential systems, and from $2.1/W to $2.4/W for large non-residential systems. Three of the largest state markets (California, Massachusetts, and New York) are relatively high-priced, pulling overall U.S. median prices upward. These cross-state pricing differences reflect both idiosyncratic features of particular states as well as more-fundamental differences related to market and policy conditions.
• Installed Pricing Variation Also Reflects Differences in System Design, Installer, and Customer Characteristics (among other factors). Significant pricing differences were also observed across system sizes within each customer segment (with median prices ranging from $3.2/W to $4.5/W across residential systems of varying size, and from $2.1/W to $3.7/W across non-residential systems), between third-party owned (TPO) and host-owned residential systems ($3.3/W vs. $3.8/W), across residential installers ($2.1/W to $9.6/W for host-owned systems and $1.1/W to $5.1/W for TPO systems), between residential new construction and retrofit systems in California ($2.3/W vs. $3.9/W), between large non-residential systems at commercial sites and tax-exempt customer sites ($2.1/W vs. $2.6/W), and between systems with standard vs. premium efficiency modules ($3.6/W vs. $4.2/W among residential systems).

A public version of the underlying dataset can be downloaded at https://emp.lbl.gov/tracking-the-sun.

A webinar summarizing key findings from the report recorded on October 4^th, 2018 can be found here.