DOE: U.S. solar industry had record cost reductions in 2010

San Francisco, September 16, 2011 – The average cost of going solar in the U.S. decreased in 2010 and through the first half of 2011, according to a report released today by the Department of Energy‘s Lawrence Berkeley National Laboratory.

The latest edition of Lawrence Berkeley National Lab‘s “Tracking the Sun,” an annual report on solar photovoltaic costs in the U.S., examined more than 115,000 PV systems installed between 1998 and 2010 across 42 states. Key findings include:

* The cost of going solar fell for consumers over the past 18 months. The average pre-incentive cost of residential and commercial solar PV systems decreased 17 percent in 2010, the most annual reductions since Lawrence Berkeley National Lab began tracking data. Costs declined another 11 percent in the first half of 2011.

* Market-building policies are effectively driving costs down. Reductions in the costs of installation labor, balance of systems, overhead and other non-module costs fell 18 percent from 2009 to 2010. This is significant because, unlike module costs, which are largely determined by the global market, non-module costs are most readily impacted by state and federal policies that accelerate deployment and remove market barriers.

* U.S. solar incentives are delivering an increasing return on investment. As a result of lower per watt costs, the average size of direct cash incentives from states and utilities as well as dollar-per-watt value of the federal tax incentive have both steadily decreased since their peak.

* Increased market scale would likely achieve additional near-term cost reductions. The average installed cost of small residential PV installations in 2010 was significantly lower in Germany ($4.2/W) than in the United States ($6.9/W), where cumulative grid-connected PV capacity in the two countries through 2010 totaled roughly 17,000 MW and 2,100 MW, respectively.

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