Solar energy pricing at an all-time low
Lower up-front costs and higher efficiency lead to lower overall pricing
Solar energy pricing recently hit an all-time low, with the decrease in costs largely being driven by lower installation prices and improved system efficiency.
This is all according to a recent report by Lawrence Berkeley National Laboratory (Berkeley Lab). The Berkely Lap analysis pointed out that lower solar system installation costs and overall solar project performance improvement combined with “a race to build projects ahead of a reduction in a key federal incentive” dropped solar pricing to a new all-time low.
According to the report, recent pricing agreements had solar energy pricing averaging 5 cents per kilowatt hour (5¢/kWh).
These prices [5¢/kWh] reflect receipt of the 30% federal investment tax credit, which is scheduled to decline to 10% after 2016, and would be higher if not for that incentive. Berkeley Lab
Solar install costs drop 50 percent
According to the report, up-front solar project costs dropped more than 50 percent from 2009 to 2014. The median up-front cost in 2009 was $6.3/W, compare to $3.1/W for 2014 projects.
New solar projects are more efficient
Solar projects completed in 2013 had an average capacity factor of 29.4 percent in 2014, Berkeley Lab pointed out, versus 26.3 percent for projects completed in 2012 and 24.5 percent for projects completed in 2011.
All things considered, the report noted that “solar [is] an increasingly cost-competitive option for utilities” and predicted a “frenzied pace of construction” leading up to the decline in the federal investment tax credit expected to occur at the start of 2017.
Source → Berkeley Lab