National Lab: Costs Continue To Drop For Residential, Commercial PV


Compared to a year earlier, installed costs of solar PV systems declined across two of three sectors in the first quarter of 2018, according to an annual cost benchmarking study from the U.S. Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL).

According to the report, “U.S. Solar Photovoltaic System Cost Benchmark: Q1 2018,” the Q1 PV cost benchmarks are $2.70/W of direct current (Wdc) for residential systems (a 4.9% cost decline), $1.83/Wdc for commercial systems (a 2.6% decrease), $1.06/Wdc for fixed-tilt utility-scale systems (a 1.9% increase), and $1.13/Wdc for one-axis-tracking utility-scale systems (a 0.9% increase).

“Higher-voltage inverter designs, lower inverter prices and higher module efficiencies contributed to cost reductions,” says Ran Fu, who authored the report with fellow NREL researchers David Feldman, Mike Woodhouse and Robert Margolis.

On the other hand, according to the researchers, higher module prices, higher labor wages and higher steel prices raised costs. In the utility sector, where PV modules represent a larger portion of overall project costs, increased module prices helped to drive the slight increase in installed solar costs, the report says.

This annual cost benchmarking effort first began in 2010, notes NREL.

Fu and Margolis, along with fellow NREL researcher Timothy Remo, authored a companion report that provides NREL’s first cost benchmarking of energy storage and PV-plus-storage systems.

The report, “2018 U.S. Utility-Scale Photovoltaics-Plus-Energy Storage System Cost Benchmark,” models the costs of several stand-alone lithium-ion storage and PV-plus-storage system configurations.

For a stand-alone storage system, assuming a constant battery price of $209/kWh, the installed system costs vary from $380/kWh for a four-hour battery system to $895/kWh for a 30-minute battery system.

Historically, most PV-plus-storage systems have installed PV and storage systems in separate locations, NREL says. However, the report finds that co-locating the PV and storage subsystems reduces costs related to site preparation, land acquisition, permitting, interconnection, labor and hardware.

According to NREL, both reports and their models can be used to estimate future cost-reduction opportunities for PV and PV-plus-storage systems, helping to guide research and track costs. The reports were funded by the DOE’s Solar Energy Technologies Office.

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