Photovoltaic System

Pricing Trends
Historical, Recent, and Near-Term
Projections
2014 Edition

energy.gov/sunshot
NREL/PR-6A20-62558

September 22, 2014

David Feldman1, Galen Barbose2, Robert

Margolis1, Ted James1, Samantha Weaver2, Nam
Darghouth2, Ran Fu1, Carolyn Davidson1, Sam
2
Booth1, and Ryan Wiser
1

National
Renewable Energy Laboratory
energy.gov/sunshot
Berkeley National Laboratory

2Lawrence

Contents

Introduction and Summary

Historical and Recent Reported Prices
Recent Prices from Bottom-up Cost Analysis
Comparison Between Reported and Bottom-up Price Estimates
Near Future Price Trends
Conclusion

2
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Introduction
There exists a need for reliable and comprehensive information on PV system
pricing.
Differences between various attempts to estimate the cost and price of
solar in the market; this briefing is designed to explain some of these
variances
Rapid market growth and changes to PV system pricing in recent years
Policy support for PV deployment premised on stimulating cost reductions
through market scale and development
DOE SunShot Initiative seeks to reduce PV system prices 75% over the
2010-2020 period.
This briefing provides a high-level overview of historical, recent, and
projected near-term PV system pricing trends in the United States, drawing
on several ongoing research activities at LBNL and NREL:
LBNLs annual Tracking the Sun report series (reported system prices)
NRELs bottom-up PV cost modeling (modeled system prices)
NRELs synthesis of PV market data and projections.
3
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Executive Summary

Reported pricing for PV system installations completed in 2013, based in part on data reported to PV incentive programs:

Residential and small commercial (10 kW) was $4.69 /W (median)

Large commercial (>100 kW) was $3.89/W (median)

Utility-scale (5 MW, ground-mounted) was $3.00/W (capacity weighted average).

Modeled solar PV system prices, using industry validated tools, quoted in Q4 2012 (and expected to be installed in 2013):

Residential (5 kW) was $3.71/W

Commercial (223 kW) was $2.61/W

Utility-scale (185 MW) was $1.92/W.

Delta between reported and modeled pricing is due to various factors, such as market fundamentals (e.g., large fraction of
data for reported prices is from CA and other high-priced markets), inefficient pricing (i.e., value-based pricing), project
characteristics (e.g., high-efficiency panels with single-axis tracking), and long temporal lags between contract signing and
installation for large utility-scale projects .

Reported system prices of residential and commercial PV systems declined 6%7% per year, on average, from 1998
2013, and by 12%15% from 20122013, depending on system size.

Market analysts expect system prices to continue to fall, but module prices to stabilize in near-term.

Modeled system prices quoted in Q4 2013 (and expected to be installed in 2014):

Residential (5 kW) was $3.29/W, a reduction of 12% from Q4 2012

Consistent with leading residential installers pricing, such as SolarCitys reported Q2 2014 costs ($3.03/W), plus
a reasonable operating profit margin

Commercial (200 kW) was $2.54/W, a reduction of 3% from Q4 2012

Utility-scale (185 MW) was $1.80/W, a reduction of 5% from Q4 2012.

Note: All PV installed price data are reported in terms of real 2013 dollars per Watt-DC.

4
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Reported, Bottom-up, and Analyst-projected

Average U.S. PV System Prices over Time
Analyst Expectations, Distributed PV
Analyst Expectations, Utility-Scale
Reported System Price, Residential (Median)
Reported System Price, Commercial (Median)
Reported System Price, Utility (Cap-Wtd. Avg.)
Modeled System Price, Residential
Modeled System Price, Commercial
Modeled System Price, Utility

$12

2013$/WDC

$10
$8
$6
$4
$2

Global Module Price Index

$0
2007

2008

2009

2010

2011

Analyst Expectations of Module Price

2012

2013

2014P

2015P

2016P

Installation Year

All methodologies show a downward trend in PV system pricing

Reported pricing and modeled benchmarks historically had similar results, however have recently
diverged in estimated pricing.

Note: The reported system price for the residential market is the median price reported for systems less than or equal to 10 kW.
The modeled residential system price represents a ~5 kW system. The reported system price for the commercial market is the
median price reported for commercial systems greater than 100 kW. The modeled commercial system price represents a ~200 kW
rooftop system. The reported system price for the utility-scale market is the capacity-weighted average reported price for groundmounted systems greater than or equal to 5 MW in size, with a capacity-weighted average project size of 150 MW in 2013. The
modeled system price of utility-scale systems represents a ~175 MW fixed-tilt ground-mounted system. Modeled system prices for
all sectors are representative of bids issued in the fourth quarter of the previous year. The Global Module Price Index is the
average module selling price for the first buyer (P Mints SPV Market Research).

5
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Contents

Introduction and Summary

Historical and Recent Reported Prices
Recent Prices from Bottom-up Cost Analysis
Comparison Between Reported and Bottom-up Price Estimates
Near Future Price Trends
Conclusion

6
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Data Sources and Methodology for Reported

Installed Prices
Prices are derived from project-level data reported for PV systems installed
through year-end 2013 (and from a more limited set of states for H1 2014)
Data Sources
Residential and commercial PV (<5 MW and/or roof-mounted): Project-level data
obtained from 60 PV incentive programs, spanning 32 states
Utility-scale PV (>5 MW ground-mounted): Sourced from FERC Form 1, Section
1603 Grant Program, SEC filings, company presentations, trade press articles

Raw sample represents 80% of all grid-connected PV capacity installed in the

United States through 2013 and 78% of all 2013 capacity additions
All residential and commercial projects for which reported prices were
deemed likely to represent appraised values, rather than prices paid to the
installer/EPC, were removed from the final data sample used for analysis
After removing these and other systems, the final data sample represents 71% of
all grid-connected PV capacity installed in the United States through 2013 and 64%
of all 2013 capacity additions.
7
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Median Reported Installed Prices of Residential

and Commercial PV Systems over Time
Installed System Price and
Global Module Price Index (2013$/WDC)

$14

Residential & Commercial PV

(Median Values)

$12

10 kW
10-100 kW

$10

>100 kW

$8
$6
$4
$2
$0

Global Module Price Index

1998
n=33
0.2 MW

1999
n=162
0.8 MW

2000
n=180
0.8 MW

2001
n=1,302
6 MW

2002
n=2,441
18 MW

2003
n=3,480
31 MW

2004
n=5,657
44 MW

2005
n=5,797
64 MW

2006
2007
2008
2009
2010
2011
2012
2013
n=8,943 n=12,764 n=13,686 n=24,319 n=36,455 n=42,360 n=51,753 n=50,614
92 MW 132 MW 238 MW 303 MW 506 MW 981 MW 1174 MW 1098 MW

Installation Year

Note: Median installed prices are shown only if 15 or more observations are available for the individual size range. The Global Module Price Index is SPV Market
Researchs average module selling price for the first buyer (P. Mints).

Since 1998, reported PV system prices have fallen by 6-8% per year on average
From 2012 to 2013, reported prices fell by $0.65/W (12%) for systems 10 kW and by
$0.70/W (15%) for systems >100 kW
By comparison, global annual average module prices rose by $0.07/W from 2012-2013.
8
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Installed Price (2013$/WDC)

Preliminary Price Trends for Systems Installed

in H1 2014 from a Subset of State Markets
$8

Residential & Commercial PV: AZ, CA, MA, MD, NJ, NY

(Median Values)

$6

2013

2014 (H1)

$4
$2
$0

$4.74

$4.50

10
10kW
kW
n=32,517 (2013)
n=12,902 (H1 2014)

$4.36

$3.97

10-100 kW
10-100
kW
n=5,851 (2013)
n=2,372 (H1 2014)

$3.99

$3.52

>100 kW
>100
kW
n=912 (2013)
n=314 (H1 2014)

Note: The 2013 and H1 2014 values in this figure are based on data from a smaller set of states than elsewhere in this section, and thus the 2013
values differ from the national median values cited previously.

Installations in a number of the larger PV incentive programs and state markets have
shown continued price declines into H1 2014
Median reported prices fell by roughly $0.24-0.48/W (5-12%) during the first half of
2014, relative to 2013, across the three size ranges shown.
9
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Variation in Reported Price by System Size:

Residential and Commercial PV Systems in 2013
Installed Price (2013$/WDC)

$8

Residential & Commercial

PV Systems Installed in 2013
(Median and 20th/80th Percentiles)

$6

$4

$2

$0

$4.76

$4.83

$4.57

$4.30

$4.38

2 kW
n=1,734
3 MW

2-5 kW
n=15,590
59 MW

5-10 kW
n=25,068
178 MW

10-30 kW
n=6,191
85 MW

30-100 kW
n=911
51 MW

$4.24

$4.15

$3.80

100-250 kW 250-500 kW 500-1000 kW

n=503
n=264
n=157
83 MW
93 MW
103 MW

$3.08
>1000 kW
n=196
442 MW

System Size Range (kWDC)

Reported prices exhibit clear economies of scale, with the median price for the largest
commercial systems 35% lower than for the smallest residential systems (and lower
installed prices for utility-scale PV, as shown on later slides)
Substantial variability in reported prices exists within each system size range, reflecting
different regional drivers of pricing, which may include market
10
and policy dynamics, project/site-specifics, and installer specifics.
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Variation in Reported Price by State:

Residential and Small Commercial (10 kW) PV in 2013

$7

Systems 10 kWDC Installed in 2013

(Median and 20th/80th Percentiles)

$6
$5
$4
$3

$5.31

$5.21

$5.01

$4.94

$4.79

$4.75

$4.71

PA MA NM
91 2697 833

$4.66

NV
141

$4.56

UT NJ CO CT AZ DE
68 3156 2330 626 4633 20

$4.47

$4.44

$4.46

$4.19

$4.45

$4.16

$4.06

$4.03

$3.99

TX ME DC NH
796 258 104 241

$3.95

FL
19

$3.85

$3.83

$3.71

$0

$3.48

$1

$3.47

$2
$3.33

Installed Price (2013$/WDC)

$8

RI NY MD VT OR WI CA IL MN NC
24 1455 56 756 349 144 25273 146 60 480

State andSample Size

Note: Numbers in parentheses below each state indicate the number of observations; installed price data are shown only if 15 or more observations
are available for a given state.

The median reported price differs by ~$2/W between the lowest- and highest-priced
states, though similar variability also exists within many individual states
Reported prices in California pull the overall sample median upwards
Reported price differentials across states reflect a wide array of potential factors,
including: market size and maturity, incentive levels, sales taxes,
administrative costs, labor costs, and project characteristics.
energy.gov/sunshot

11

Variation in Reported Price by State:

Large Commercial (>100 kW) PV Systems in 2013

$7

Installed Price (2013$/WDC)

$6

Systems >100 kWDC Installed in 2013

(Median and 20th/80th Percentiles)

$5
$4
$3
$2
$1
$0

$2.54

$2.65

$3.40

NC
79

CO
37

MA
117

$3.54
NJ
261
State (Sample Size)

$3.78

$4.26

$5.32

NY
29

CA
404

AZ
186

Note: Numbers in parentheses below each state indicate the number of observations; median installed prices are shown only if 15 or more
observations are available for a given state.

Median reported prices also vary widely across states for large commercial systems
(i.e., a difference of $2.79/W between the lowest- and highest-priced states), though
some caution is warranted given small sample sizes for individual states
Variation across states reflect the same kinds of factors cited on prior slide (e.g.,
preponderance of large ground-mounted systems in NC, non-profit
and public agency projects in CA, etc.).
energy.gov/sunshot

12

Installed Price Data for Utility-scale PV:

Important Notes and Caveats

Utility-scale PV is defined as ground-mounted systems 5 MW, regardless of

whether electricity is delivered to utility or customer
Analysis considers only entire projects (not individual phases)
Project sample consists of 100 fully operational projects installed through yearend 2013, totaling roughly 3,200 MW (88% of total U.S. utility-scale)
A few important caveats:
Significant and uncertain lags exist between when projects are contracted
and installed (i.e., prices reported for projects installed in 2013 may reflect
PPAs or EPC contracts signed in 2009-2012)
Data reliability is mixed, depending on the data sources available for any
individual project, with possible inconsistencies in the scope of cost
components captured
Focus is on reported installed prices rather than levelized cost of electricity,
and thus ignores performance differences across system configurations.
13
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Reported Price of Utility-scale PV Projects

over Time
Installed Price (2013$/WDC)

$10
$8

Utility-Scale PV

Crystalline, Tracking

Thin-Film, Fixed-Tilt

Thin-Film, Tracking

CPV, Tracking

Cap-Wtd. Averages

$6
$4
$2
$0

2007-2009

n=5 (88 MW)

Crystalline, Fixed-Tilt

2010

n=10 (204 MW)

2011

n=26 (482 MW)

Installation Year

2012
n=34 (1019 MW)

2013

n=25 (1441 MW)

Prices have declined over time, but little movement between projects installed in 2012 and 2013
Capacity-weighted average prices were $2.97/W for crystalline, fixed-tilt; $3.12/W for crystalline
with tracking; and $2.72/W for thin-film, fixed-tilt systems completed in 2013
Majority of 2013 systems fall within a range of roughly $2.60/W to $3.20/W
Wide price distribution within each system type reflects variation in system size, other project
characteristics, market and policy conditions, and contracting date
14
(e.g., outlying 2013 project, LADWP Pine Tree Solar Project, was
energy.gov/sunshot
contracted in 2010).

Contents

Introduction and Summary

Historical and Recent Reported Prices
Recent Prices from Bottom-up Cost Analysis
Comparison Between Reported and Bottom-up Price Estimates
Near Future Price Trends
Conclusion

15
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Methodology for Bottom-up Modeling

Detailed system pricing models for specific PV system designs were developed
in collaboration with industry and account for all materials, labor, overhead
and profit, land acquisition and preparation costs, and regulatory costs for a PV
system up to the point of grid tie-in
Better able to determine individual components contributions to total
system price
Input data for NREL models are compiled from numerous industry and primary
sources, for each component of a system incurred by a manufacturer and/or
installer, and validated with manufacturers and installers (more detail on this
methodology can be found in Goodrich et al. 2012)
Dialogue created differentiates the interview method from the survey
method by allowing for greater specificity and feedback of results
Modeled prices represent installer bid or quoted prices for the time periods
noted
Modeled system sizes are similar for each market segment, and are described
16
below the figures.
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Bottom-up Modeled System Price of PV

Systems by Sector, Q4 09 - Q4 13
$8

$6.91

$7

$6.06

2013$/WDC

$6

$5.11

$5

$4.28

$4

$4.74

$3.74

$3.26

$3.29

$3

$4.36
$2.65

BOS
Inverter
Module
$3.74
$2.54

$2.54

$2

$1.94

$1.80

$1
$0
Q4
2009

Q4
2010

Q4
2011
Residential

Q4
2012

Q4
2013

Q4
2009

Q4
2010

Q4
2011

Q4
2012

Commercial

Q4
2013

Q4
2009

Q4
2010

Q4
2011

Q4
2012

Q4
2013

Utility ground mount (Fixed axis)

Since Q4 2009, modeled system prices fell between 16% 19% per year
1/2 - 2/3 of reduction attributed to module price reductions
From Q4 12 to Q4 13, modeled system prices fell between $0.07/W - $0.44/W, or 3-12%
Q4 2013 bottom-up modeled residential system price of $3.29/W is consistent with leading
residential installers pricing, such as SolarCitys reported Q2 2014 costs ($3.03/W), plus a
reasonable operating profit margin.

Note: Standard crystalline silicon modules (13.5% efficiency in Q4 2009 to 15.0% in Q4 2013). System sizes: residential: 5 kW in Q4
2009 through Q4 2013; commercial: 202 kW in Q4 2009 to 223 kW in Q4 2012 (200 kW in Q4 2013); utility-scale: 175 MW in Q4 2009
to 185 MW to Q4 2013). Modeled system sizes in the residential and commercial rooftop sectors were chosen based on typical system
sizes, then adjusted for optimal inverter configuration. System sizing for utility-scale benchmarks were chosen for comparison
purposes against pricing reported from DOEs Energy Information Administration (2010).
Source: SolarCity. (2014). Cost Calculation Methodology. Accessed September 2, 2014: http://investors.solarcity.com/events.cfm.

17
energy.gov/sunshot

Contents

Introduction and Summary

Historical and Recent Reported Prices
Recent Prices from Bottom-up Cost Analysis
Comparison Between Reported and Bottom-up Price Estimates
Near Future Price Trends
Conclusion

18
energy.gov/sunshot

2013 Reported Median (Residential/Commercial) and

Capacity-weighted Average (Utility-scale) Prices vs. Q4 2012
Bottom-up Benchmark (Quoted) Modeled Prices
$7

System Price (2013 $/WDC)

$6
$5
$4
$3
$2

$4.94

$4.69

$3.74

$3.47

$4.26

$3.89

$2.65

$2.65

$1

$3.00

$1.95

$0
Median
reported
price - U.S.

Median
reported
price - TX

Median
reported
price - CA

Residential

Modeled
Price - U.S.

Median
reported
price - U.S.

Median
reported
price - CO

Median
reported
price - CA

Modeled Cap. w. avg. Modeled

Price - U.S. reported Price - U.S.
price - U.S.

Commercial

Note: Many factors contribute to the reported price and overnight capital cost differing values including the
additional costs above and beyond the overnight capital cost of a project, such as third-party financing;
different system sizing; installation time lag; and various methods for calculating system sales price. Error
bars for reported price data represent 20/80 percentile of datasets. The costs included in the bottom-up
benchmarks represent national averages; there is significant cost variation for each component, depending
on the installer, market, or time frame. The above data is representative of the following system sizing:
median residential reported size= 5.6 kW; residential bottom-up benchmark overnight capital cost = 5 kW;
median commercial reported size (> 100 kW) = 266 kW; commercial bottom-up benchmark overnight
capital cost = 223 kW; cap.-weighted average ground-mounted system (5 MW) reported size= 149 MW;
utility-scale bottom-up benchmark overnight cap. cost = 185 MW.

Utility-Scale GrountMounted

19
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Reasons for Deviations Between Reported and

Modeled Installed Prices

Median reported U.S. distributed system pricing is weighted heavily towards California
CA is generally a high-cost state with relatively high retail rates that may allow for
higher installer margins
Bottom-up benchmark overnight capital cost are more in line with states with
lower reported median prices (e.g., TX)
2013 median reported TX residential system price = $3.47/W
Q4 2012 modeled price for residential systems = $3.74/W
Utility-scale projects duration between signature of electricity sales agreement and
placed in service date can be significant
Reported pricing generally reflects module and other component pricing at the
time that electricity sales agreements (PPAs) were signed
Time lags of up to 4 years exist between date of PPA signature and commercial
operation for utility-scale projects installed in 2013
Bottom-up overnight capital costs represent pricing at the time of benchmark.

20
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Reasons for Deviations Between Reported and

Modeled Installed Prices (cont.)

Large variety in projects currently built in the United States

Lack of standards and transparency in incentive program reporting
Large differences across system configurations for geographic, market, and LCOE
purposes
Bottom-up, modeled system prices represents a specific prototypical project
Price and cost represent different things
Reported pricing reflects what customers did pay for systems (i.e., what the market
will bear). A customers purchase price may be significantly higher than it would be
elsewhere, regardless of the underlying cost to the installer, due to:
Higher electricity rates (e.g., CA)
Higher incentive levels (which may lower a customers upfront cash outlay,
though not the price paid to the installer)
Lower levels of competition, consumer awareness, etc.
The bottom-up benchmarks are reflective of consistent, transparent cost
assumptions and representative margins of each subcomponent to an installer,
regardless of market conditions or incentives.
21
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Bottom-up Modeled Overnight Capital Cost of Utilityscale PV Systems by Size

System Price (2013 $/WDC)

$3.5
$3.0

Q4 2011
Q4 2012
Q4 2013

$3.16
$2.80

$2.59

$2.5

$2.65
$2.25

$2.03

$2.0

$1.94

$2.45
$2.11
$1.88

$1.92

$1.80

$1.5
$1.0
$0.5
$0.0
5 MW

10 MW
20 MW
System Size Range (MWDC)

185 MW

Economies of scale for utility-scale projects are illustrated in modeled system

prices
Depending on the year, prices decline by 14-27% from 5 MW to 185 MW
Most of the price reduction (~70%) accompanies increasing size from 5 MW to 20
MW, with diminishing returns to scale beyond 20 MW.

Note: Standard crystalline silicon modules (14.9% efficiency in Q4 2011 and 15.0% in Q4 2012/3).

energy.gov/sunshot

22

Variation in Reported Price of 2012-13 Utilityscale PV Projects by Size and Configuration

Installed Price (2013$/WDC)

$6

Utility-Scale PV Installed in 2012 and 2013

$5
$4

Crystalline, Fixed-Tilt
Thin-Film, Fixed-Tilt
CPV

Crystalline, Tracking
Thin-Film, Tracking

$3
$2
$1
$0

50

100

150
200
System Size (MWDC)

250

300

Reported pricing for larger systems resides within narrower range than smaller systems, but
economies of scale are obscured within this data to some extent by other countervailing drivers:
Technology and location-specific issues (e.g., the 320 MWDC California Valley Solar Ranch
project uses premium efficiency modules)
Larger systems often have longer time lag between PPA execution and project completion
and thus may portray an earlier pricing environment (e.g., 2-4 years earlier for some of the
largest utility-scale systems).
23
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Installed Prices for Residential PV: United States vs. Germany

Installed Price, Excluding

Sales Tax/VAT (2013$/WDC)

$5
$4
$3
$2
$1
$0

$4.40

$3.52

$3.29

$2.05

U.S. Reported Price

(Installed in 2013)

U.S. Modeled Price

(Quoted Q4 2012)

U.S. Modeled Price

(Quoted Q4 2013)

Germany Reported Price

(Quoted in 2013)

Note: The German data are based on price quotes for roughly 2,300 individual PV systems obtained by EuPD through its quarterly survey of
German installers and provided to LBNL.

Installed prices in the United States are high compared to many other major
international PV markets; the disparity is particularly stark in comparison to Germany
Hardware costs are fairly similar across countries; thus the gap in total installed prices
must reflect differences in soft costs (including installer margins)
Suggestive of a potential for near-term installed price reductions in the United States.
24
energy.gov/sunshot

Contents

Introduction and Summary

Historical and Recent Reported Prices
Recent Prices from Bottom-up Cost Analysis
Comparison Between Reported and Bottom-up Price Estimates
Near Future Price Trends
Conclusion

25
energy.gov/sunshot

Median and Range of Analyst Expectations of

Global Module Average Selling Price
$1.6
$1.4

Historic Projection

$1.34

2013 $/Watt

$1.2
$1.0

$0.77

$0.8

$0.67

$0.64

$0.60

$0.59

2013

2014P

2015P

2016P

$0.6
$0.4
$0.2
$0.0
2011

2012

Global module prices in 2013 remain at historically low levels

Mixed forecasts on future module ASP
However, not expected to increase or decrease dramatically in price
By 2016 global ASP projected to be between $0.55/W - $0.65/W
Major system price reductions are not expected to come from PV module price
alone, as was the case in previous years
Due to current and pending U.S. tariffs on Chinese and Taiwanese solar products,
ASP in U.S. may be considerably higher than global average.
Sources: Lines represent the median, max., and min of ASP for First Solar, Trina Solar, Yingli , and global-weighted average from
the following analysts: Bloomberg New Energy Finance, "PV Market Outlook Q2 2014" (05/15/14); Cowen (05/07/14,
05/21/14); Deutsche Bank (11/28/12, 05/07/14, 05/21/14, 06/18/14); Goldman Sachs (05/21/14); GTM Research, "GTM
Research Global PV Price Outlook Q2 2014 (April 2014); Stifel Nicolaus (02/26/14); UBS (05/07/14). Note: historic pricing in
this slide uses a different dataset than what is used in other sections of this report.

26
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Analyst Estimates (2012-13) and Projections

(20142016) of Global Average System Price
Distributed Systems
Historic

$5

Projection
Range of Analyst
Projections

$4
$3
$2
$1
$0
2012

2013

2014P

2015P

2016P

System Price (2013 $/WDC)

System Price (2013 $/WDC)

$5

Utility-Scale Systems
Historic

Projection
Range of Analyst
Projections

$4
$3
$2
$1
$0
2012

2013

2014P

2015P

2016P

Analysts expect the system prices of both utility-scale and distributed systems to
continue to fall in the near future
Distributed systems are expected to reach between $1.50/W - $3.00/W by 2016
Utility-scale systems are expected to reach between $1.30 - $1.95/W by 2016.

Note: P = projection. Data represent the max. and min. figures from: Bloomberg New Energy Finance (05/15/14);
Cowen & Company (04/24/14); Deutsche Bank (04/23/14, 05/06/14, 05/08/14); Stifel Nicolaus (03/20/14). Inflation
adjusted 2013-14: EIA, AEO, Table 20, Gross Domestic Product, August 2012.

27
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Range of Analyst Expectations of Long-term

System Price
$5.0

Utility-scale PV

$4.0

Range of Analyst
Projections

$3.0

PV Installed Cost (2010 $/W)

$2.0
$1.0
$0.0
2015P
$5.0

2020P

2025P

2030P

2035P

2040P

Commercial-scale PV

$4.0

$3.0
$2.0
$1.0
$0.0
2015P
$5.0

2020P

2025P

2030P

2035P

2040P

Analysts expect pricing in all PV markets to

continue to decrease in the long-term
Low-end of analyst projections get very
close to SunShot target by 2020-2030
High-end still approximately $1.00$1.50/W above targets, though these
estimates align with some of todays
modeled prices
Current analyst projections are far lower
than projections made in recent past
2020 price projections are
approximately of what same
analysts projected 5-10 years ago.

Residential-scale PV

$4.0

Sources: Greenpeace/EREC, Energy Revolution, May 2014 (utility-scale only);

International Energy Agency, World Energy Outlook 2013, November 2013 (
New Policy & 450 Scenarios for utility-scale & commercial-scale); Bloomberg
New Energy Finance, Q2 2014, PV Market Outlook (05/15/14); U.S. Energy
Information Administration, Annual Energy Outlook 2014 ER (December 2013).
In years where projection was not made, most recent projection used.

$3.0
$2.0
$1.0

28

$0.0
2015P

2020P

2025P

2030P

2035P

2040P

energy.gov/sunshot

Contents

Introduction and Summary

Historical and Recent Reported Prices
Recent Prices from Bottom-up Cost Analysis
Comparison Between Reported and Bottom-up Price Estimates
Near Future Price Trends
Conclusion

29
energy.gov/sunshot

Conclusion

Continued system price reductions in 2013; more expected in the near-term, despite U.S. tariffs on
foreign PV modules
Reported distributed system pricing fell 12-15% from 2012-2013
Modeled system prices fell 4-12% from Q4 2012 to Q4 2013.
Despite downward trend, large variation in reported pricing within market segment in 2013
A difference of roughly $2.00/W in median reported price between the lowest- and highestpriced states for residential & commercial systems 10 kW, and similar variability also exists
within individual states
The reported price of utility-scale projects generally ranged from $2.60/W to $3.20/W,
though some of those systems may have been contracted in 2010-2012 (or earlier)
Difference between reported and modeled system prices for similarly segmented systems in 2013
Residential ($4.69/W reported price, $3.71/W modeled price); commercial ($3.89/W
reported price, $2.61/W modeled price); utility-scale ($3.00/W reported price, $1.92/W
modeled price)
Delta between reported and modeled pricing is due to various factors, such as market
fundamentals (e.g., large fraction of data for reported prices is from CA and other high-priced
markets), inefficient pricing (i.e., value-based pricing), project characteristics(e.g., highefficiency panels with single-axis tracking), and long temporal lags between contract signing
and installation for large utility-scale projects.

30
energy.gov/sunshot

For Further Reading, Please see the

Following Reports:

Barbose, G.; Darghouth, N.; Weaver, S.; Wiser, R. (2014). Tracking the Sun VII: An Historical Summary of
the Installed Price of Photovoltaics in the United States from 1998 to 2013. Berkeley, CA: Lawrence
Berkeley National Laboratory.
Bolinger, M.; Weaver, S. (2014). Utility-Scale Solar 2013: An Empirical Analysis of Project Cost,
Performance, and Pricing Trends in the United States. Berkeley, CA: Lawrence Berkeley National
Laboratory.
Davidson, C.; James, T.; Margolis, R.; Feldman, D.; Fu, R. (forthcoming). U.S. Residential Photovoltaic (PV)
System Prices, Q4 2013 Benchmarks: Cash Purchase, Fair Market Value, and Prepaid Lease Transaction
Prices.
Feldman D.; Barbose, G.; Margolis, R.; Darghouth, N.; James, T.; Weaver, S.; Goodrich, A.; Wiser. R. (2013).
Photovoltaic System Pricing Trends: Historical, Recent, and Near-Term Projections. 2013 Edition. NREL/PR6A20-60207. Golden, CO: NREL.
Feldman, D.; Barbose, G.; Margolis, R.; Wiser. R.; Darghouth, N.; Goodrich, A. (2012). Photovoltaic System
Pricing Trends: Historical, Recent, and Near-Term Projections. Golden, CO: NREL.
Feldman, D.; Friedman, B.; Margolis, R. (2013). Financing, Overhead, and Profit: An In-Depth Discussion
of Costs Associated with Third-Party Financing of Residential and Commercial Photovoltaic Systems.
NREL/TP-6A20-60401. Golden, CO: NREL.
Goodrich, A.; James, T.; Woodhouse, M. (2012). Residential, Commercial, and Utility-Scale Photovoltaic
(PV) System Prices in the United States: Current Drivers and Cost-Reduction Opportunities. NREL/TP-6A2053347. Golden, CO: NREL. Accessed July 2014: http://www.nrel.gov/docs/fy12osti/53347.pdf.
U.S. Department of Energy (DOE). (2012). SunShot Vision Study. DOE/GO-102012-3037. Washington,
D.C.: DOE. Accessed 2013: http://www1.eere.energy.gov/solar/pdfs/47927.pdf.

31

energy.gov/sunshot

Thank You
To download this briefing, please go to the following link:
http://www.nrel.gov/docs/fy14osti/62558.pdf

David Feldman

Senior Financial Analyst

National Renewable Energy Laboratory
202-488-2231
david.feldman@nrel.gov

Galen Barbose

Electricity Markets and Policy Group

Lawrence Berkeley National Laboratory
510-984-3453
glbarbose@lbl.gov

energy.gov/sunshot