Photovoltaic System

Pricing Trends

Historical, Recent, and Near-Term

Projections
2015 Edition

David Feldman1, Galen Barbose2, Robert Margolis1,

Mark Bolinger2, Donald Chung1, Ran Fu1, Joachim
energy.gov/sunshot August 25, 2015 Seel2, Carolyn Davidson1, Nam Darghouth2, and
NREL/PR-6A20-64898 Ryan Wiser2
National
1 Renewable Energy Laboratory
energy.gov/sunshot
2Lawrence Berkeley National Laboratory
 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.

energy.gov/sunshot
 Introduction
There is a need for reliable and comprehensive information on PV system pricing.
Significant differences exist between various estimates of the cost and price of
solar in the market; this briefing is designed to help clarify how to interpret
these variances
Rapid market growth and rapid changes to PV system pricing in recent years
has created a need to clearly distinguish between historical, current, and
projected pricing
Policy support for PV deployment is premised on stimulating cost reductions
through market scale and development
The DOE SunShot Initiative seeks to reduce PV system prices by 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 and Utility-Scale Solar report series (reported
system prices)
NRELs bottom-up PV cost modeling (modeled system prices)
NRELs synthesis of PV market data and projections.
3

energy.gov/sunshot
 Executive Summary
Reported pricing for PV system installations completed in 2014 based in part on data reported to PV incentive programs:
Residential was $4.27 /W (median 6 kW)
Non-residential (>500 kW) was $2.76/W (median 1.1 MW); Non-residential (500 kW) was $3.90/W (median 30 kW)
Utility-scale (5 MW, ground-mounted) was $2.08/W (median (fixed-tilt) 14 MW).
Modeled solar PV system prices, using industry validated tools, quoted in Q4 2013 (and expected to be installed in 2014):
Residential (5 kW) was $3.33/W
Commercial (223 kW) was $2.68/W
Utility-scale (185 MW) was $1.83/W.
The delta between reported and modeled pricing is due to various factors pertaining to the inherent variability in the type
of systems that are installed each year, their location, state and federal policies, and the ability of buyers and sellers to
agree to a sales price (which may be effected by supply/demand market factors). Because the U.S. solar market is both
heterogeneous and dynamic, these factors change location by location and year by year, which can influence the overall
trends within the marketplace.
Reported system prices of residential and commercial PV systems declined 6%12% per year, on average, from 19982014,
and by 9%21% from 20132014, depending on system size.
Market analysts expect system prices to continue to fall, but for module prices to stabilize in the near-term.
Modeled system prices quoted in Q1 2015 (and expected to be installed in 2015):
Residential (5 kW) was $3.12/W, a reduction of 7% from Q4 2013
This is consistent with the large residential installers pricing, such as SolarCitys ($2.95/W) and Vivints
($3.21/W) reported Q1 2015 costs, plus a reasonable operating profit margin
Commercial (200 kW) was $2.17/W, a reduction of 19% from Q4 2013 4
Utility-scale (185 MW) was $1.78/W, a reduction of 2% from Q4 2013.
energy.gov/sunshot
Note: All PV installed price data are reported in terms of real 2014 dollars per Watt-DC.
 Reported, Bottom-up, and Analyst-Projected
Average U.S. PV System Prices over Time
Analyst Expectations, Distributed PV
$12
Analyst Expectations, Utility-Scale
Reported System Price, Residential
$10 Reported System Price, Commercial (>500 kW)
Reported System Price, Utility
Modeled System Price, Residential
$8 Modeled System Price, Commercial
2014$/WDC

Modeled System Price, Utility

$6

$4

$2

Global Module Price Index Analyst Expectations of Module Price

$0
2007 2008 2009 2010 2011 2012 2013 2014 2015P 2016P 2017P 2018P

Installation Year
All methodologies show a downward trend in PV system pricing
Reported pricing and modeled benchmarks historically had similar results; however, they have
recently diverged in estimated pricing.
Note: The reported system price for the residential market is the median price of residential systems, with a median project size of
6.1 kW in 2014. 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 500 kW, with a median project size of 1.1 MW in 2014.
The modeled commercial system price represents a ~200 kW rooftop system. The reported system price for the utility-scale
market is the median reported price for ground-mounted systems greater than or equal to 5 MW in size, with a median project
size of 23 MW in 2014. The modeled system price of utility-scale systems represents a ~100 MW fixed-tilt ground-mounted 5
system. Modeled system prices for all sectors are representative of bids issued in the fourth quarter of the previous year. Sources
of analyst expectations located on slide 30. The Global Module Price Index is the average module selling price for the first buyer (P energy.gov/sunshot
Mints SPV Market Research).
 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.

energy.gov/sunshot
 Data Sources and Methodology:
Residential and Non-Residential PV
Data and analysis excerpted from LBNLs Tracking the Sun VIII report
Residential and non-residential PV defined to consist of projects <5 MW and/or
roof-mounted, regardless of whether connected to customer-side of meter
Median prices derived from project-level data reported for systems installed
through year-end 2014 (and from a more limited set of states for H1 2015)
Data are self-reported by installers and likely subject to some inconsistency
in reporting practices
Project-level data obtained from ~50 program administrators, spanning 42
states, and including more than 400,000 systems
Preliminary sample represents 81% of all U.S. residential and commercial PV
capacity installed through 2014 and 62% of capacity installed in 2014
Projects for which reported prices represent appraised values, rather than prices
paid to the installer/EPC, were removed from the final data sample
Final Data Sample: Roughly 320,000 systems installed from 1998-2014, totaling
6,000 MW installed capacity. 7

energy.gov/sunshot
Median Reported Installed Prices of Residential
and Non-Residential PV Systems over Time
Median Reported Installed Price
$12 Residential
$10 Non-Residential 500 kW
Non-Residential >500 kW
2014$/WDC

$8

$6

$4
Module Price Index
$2

$0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
n(Residential) 31 180 214 1,312 2,516 3,407 5,457 5,392 8,607 12,370 12,708 23,450 34,683 38,714 46,964 51,507 45,368
n(Non-Res500) 2 8 6 19 79 174 314 474 618 797 1,503 1,853 3,411 4,811 5,872 4,067 2,634
n(Non-Res>500) 0 0 0 0 3 6 7 11 22 34 91 92 150 400 396 350 213

Installation Year
Note: Median installed prices are shown only if 20 or more observations are available for the customer segment. The Module Price Index is the U.S. module price
index published by SPV Market Research.

Since 1998, reported PV system prices have fallen by roughly $0.50/W per year on average
From 2013 to 2014, reported prices fell by $0.42/W (9%) for residential systems and by
$0.75/W (21%) for large non-residential systems >500 kW
By comparison, U.S. annual average module prices fell by $0.04/W from 2013-2014.
8

energy.gov/sunshot
Preliminary Price Trends for Systems Installed
in H1 2015 from a Subset of State Markets
$5
Median Reported Installed Price
$4
(AZ, CA, CT, MA, NJ, NY)
2014$/WDC

$3

$2

$1
Residential Non-Residential 500 kW Non-Residential >500 kW
$0
2014 (H1) 2014 (H2) 2015 (H1) 2014 (H1) 2014 (H2) 2015 (H1) 2014 (H1) 2014 (H2) 2015 (H1)
n=15,529 n=13,688 n=14,368 n=1,038 n=865 n=704 n=77 n=78 n=71

Installation Period
Note: The 2014 and H1 2015 values in this figure are based on data from a smaller set of states than elsewhere in this section, and thus the 2015 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 2015
Median reported prices fell by roughly $0.18-0.33/W (6-13%) in H1 2015, relative to
2014, across the customer segments shown.

energy.gov/sunshot
 Variation in Reported Price by System Size:
Residential PV Systems in 2014
$8
ResidentialSystems Installed in 2014
(Median Installed Price and 20th/80th Percentiles)
$6
2014$/WDC

$4

$2

$4.33 $4.72 $4.49 $4.21 $3.99 $3.96 $3.94 $3.92 $3.93 $3.93 $4.00
$0
2 kW 2-4 kW 4-6 kW 6-8 kW 8-10 kW 10-12 kW 12-14 kW 14-16 kW 16-18 kW 18-20 kW >20 kW
n=1,784 n=7,389 n=12,826 n=10,339 n=6,842 n=3,151 n=1,438 n=687 n=350 n=207 n=355
System Size Range (kWDC)

Economies of scale for residential systems most apparent within the range of 2 to 10 kW,
where the vast majority of residential systems reside, with reported installed prices 15%
lower for systems 8-10 kW in size compared to 2-4 kW systems
Low prices for systems 2 kW are associated with the high concentration of systems
installed in new construction.

10

energy.gov/sunshot
 Variation in Reported Price by System Size:
Non-Residential PV Systems in 2014
$8
Non-Residential Systems Installed in 2014
(Median Installed Price and 20th/80th Percentiles)
$6
2014$/WDC

$4

$2

$4.20 $3.82 $3.80 $3.73 $3.60 $3.44 $2.93 $2.69

$0
10 kW 10-20 kW 20-50 kW 50-100 kW 100-250 kW 250-500 kW 500-1000 kW >1000 kW
n=701 n=335 n=616 n=372 n=421 n=189 n=92 n=121

System Size Range (kWDC)

Economies of scale for non-residential systems are gradual, but significant across the
broad range of system sizes, with prices 36% lower for the largest class of non-residential
systems >1,000 kW in size compared to the smallest non-residential systems 10 kW
As with residential systems, substantial variability in reported prices exists within each
system size range, reflecting different regional drivers of pricing, which may include
market and policy dynamics, project/site-specifics, and installer specifics.
11

energy.gov/sunshot
 Variation in Reported Price by State:
Residential PV Systems in 2014
$8
Residential Systems Installed in 2014
Median Installed Price and 20th/80th Percentiles
$6
2014$/WDC

U.S.
$4

$2

$3.36 $3.38 $3.50 $3.56 $3.59 $3.59 $3.71 $3.88 $3.90 $3.92 $3.93 $4.10 $4.17 $4.24 $4.27 $4.38 $4.40 $4.44 $4.60 $4.72 $4.77
$0
DE TX FL NH AZ NV CO CT UT MD NJ WI OR RI NM IL MA VT CA NC NY
249 853 39 450 5525 578 870 1467 159 535 3706 245 765 59 769 140 4551 902 16432 168 6890

State andSample Size

Note: Numbers below each state indicate the number of observations; installed price data are shown only if 20 or more observations are available for a given state.

The median reported price differs by ~$1.40/W between the lowest- and highest-priced
states, though similar variability also exists within most individual states
Reported prices in several large state markets (CA, MA, NY) pull the U.S. 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.
12

energy.gov/sunshot
 Variation in Reported Price by State:
Non-Residential PV Systems in 2014
$8
Non-Residential Systems Installed in 2014
Median Installed Price and 20th/80th Percentiles
$6
2014$/WDC

U.S.
$4

$2

$2.92 $2.94 $3.05 $3.21 $3.39 $3.48 $3.62 $3.63 $3.65 $3.96 $4.00 $4.06 $4.07 $2.61 $2.67 $2.78 $3.08
$0
TX NV CT MD NH NJ OR AZ RI NY UT MA CA MA NC NJ CA
76 90 24 24 23 198 48 138 25 493 71 549 770 47 37 40 59
Non-Residential 500 kW Non-Residential >500 kW

State and Sample Size

Note: Numbers below each state indicate the number of observations; installed price data are shown only if 20 or more observations are available for a given state.

Median reported prices also vary widely across states for small non-residential systems
(i.e., a difference of $1.15/W between the lowest- and highest-priced states)
For large non-residential systems, few states have a sufficient number of systems to
justify comparison, though even among this limited set installed prices can differ
Cross-state variation for non-residential systems reflects the same kinds of factors cited
on prior slide for residential (e.g., preponderance of large ground-mounted systems in
NC, non-profit and public agency projects in CA, etc.). 13

energy.gov/sunshot
 Data Sources and Methodology:
Utility-Scale Solar
Data and analysis excerpted from LBNLs Utility-Scale Solar 2014 report
Utility-scale 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)
Data sourced from FERC Form 1, Section 1603 Grant Program, SEC filings,
company presentations, trade press, interviews with developers and owners
Project sample consists of 170 fully operational projects installed through year-
end 2014, totaling roughly 7,490 MWDC, 5,874MWAC (87% 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 2014 may reflect
PPAs or EPC contracts signed in 2010-2013)
Data reliability is mixed, depending on data sources available for any
individual project, with possible inconsistencies in the scope of cost
components captured. 14

energy.gov/sunshot
 Reported Price of Utility-Scale PV Projects
over Time
$10
Fixed-Tilt c-Si Tracking c-Si
Fixed-Tilt Thin-Film Tracking Thin-Film
Installed Price (2014$/W-AC)

$8 Median Fixed c-Si Median Tracking c-Si

Median Fixed Thin-Film Median Tracking Thin-Film
CPV Median ALL
$6
3.10
3.21

$4

$2
2.76 3.32

$0
2007-2009 2010 2011 2012 2013 2014
n=4 (68 MW-AC) n=8 (127 MW-AC) n=29 (428 MW-AC) n=38 (875 MW-AC) n=33 (1269 MW-AC) n=54 (2822 MW-AC)
Installation Year
Median prices have continuously declined, decreasing form $3.51/WDC in 2011 to $2.34/WDC in 2014. We
see little movement in capacity-weighted average prices since 2012 as large projects pull up the mean
Median prices were $2.08/WDC ($2.76/WAC) for crystalline, fixed-tilt; $2.44/WDC ($3.10/WAC) for crystalline
with tracking; $2.53/WDC ($3.32/WAC) for thin-film, fixed-tilt; and $2.34/WDC ($3.21/WAC) for thin-film with
tracking systems completed in 2014
The majority of 2014 systems fall within a range of roughly $1.78/WDC ($2.32/WAC)to $2.83/WDC
($3.52/WAC).
15
Note: Installed price in this graphic uses the unit $/WattAC, unlike the majority of this report which uses
$/WattDC. Utility-scale power plants are often referred to based on their AC ratings, particularly by utility energy.gov/sunshot
companies.
 Variation in Reported Price of 2014 Utility-
Scale PV Projects by Size and Configuration
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00
$7 Fixed-Tilt c-Si Tracking c-Si
Fixed-Tilt Thin-Film Tracking Thin-Film
Capacity Weighted Fixed c-Si Capacity Weighted Mean Tracking c-Si
$6
Installed Price (2014 $/WAC)

Capacity Weighted Mean Fixed Thin-Film Capacity Weighted Mean Tracking Thin-Film
Capacity Weighted Mean ALL
$5
3.95
$4 2.92
2.94
3.74 3.75
$3 3.31
3.32
2.87 2.60
$2
2.82 2.05 2.62
$1

Figure only includes PV projects that went fully online in 2014

$0
5-10 MW 10-20 MW 20-100 MW 100-1000 MW
n=18 (141 MW-AC) n=23 (401 MW-AC) n=6 (251 MW-AC) n=7 (2029 MW-AC)
System Size (MWAC)
For systems coming online in 2014, no clear economies of scales are apparent due to:
Technology and location-specific issues
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 for example the 348 MWAC Agua Caliente Project).
16
Note: Installed price in this graphic uses the unit $/WattAC, unlike the majority of this report which uses
$/WattDC. Utility-scale power plants are often referred to based on their AC ratings, particularly by utility energy.gov/sunshot
companies.
 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.

17

energy.gov/sunshot
 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 Chung et al. 2015)
This approach allows for greater specificity and benefits from
manufacturer and installer feedback on results
Modeled prices represent installer bid or quoted prices for the time periods
noted
Modeled system sizes are specified for each market segment, and are
described below the figures. 18

energy.gov/sunshot
 Bottom-up Modeled System Price of PV
Systems by Sector, Q4 09 Q1 15
$8
$6.97 BOS
$7
$6.13 Inverter
$6 $5.16 Module
$4.80
2014$/WattDC

$5 $4.33 $4.40
$3.79 $3.78
$4 $3.33 $3.12 $3.30
$2.68 $2.68 $2.57
$3 $2.17 $1.97 $1.83 $1.78
$2
$1
$0
Q4 Q4 Q4 Q4 Q4 Q1 Q4 Q4 Q4 Q4 Q4 Q1 Q4 Q4 Q4 Q4 Q4 Q1
2009 2010 2011 2012 2013 2015 2009 2010 2011 2012 2013 2015 2009 2010 2011 2012 2013 2015
Residential Commercial Utility ground mount (Fixed axis)
Since Q4 2009, modeled system prices fell between 15% 17% per year
45% - 65% of reduction attributed to module price reductions
From Q4 13 to Q1 15, modeled system prices fell between $0.05/W - $0.42/W, or 3-16%
Q1 2015 bottom-up modeled residential system price of $3.10/W is consistent with leading residential
installers pricing, such as SolarCitys ($2.95/W) and Vivints ($3.21/W) reported Q1 2015 costs, plus a
reasonable operating profit margin.
Note: Standard crystalline silicon modules (13.5% efficiency in Q4 2009 to 16.0% in Q1 2015). 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 Q1 2015); utility-scale: 100 MW in Q1 2015 to 185
MW to Q4 2013). Modeled system sizes in the residential and commercial rooftop sectors were chosen based on typical system sizes,
19
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).
Sources of installers costs: 1) SolarCity. (2015). Cost Calculation Methodology. Accessed June 25, 2015:
energy.gov/sunshot
http://investors.solarcity.com/events.cfm. 2) Vivint. (2015). Estimated Cost per Watt Methodology. May 12, 2015.
 Bottom-up Modeled Overnight Capital Cost of
Utility-Scale PV Systems by Size
$2.5
System Price (2014$/W)

$2.0

$1.5

$1.0

$0.5

$0.0
5 10 20 185 5 10 20 185 5 10 20 185 5 10 20 185
MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW
Fixed-Tilt, Non-Union Labor Fixed-Tilt, Union Labor One-axis Tracker, Non- One-axis Tracker, Union
Union Labor Labor

Economies of scale for utility-scale projects are illustrated in modeled system prices
Prices decline by 10-11% from 5 MW to 185 MW
About of the price reduction accompanies increasing size from 5 MW to 20 MW,
with diminishing returns to scale beyond 20 MW.
20

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.

21

energy.gov/sunshot
 2014 Reported Median Prices vs. Q4 2013 Bottom-up
Benchmark (Quoted) Modeled Prices
$6

$5
System Price (2014 $/WDC)

$4

$3

$2 $4.20 $3.90
$3.33
$2.80 $2.68 $2.41
$1 $2.08 $1.83 $1.98

$0
Median Modeled Price Median Median Modeled Price Median Modeled Price Median Modeled Price
reported price - U.S. reported price reported price - U.S. reported price - U.S. reported price - U.S.
- U.S. - U.S. - U.S. - U.S. - U.S.
(500kW) (>500kW)
Residential Commercial Utility-Scale (Fixed-Tilt) Utility-Scale (1-Axis)

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 data sets. 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 are representative of the following system sizing: median
residential reported size= 6.1 kW; residential bottom-up benchmark overnight capital cost = 5 kW; median
commercial reported size (> 500 kW) = 1.1 MW; median commercial reported size ( 500 kW) = 29.2 kW; 22
commercial bottom-up benchmark overnight capital cost = 200 kW; median fixed-tilt ground-mounted system
(5 MW) reported size= 14 MW; median 1-Axis ground-mounted system (5 MW) reported size= 26 MW; energy.gov/sunshot
utility-scale bottom-up benchmark overnight cap. cost = 185 MW.
 2014 Utility-Scale Reported Median Prices vs. Q4 2013
Bottom-up Benchmark (Quoted) Modeled Prices ($/WAC)
$4.0

$3.5
System Price (2014 $/WAC)

$3.0

$2.5

$2.0

$1.5 $3.18
$2.76
$2.56 $2.37
$1.0

$0.5

$0.0
Median reported price - U.S. Modeled Price - U.S. Median reported price - U.S. Modeled Price - U.S.
Utility-Scale (Fixed-Tilt) Utility-Scale (1-Axis)
Note: Installed price in this graphic uses the unit $/WattAC, unlike the majority of this report which uses $/WattDC.
Utility-scale power plants are often referred to based on their AC ratings, particularly by utility companies. 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 data sets. 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 are 23
representative of the following system sizing ; median fixed-tilt ground-mounted system (5 MW) reported size= 11
MWAC; median 1-Axis ground-mounted system (5 MW) reported size= 20 MWAC; utility-scale bottom-up benchmark energy.gov/sunshot
overnight cap. cost = 185 MW.
 2014 Modeled and Reported System Price From Various
Sources
$5.0 $4.6
$4.2
System Price (2014 $/WDC)

$4.5
$3.8 $3.6 $3.9
$4.0 $3.4
$3.3 $3.3
$3.5 $3.0
$3.0 $2.6 $2.7 $2.8
$2.4 $2.4
$2.5 $2.0 $1.9 $2.0 $1.8 $1.8 $2.1
$2.0 $1.7
$1.5
$1.0
$0.5
$0.0

LBNL (500kW)

LBNL (1-Axis)
NREL

NREL
BNEF

BNEF

BNEF
GTM/SEIA

GTM/SEIA

GTM/SEIA

GTM/SEIA
LBNL

GTM/SEIA
Vivint Solar
SolarCity

LBNL (>500kW)

NREL (1-Axis)

NREL (Fixed)
GTM/SEIA (1-Axis)

GTM/SEIA (Fixed)

LBNL (Fixed)
Modeled Reported Modeled Reported Modeled Reported
Residential Non-residential Utility-scale

NREL and LBNL PV system pricing figures are consistent with other sources
Across various sources, reported system pricing is generally higher than modeled system pricing
Reported values by SolarCity and Vivint Solar are lower, but they report costnot price.

Sources: 1. GTM/SEIA. (2015). U.S. Solar Market Insight: 2014 Year-in-Review. 2. SolarCity. Cost 24
Calculation Methodology. Accessed June 25, 2015: http://investors.solarcity.com/events.cfm. 3. Vivint
Solar. (2015). Estimated Cost per Watt Methodology. 4. Bloomberg New Energy Finance. (2015). H1 2015 energy.gov/sunshot
North American PV Outlook.
 Reasons for Deviations Between Reported and
Modeled Installed Prices
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 reflect consistent, transparent cost assumptions and
representative margins of each subcomponent to an installer, regardless of market conditions
or incentives
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 2014
Bottom-up overnight capital costs represent pricing at the time of benchmark.

25

energy.gov/sunshot
+ Note: a customer may be the end-user of energy or a financial entity which owns a system.
 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
The median system size of utility-scale systems which reported prices in 2014 was 14 MW; the
bottom-up utility-scale system models a 185 MW system which has achieved full economies
of scale
Reported system pricing may include embedded cost components not included in bottom-up,
modeled system prices
Examples of additional items include: re-roofing costs, loan origination fees, union labor, and
additional interconnection costs
Large variety in how United States PV installation and development companies operate and report
data
Reported system pricing reflects the characteristics and reporting conventions of a diverse set
of installers and developers in the sample, many of which are relatively small or regional
Bottom-up, modeled system prices represent a set of specific models and practices.

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 Installed Prices for Residential PV: United States vs. Germany

$6
Installed Price, Excluding Sales

$5
Tax/VAT (2014$/WDC)

$4

$3

$2

$1
$2.13 $3.03 $4.17
$0
Germany Reported Price U.S. Modeled Price U.S. Reported Price
(Quoted in 2014) (Quoted Q1 2015) (Installed in 2014)
Note: The German data are based on price as reported in the International Energy Agencys National Survey Report of PV Applications in Germany: 2014.

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 (regardless of the price metric used)
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
However, because Germany operates under a different institutional and regulatory environment, the
United States may not be able to achieve price reductions in the same manner.
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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.

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 Median and Range of Analyst Expectations of
Global Module Average Selling Price
$1.6
$1.41 Historic Projection
$1.4
$1.2
2014 $/Watt

$1.0
$0.84
$0.8 $0.66 $0.63 $0.60
$0.6 $0.54 $0.49 $0.46
$0.4
$0.2
$0.0
2011 2012 2013 2014 2015P 2016P 2017P 2018P

Global module prices in 2014 remain at historically low levels

Continued module price reductions expected in near future, getting below $0.5/W
by 2017
Major system price reductions must come from other categories to hit SunShot
targets
Due to current and pending U.S. tariffs on Chinese and Taiwanese solar products,
ASP in the United States 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 29
the following analysts: Bloomberg New Energy Finance, "PV Market Outlook Q2 2015" (05/26/15); Cowen (05/21/15); Deutsche
Bank (02/25/15, 03/25/15, 05/21/15); Goldman Sachs (04/13/15); GTM Research, "GTM Research Global PV Price Outlook 2015 energy.gov/sunshot
(March 2015). Note: historic pricing in this slide uses a different data set than what is used in other sections of this report.
 Analyst Estimates (2013-14) and Projections
(20152020) of Average System Price
Residential Systems Utility-Scale Systems
$5 $5
Historic Projection Historic Projection UBS - Global
IHS - Global
$4 $4
System Price (2014 $/WDC)

System Price (2014 $/WDC)

BNEF - U.S. High
BNEF - U.S. Low
Deutsche Bank - First Solar
$3 $3
Deutsche Bank - SunEdison

$2 $2
IHS - Global
BNEF - U.S. High
$1 BNEF - U.S. Low $1
Deutsche Bank - SolarCity
Deutsche Bank - Vivint Solar
$0 $0
2013 2014 2015P 2016P 2017P 2018P 2019P 2020P 2013 2014 2015P 2016P 2017P 2018P 2019P 2020P

Analysts expect the system prices of both utility-scale and distributed systems to continue to fall in the near future
Residential systems are expected to reach $1.5/W - $3.0/W and utility-scale systems are expected to reach
$1.00/W - $1.75/W by 2020
Analysts project that from 2014-2020, system prices will fall 16%-33% for residential systems and 26%-36% for
utility-scale systems, or between 3%-12% per year.
Note: P = projection. Data represent the max. and min. figures from: Bloomberg New Energy Finance, H1 2015 North
American PV Outlook (01/16/15); Deutsche Bank (02/19/15, 02/25/15, 05/04/15, 05/13/15); IHS, Solar Market 30
Intelligence, (07/07/15); Navigant Consulting, Distributed Solar PV Market Drivers and Barriers, Technology Trends,
Competitive Landscape, and Global Market Forecasts, (Q3 2015); UBS (06/03/15). Inflation adjusted using: EIA, AEO, Table energy.gov/sunshot
20, Gross Domestic Product.
 Range of Analyst Expectations of Long-term
U.S. System Price
$5.0 Utility-scale PV AEO 2015

$4.0
BNEF - High BNEF and IEA expect pricing in all PV
BNEF - Low
IEA - High
markets to continue to decrease and to get
$3.0
IEA - Low very close to the SunShot targets between
2020-2030
PV Installed Cost (2010 $/W)

$2.0

$1.0 AEO has a much more conservative outlook

with respect to PV system pricing, with
$0.0
2015P 2020P 2025P 2030P 2035P
system pricing projected to remain
$5.0 relatively flat through 2035
Commercial-scale PV
$4.0 Analyst expectations of future pricing are
$3.0 currently far lower than projections made
$2.0
even just a few years ago, reflecting very
rapid change in the U.S. market.
$1.0

$0.0
2015P 2020P 2025P 2030P 2035P

$5.0 Sources: International Energy Agency, World Energy Outlook 2014,

$4.0
Residential-scale PV November 2014 (New Policy & 450 Scenarios for utility-scale &
commercial-scale); Bloomberg New Energy Finance, H1 2015 North
$3.0 American PV Outlook (01/16/15); U.S. Energy Information
Administration, Annual Energy Outlook 2015 (June 2015). In years where
$2.0 projection was not made, most recent projection used.
$1.0 31
$0.0
2015P 2020P 2025P 2030P 2035P
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.

32

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 Conclusion
Continued system price reductions in 2014; more expected in the near-term, despite U.S. tariffs on
foreign PV modules
Reported distributed system pricing fell 9-21% from 2013-2014
Modeled system prices fell 2-19% from Q4 2013 to Q1 2015
Despite downward trend, large variation in reported pricing within market segment in 2014
A difference of roughly $1.40/W in median reported price between the lowest- and highest-
priced states for residential, and similar variability also exists within individual states
The reported price of utility-scale projects generally ranged (20-80%) from $2.32/WAC
($1.78/WDC) to $3.52/WAC ($2.83/WDC), 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 2014
Residential ($4.20/W reported price, $3.33/W modeled price); commercial ($2.80/W
reported price (> 500kW), $2.68/W modeled price); utility-scale ($2.08/W reported price
(fixed-tilt), $1.83/W modeled price (fixed-tilt))
Delta between reported and modeled pricing is due to various factors, such as market
fundamentals (e.g., large variety in different business models and reporting methods for
installers and developers in U.S. PV industry), inefficient pricing (i.e., value-based pricing),
project characteristics(e.g., high-efficiency panels with single-axis tracking), and long temporal
lags between contract signing and installation for large utility-scale projects.
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 For Further Reading, Please see the
Following Reports:
Barbose, G.; Darghouth, N. (2015). Tracking the Sun VIII: An Historical Summary of the Installed Price of
Photovoltaics in the United States from 1998 to 2014. Berkeley, CA: LBNL.
Bolinger, M.; Seel, J. (2015). Utility-Scale Solar 2014: An Empirical Analysis of Project Cost, Performance, and
Pricing Trends in the United States. Berkeley, CA: Lawrence Berkeley National Laboratory.
Chung, D.; Davidson, C.; Fu, R.; Ardani, K. Margolis, R. (2015). U.S. Photovoltaic (PV) Prices and Cost Breakdowns:
Q1 2015 Benchmarks for Residential, Commercial, and Utility-Scale Systems. NREL/TP-6A2064746. Golden, CO:
NREL.
Feldman D.; Barbose, G.; Margolis, R.; Darghouth, N.; James, T.; Weaver, S.; Darghouth, N; Fu, R.; Davidson, C.;
Booth, S.; Wiser. R. (2014). Photovoltaic System Pricing Trends: Historical, Recent, and Near-Term Projections.
2014 Edition. NREL/PR-6A20-62558. Golden, CO: NREL.
Feldman, D.; Barbose, G.; Margolis, R.; Wiser. R.; Darghouth, N.; Goodrich, A. (2012). Photovoltaic System Pricing
Trends: Historical, Recent, and Near-Term Projections. Golden, CO: NREL.
Fu, R.; James, T.; Chung, C.; Gagne, D.; Lopez, A.; Dobos, A. Economic Competitiveness of U.S. Utility-Scale
Photovoltaics Systems in 2015: Regional Cost Modeling of Installed Cost ($/W) and LCOE ($/kWh). Forthcoming
paper. Accepted by IEEE PVSC, 2015.
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-6A20-53347.
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.
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 Thank You

To download this briefing, please go to the following link:

http://www.nrel.gov/docs/fy15osti/64898.pdf

David Feldman Galen Barbose

Senior Financial Analyst Electricity Markets and Policy Group
National Renewable Energy Laboratory Lawrence Berkeley National Laboratory
202-488-2231 510-984-3453
david.feldman@nrel.gov glbarbose@lbl.gov

energy.gov/sunshot