Utility-scale solar photovoltaic (PV) system costs dropped by 20 percent in the first quarter of 2016, according to a report by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL). Residential and commercial solar also dropped – by 6 and 4 percent, respectively.
According to NREL Senior Analyst and Project Lead, Ran Fu:
"The continuing total cost decline of solar PV systems demonstrates the sustained economic competitiveness of solar PV for the industry across all three sectors”
These new results also highlight the significant role of soft costs (i.e. non-hardware costs such as labor, overhead, permitting, financing) in the solar cost equation. According to this new report from NREL, soft costs represented:
- 58% of residential solar PV system costs
- 49% of commercial solar PV system costs
- 34% of utility-scale solar PV system costs
The figure below shows the price per Watt of installed solar capacity from the fourth quarter of 2009 through the first quarter of 2016. All told, the cost of solar has dropped by more than 50 percent across all sectors.