The U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) has released the latest edition of an annual solar photovoltaic (PV) cost tracking report, showing that the installed cost of PV power systems in the United States fell substantially in 2010 and the first half of 2011.

The average installed cost of residential and commercial PV systems completed in 2010 fell by roughly 17 percent from the year before, and by an additional 11 percent within the first six months of 2011.

These recent installed cost reductions are attributable, in part, to dramatic reductions in the price of PV modules.

The report indicates that non-module costs — such as installation labor, marketing, overhead, and inverters — also fell for residential and commercial PV systems in 2010. “The drop in non-module costs is especially important,” notes report co-author and Berkeley Lab scientist Ryan Wiser, “as those are the costs that can be most readily influenced by solar policies aimed at accelerating deployment and removing market barriers, as opposed to research and development programs that are also aimed at reducing module costs.”

According to the report, average non-module costs for residential and commercial systems declined by roughly 18 percent from 2009 to 2010.

Turning to utility-sector PV, costs varied over a wide range for systems installed in 2010, with the cost of systems greater than 5,000 kilowatts (kW) ranging from $2.90 per Watt (W) to $6.20/W, reflecting differences in project size and system configuration, as well as the unique characteristics of certain individual projects. Consistent with continued cost reductions, current benchmarks for the installed cost of prototypical, large utility-scale PV projects generally range from $3.80/W to $4.40/W.

Based on these data and on installed cost data from the sizable German and Japanese PV markets, the authors suggest that PV costs may be driven lower through large-scale deployment programs, but that other factors are also important in achieving cost reductions.

The report also shows that PV installed costs exhibit significant economies of scale. Among systems installed in 2010, those smaller than 2 kW averaged $9.80/W, while large commercial systems >1,000 kW averaged $5.20/W; partial-year data for 2011 suggests that average costs declined even further in 2011. Large utility-sector systems installed in 2010 registered even lower costs, with a number of systems in the $3.00/W to $4.00/W range.

Ref.: Galen Barbose, Naïm Darghouth, and Ryan Wiser, Tracking the Sun IV: An Historical Summary of the Installed Cost of Photovoltaics in the United States from 1998 to 2010, LBNL-5047E. September 2011