I just finished watching to the webinar from the Lawrence Berkeley National Labs, “Tracking the Sun VI: An Historical Summary of the Installed Price of Photovoltaics in the United States from 1998 to 2012.” The data definitely backs the trends we are seeing locally in Southwest Florida. Here are some observations:
- Prices have continued a downward trend over the last decade, but have leveled off in 2013. With photovoltaic (PV) prices starting to tick back up, installed system prices are likely to increase in the near-term (installed price changes tend to lag PV module wholesale price changes). This is exactly what we are seeing and what I expected – we have seen the bottom of installed prices for at least the foreseeable future, and price stabilization or even increases are on the horizon.
- There is a not much of a price benefit as systems get larger. The discount for a larger system is not significant. You can expect to pay a similar price per watt for a 4kW through a 10kW system and larger. This is echoed by what we are seeing in our cost of doing business. There are few economies of scale when installing larger systems. Fixed costs are low. Costs are mostly variable with system size. In fact, larger systems can result in higher costs per watt as switch gear gets more expensive, engineering costs increase, and job complexity increases. In addition, both local utility companies currently charge one-time interconnection fees for systems over 11,765 watts (DC-STC Rating). There is no interconnection fee for systems smaller than this.
- Florida has some of the lowest installed prices for solar electric systems in the country. In fact, prices tend to be around 15% lower than the national average for systems under 10kW. Southwest Florida has even lower prices than the state as a whole, at about 25% lower than the national average. As the report states, U.S. intra-state price variability exists, and it is often wider than cross-state difference.
- Third-party owned (leased, financed) solar electric systems dominate in some states, especially the states with high numbers of installations. Florida tends to be a “cash sale” state, and prices are much lower. Presumably this is because there is no third party financial institution involved in most transactions. However, it reduces the number of installations because fewer can afford the up-front cost of solar electric systems. The end result is lower installed capacity, but more value for the end consumer (better investment returns).
As I listened to the hour-long presentation I felt substantiated in my assessment of the market, and I’m further convinced that we are providing some of the best solar energy values in the nation here in Southwest Florida. While we still can’t meet the rock bottom prices found in mature solar markets like Germany and Italy due to “soft costs,” the value proposition is still excellent here because of the ample sunlight we receive.
If you are interested in the full report, it can be found at the link below.