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Report: How Much Does a Solar PV System Cost in 2016?
Imagine you worked in a high-growth technology market where the pricing of the end product is almost always decreasing, and sometimes falls by 17 percent every six months. No imagination is required for this scenario if you work in the solar industry -- it's an everyday reality.-solar street light system
Where are these reductions coming from -- and how does a solar company survive in this environment?-mini solar panel for led light
A new report from GTM Research, takes a careful look at the solar system pricing stack across market segments and its impacts.-solar reading light
Across-the-board drops in pricing
We've covered the stark drops in PV module pricing as the industry confronts an oversupply issue. But recent steep reductions in system pricing stem not just from modules, but also from price reductions in inverters, trackers and even labor costs. It's only stubborn soft costs such as customer acquisition that have actually risen.-fiber optic solar light system
The report finds that module pricing will continue to fall and will impact systems pricing, particularly in the utility market, where modules account for a bigger slice of the bill of materials. Module pricing has fallen by a remarkable 33.8 percent since the first half of 2016.-off-grid home solar system
Here's a further litany of price drops:
- The price drops in the utility market are the greatest -- 17.4 percent for fixed-tilt and 14.9 percent for single-axis tracking
- On average, labor costs in each market segment have decreased by at least $0.01/Wdc from H1 to H2 2016
- Almost all of the pricing change in the commercial market came from modules (this speaks to the persistent challenge of soft costs in the commercial PV market)
- Residential solar prices have fallen 8.6 percent in the same period
It's only customer acquisition costs that grew -- by 10 percent in the second half of the year, according to the report.-solar panel system 3kw
"More dramatic than anything we've seen since 2011 or 2012"
We spoke with report author and GTM Research solar analyst Ben Gallagher.-solar panels energy system
Gallagher acknowledged that quarter-to-quarter and year-to-year price drops have been the norm in the solar industry for more than a decade (with the exception of "a few flukes" in the distant past).-solar panel system price
"However," he said, "in the past six months, these price drops have been more dramatic than anything we've seen since 2011 or 2012." He added, "It's not just the price drop for modules, but the entire balance-of-system hardware ecosystem that's seeing tremendous price pressure."-stand alone solar power systems
Gallagher suggested that given the "dramatic" downward price trend, "even renewable energy skeptics" would have to entertain solar's increasing cost-competitiveness and what he characterized as the "efficiency" of this market.-solar system for light
Facing a "negative growth" year in 2017, the GTM Research analyst said, "Solar hardware firms will need to not only compete on price, but they'll have to provide an additional value to the EPC -- to reduce installation time or help reduce soft costs." He added, "Not everyone will succeed at that, but the smarter firms will survive." -solar system charger
FIGURE: H1 & H2 2016 System Pricing by Market Segment ($/Wdc)
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