Tracking the Sun VIII The Installed Price of Residential and - - PowerPoint PPT Presentation

Tracking the Sun VIII

The Installed Price of Residential and Non-Residential Photovoltaic Systems in the United States

Galen Barbose and Naïm Darghouth

Lawrence Berkeley National Laboratory — Report Summary — August 2015

This analysis was funded by the Solar Energy Technologies Office, Office of Energy Efficiency and Renewable Energy of the U.S. Department of Energy under Contract No. DE-AC02-05CH11231.

trackingthesun.lbl.gov

Report Overview

• Focus on projects installed through 2014

with preliminary data for the first half of 2015

• Describe:
• Historical trends in national median prices
• Variability in pricing across projects
• Including:
• Key drivers for decline in median prices
• Summary and comparison to other PV

system price and cost benchmarks

• Comparison to international markets
• Installed price variation with system size and

design, location, installer, and sector

2 What’s New in Tracking the Sun VIII

• Focus on Residential and Non-

Residential PV. Data for utility- scale PV are published in LBNL’s companion Utility-Scale Solar annual report series

• Expanded Data Sources. Includes

installed price and cost data from a variety of other sources in order to supplement and benchmark the primary set of installed pricing trends

• New Analyses related to system

size and module efficiency trends, variation in installer-level pricing, and more details on characteristics

• f PV systems in the data sample

Summarize trends in the installed price of grid-connected residential and non-residential PV systems in the United States

Related National Lab Research Products

• Utility-Scale Solar: LBNL annual report on utility-scale solar (PV and CSP)

describing trends related to project characteristics, installed prices, operating costs, capacity factors, and PPA pricing

• The Open PV Project: Online data visualization tool developed by NREL that

incorporates data underlying the Tracking the Sun and Utility-Scale Solar reports

• Photovoltaic System Pricing Trends: Historical, Recent, and Near-Term

Projections: Annual briefing produced jointly by NREL and LBNL that provides a broad overview of PV pricing trends, drawing from Tracking the Sun and other

• ngoing research activities at both labs
• In-Depth Statistical Analyses of PV pricing data by researchers at LBNL and

several academic institutions examining PV pricing dynamics and underlying drivers, using more-advanced statistical techniques

These and other solar energy publications are available at http://emp.lbl.gov/projects/solar

3

Tracking the Sun is produced in conjunction with several related and ongoing research activities by LBNL and NREL

Outline

• Data Sources, Methods, and Sample Description
• Historical Trends in Median Installed Prices
• Variation in Installed Prices
• Conclusions

4

Key Definitions and Conventions

Installed price: The up-front $/W price paid by the PV system owner, prior

to incentives (see next 2 slides for discussion of TPO and data limitations)

Customer Segments*:

• Residential PV: Single-family residences and, depending on the

conventions of the data provider, also multi-family housing

• Non-Residential PV: Non-residential roof-mounted systems of any size,

and non-residential ground-mounted systems up to 5 MWAC

• Utility-Scale PV (not included in this report): Ground-mounted systems

≥5 MWAC

*These customer segment definitions may differ from other market reports

Units:

• Monetary values expressed in real 2014 dollars
• System size and capacity data expressed in DC units (module nameplate)

5

Data Sources and Limitations

6

Installed price trends are based on project-level data:

• Derived primarily from state agencies and utilities that administer PV

incentive programs, solar renewable energy credit registration systems,

• r interconnection processes (~50 entities in total)
• Supplemented with data from other public sources (FERC Form 1, U.S.

Treasury Department’s Section 1603 Grant Program, trade press, etc.)

Key Data Limitations

• Self-reported by PV installers and therefore susceptible to inconsistent reporting

practices

• Differs from the underlying cost borne by the developer or installer (price ≠ cost)
• Historical and therefore may not be representative of systems installed more

recently or current quotes for prospective projects

• Excludes a sub-set of third-party owned (TPO) systems, for which reported

prices represent appraised values (see next slide)

Data Cleaning and Standardization

• Standardize spellings of installer, module, and inverter names
• Assign attributes based on equipment data: module efficiency and type,

building integrated vs. rack-mounted, microinverter vs. standard inverter

• Infer system ownership (host-owned or TPO) if data not provided directly
• Remove systems from final data sample if:

– Missing valid data for installed price, system size, or installation date – Battery back-up – Self-installed – Integrated TPO systems (see below)

7

Treatment of Third-Party Owned (TPO) Systems in the Data Sample and Analysis

• Integrated TPO. A single company provides both the installation service and customer
• financing. Reported prices represent appraised values. Excluded from analysis.
• Non-Integrated TPO. Customer finance provider purchases system from installation
• contractor. Reported prices represent sale price to customer finance provider. Retained

in analysis.

Sample Size Compared to Total U.S. Market

• Sample erosion in 2013/14 due primarily to transition issues in California (i.e.,

transfer of data collection from incentive program to utilities’ net metering and interconnection processes)

• Most other major markets well represented, with the exception of Hawaii
• Removal of integrated TPO and other excluded systems reduces the final data

sample to roughly 320,000 systems

8

Total U.S. residential and non-residential PV capacity additions are based on GTM Research and SEIA (2015). LBNL adjusted those values to maintain consistency with how the non-residential sector is defined within this report, relying in part on data from GTM Research (2015a).

Preliminary data sample:

• >400,000 systems

through 2014

• 81% of U.S. Res. +

Non-Res. capacity through 2014

• 62% of 2014 U.S.

capacity additions

1 2 3 4 5 2 4 6 8 10

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Installation Year Cumulative Capacity Additions: Total U.S. Market Cumulative Capacity Additions: Prelim. Data Sample Annual Capacity Additions: Total U.S. Market Annual Capacity Additions: Prelim. Data Sample

• Cumul. Capacity Add's (GWDC)

Residential & Non-Residential PV Annual Capacity Add's (GWDC)

Data Sample Characteristics: System size trends and distribution among states

• Residential system sizes

growing steadily over time (6.2 kW in 2014)

• Non-Res. systems in the

sub-500 kW class are generally small (20-30 kW)

• Non-Res. systems >500

kW also growing in size (1,100 MW in 2014)

9

Distribution Across States System Size Trends

1 2 3 4 5 6 7

1998 2002 2006 2010 2014

Residential Median Size (kWDC) 10 20 30 40 50 60

1998 2002 2006 2010 2014

Installation Year Non-Res. ≤500 kWDC 200 400 600 800 1,000 1,200

1998 2002 2006 2010 2014

Non-Res. >500 kWDC

Other AZ NY NJ MA NC CA 0% 20% 40% 60% 80% 100% 1998 2002 2006 2010 2014

Percent of Sample Systems Residential

1998 2002 2006 2010 2014

Installation Year Non-Res. ≤500 kWDC

2002 2006 2010 2014

Non-Res. >500 kWDC

• Sample spans 42 states,

though heavily weighted toward 6 states (CA , NC, MA, NJ, NY, AZ)

• Prominence of CA has

declined over time, as in the broader market

Data Sample Characteristics: Distribution by system ownership

Res & Non-Res ≤500 kW:

• Total TPO shares grew to

~60% of sample by 2012, remaining near that level through 2014

• Much higher TPO shares
• f sample for some states

(80-90% in AZ, NJ)

• Integrated TPO shares

have continued to grow; increasing percentage of systems excluded from final data sample

• Most pronounced for AZ

(65% of 2014 residential sample is integrated TPO)

10

Distribution by System Ownership*

Percent of Preliminary Sample Installation Year

Customer-Owned Non-Integrated TPO (Retained in Sample) Integrated TPO (Excluded from Sample) 0% 20% 40% 60% 80% 100% 1998 2000 2002 2004 2006 2008 2010 2012 2014

Residential

1998 2000 2002 2004 2006 2008 2010 2012 2014

Non-Res. ≤500 kWDC

2002 2004 2006 2008 2010 2012 2014

Non-Res. >500 kWDC

* This figure is based on the preliminary data sample in order to illustrate consistency with the broader U.S. market and to show explicitly how exclusion of integrated TPO systems impacts the final data sample used for analysis; unless otherwise indicated, all other figures are based on the final data sample.

Non-Res >500 kW:

• TPO emerged earlier than for other segments,

but plateaued at somewhat lower level

• Negligible presence of integrated TPO

Outline

• Data Sources, Methods, and Sample Description
• Historical Trends in Median Installed Prices
• Variation in Installed Prices
• Conclusions

11

Installed Prices Continued their Rapid Descent through 2014

12

National median installed prices in 2014 declined YoY by $0.4/W (9%) for residential systems, by $0.4/W (10%) for non-residential systems ≤500 kW, and by $0.7/W (21%) for non-residential systems >500 kW

Note: Median installed prices are shown only if 20 or more observations are available for a given year and customer segment.

$0 $2 $4 $6 $8 $10 $12

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Installation Year

Residential Non-Residential ≤500 kW Non-Residential >500 kW

Median Installed Price 2014$/WDC

Preliminary Data for 2015 Show Installed Price Declines Are Keeping Pace with Recent Trends

Compared to 2014, median installed prices in H1 2015 fell by $0.3/W (8%) for residential systems, $0.5/W (13%) for non-res. systems ≤500 kW, and $0.2/W (6%) for non-residential systems >500 kW

13

Note: The figure is based on data from only a subset of programs from the larger dataset, and therefore cannot be directly compared to other figures in the slide deck.

$0 $1 $2 $3 $4 $5

2014 (H1) n=15,529 2014 (H2) n=13,688 2015 (H1) n=14,368 2014 (H1) n=1,038 2014 (H2) n=865 2015 (H1) n=704 2014 (H1) n=77 2014 (H2) n=78 2015 (H1) n=71

Installation Period

Residential Non-Residential ≤500 kW Non-Residential >500 kW

Median Installed Price (AZ, CA, CT, MA, NJ, NY) 2014$/WDC

Installed Price Declines Have Continued Despite Flat Module Prices

• Steep reductions in module prices were the primary driver for installed price

reductions from 2008 to 2012 (~80% of the total installed price decline)

• Since 2012, however, module prices have remained relatively flat, and installed

price declines have been driven primarily by reductions in non-module costs (including installer margins)

14

Notes: The Module Price Index is the U.S. module price index published by SPV Market Research (Mints 2015). Implied Non-Module Costs are calculated as the Total Installed Price minus the Module Price Index, and therefore include installer profit margin.

$0 $2 $4 $6 $8 $10 $12

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Installation Year

Total Installed Price (Median) Module Price Index Implied Non-Module Costs

Residential PV 2014$/WDC

Recent Non-Module Cost Reductions Are Associated Primarily with Declining Soft Costs

• Hardware component prices (inverters and racking) have fallen

significantly (GTM Research and SEIA 2015), though comprise only 10- 20% of the total drop in non-module costs from 2013 to 2014

• Remainder is attributable mostly to soft costs reductions, stemming partly

from technical factors (that can be readily quantified):

– Increasing system size (~10% of total YoY non-module cost reduction) – Increasing module efficiency (~15% of total YoY non-module cost reduction)

15

13% 14% 15% 16% 17%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Module Efficiency Installation Year All Systems Poly Systems Residential and Non-Residential Systems Median Module Efficiency

• Soft cost reductions also

associated with:

– Widespread policy and industry efforts aimed at reducing soft costs – Steady reductions in incentives (next slide)

Notes: “All Systems” is based on all residential and non-residential systems in the data sample, regardless of module technology, while “Poly Systems” is based on only those systems with poly-crystalline modules. The figure is based on data from 200,930 systems installed over the 2006 to 2014 period, for which module efficiencies could be identified.

Median Module Efficiency in Data Sample

Installed Price Declines Have Been Partially Offset by Falling State and Utility Incentives

Reductions in rebates and PBIs since their peak equate to 70% to 120% of the corresponding drop in installed prices

16

Notes: The figure depicts the pre-tax value of rebates and PBI payments (calculated on a present-value basis) provided through state/utility PV incentive programs, among only those systems that received such incentives. Although not shown in the figure, a growing portion of the sample received no direct cash incentive. Also note that the data are organized according to the year of installation, not the year in which incentives were reserved.

$0 $1 $2 $3 $4 $5 $6 $7

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2014$/WDC Installation Year

CA (ERP, SGIP, CSI) NJ (CORE, REIP) NY (NYSERDA) AZ (APS, SRP, TEP) MA (MassCEC) All Other Programs

Residential and Non-Residential PV Median Pre-Tax Rebate or PBI (Present Value)

• Rebates and performance-

based incentives (PBIs) have declined from $5-7/W at their peak to less than $1/W (or zero) in most major markets

• Incentive reductions partly a

response to installed price declines and the emergence

• f other forms of incentives

(SRECs, ITC, improved monetization of tax benefits)

• Ratcheting down of

incentives also a deliberate strategy by some states to induce cost reductions

National Median Installed Prices Are Relatively High Compared to Other Recent Benchmarks

Medians differ from other benchmarks due to:

• Timing: Systems installed vs.

quoted in 2014

• Location: Most systems in

relatively high-cost states

• Price vs. cost: SolarCity and

Vivint data represent costs

• Value-based pricing: Prices

in some locations may reflect supra-normal margins

• System size/components:

high-efficiency modules, microinverters, etc.

• Scope of costs included: loan
• rigination fees, re-roofing

costs, etc.

• Installer characteristics: size,

experience, business model

17

National median prices for systems installed in 2014: $4.3/W (res.), $3.9 /W (sm. non-res.), $2.8/W (lg. non-res.)

Notes: LBNL data are the median and 20thand 80th percentile values among projects installed in 2014. NREL data are the median and 20thand 80th percentile ranges from Monte Carlo modeling of U.S. turnkey prices for 5 kW residential and 200 kW commercial systems, representative of bids issued circa Q4 2013 (Davidson et al. 2014, Feldman et al. 2014). GTM/SEIA data are modeled turnkey prices for Q1 and Q4 2014; residential price is for 5-10 kW system with standard crystalline modules installed by company with at least 600 systems per year, while commercial price is for a 300 kW “minimalist” flat-roof system, with further details available from the reference source (GTM Research and SEIA 2015). Lazard data are the range reported in their Sept. 2014 levelized cost of energy analysis (Lazard 2014). EnergySage data are the 20thand 80th percentile range among price quotes issued in 2014, calculated by LBNL from data provided by EnergySage. Petersen-Dean data are the minimum and maximum values from a series of online price quotes for turnkey systems across a range of sizes (3.3 to 8.3 kW) and states (AZ, CA, and TX), queried from the company website by LBNL in May 2015. SolarCity and Vivint data are the companies’ reported average costs, inclusive of general administrative and sales costs, for Q1 and Q4 2014 (SolarCity 2015, Vivint Solar 2015). SolSystems data are the lowest and highest “developer all-in asking prices” among the company’s monthly Sol Project Finance Journal reports issued in 2014 (e.g., SolSystems 2014).

$0 $1 $2 $3 $4 $5 $6

NREL GTM/SEIA Lazard EnergySage Pet.-Dean SolarCity Vivint LBNL Modeled Price Quotes Installer Reports

2014$/WDC Residential

≤500 kW >500 kW NREL GTM/SEIA Lazard EnergySage SolSystems (≤500 kW) SolSystems (500 kW - 2 MW) LBNL Modeled Price Quotes

Non-Residential

Quarterly turnkey prices Benchmark-specific range Quarterly average cost

Installed Prices in the United States Are Higher than in Most Other Major National PV Markets

• Installed prices differ across countries largely due to soft costs (Seel et al. 2014,

Ardani et al. 2012, Friedman et al. 2014, RMI and GTRI 2014)

• Soft cost differences are driven partly by deployment scale, though a wide variety
• f other factors also likely play a role

18

Notes: Installed price data for all countries other than the U.S. are based on annual country reports submitted to the IEA Photovoltaic Power Systems Programme (IEA-PVPS 2015). Prices for all countries exclude sales or value-added tax (VAT). Data for cumulative distributed PV capacity additions are based on REN21 (2015), IEA-PVPS (2015), EPIA (2014), Shaw (2015).

$2.1 $3.5 $2.7 $4.2 $1.9 $5.1 $1.8 $1.6 $3.0 $2.1 $3.8 $1.2 $3.1 $1.6

10 20 30 40 $0 $2 $4 $6 $8 Germany Japan Italy USA China France Australia

Residential Installed Price (left-axis) Small Non-Res. Installed Price (left-axis) Cumulative Distributed PV Capacity (right-axis)

GWDC 2014$/WDC Installed Prices for 2014

Outline

• Data Sources, Methods, and Sample Description
• Historical Trends in Median Installed Prices
• Variation in Installed Prices
• Conclusions

19

Installed Prices Vary Widely Across Projects Though have narrowed over time

Wide distributions in system pricing reflect variation in:

• Project characteristics
• Local market and regulatory

environment

• Installer size, experience,

business model

• Labor rates, taxes, permitting

and interconnection processes

Narrowing is consistent with a maturing market characterized by increased competition and better- informed consumers

20 Installed Price Distributions for Systems Installed in 2014 Installed Price Percentile Ranges over Time

• $4
• $2

$0 $2 $4 $6

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Installation Year

Residential Non-Residential ≤500 kW Non-Residential >500 kW

Median 2014$/WDC 80th Percentile 20th Percentile Percentile Range for Installed Price Distributions (Vertical axis shows distance from median) 1 2 3 4 5 6 7 8 9 10

0% 5% 10% 15% 20% 25% 30% 35%

Frequency Residential

n=45,368

1 2 3 4 5 6 7 8 9 10 Non-Res. ≤500 kWDC Installed Price (2014$/WDC)

n=2,634

1 2 3 4 5 6 7 8 9 10

Median 20th/80th Percentiles

Non-Res. >500 kWDC

n=213

Note: Percentile bands are shown only if 20 or more observations are available for a given year and customer segment.

Recent Studies Shed Light on Installed Pricing Variation and Dynamics for Residential PV

Gillingham et al. (2014) estimated the effects of a broad set of drivers on residential PV pricing, including variation in system size ($1.5/W effect), density of installers ($0.5/W effect), consumer value of incentives and electricity bill savings ($0.4/W effect), and installer experience ($0.2/W effect) Dong and Wiser (2013) found installed price differences of $0.3/W to $0.8/W between cities in California with the least- and most-onerous permitting practices Burkhardt et al. (2014) found that local permitting procedures alone impact installed prices by $0.2/W, while the combination of permitting and other local regulatory procedures impacts prices by $0.6/W to $0.9/W Dong et al. (2014) found that, historically, 95% to 99% of rebates in California were passed through to consumers, rather than retained as increased installer margins

Studies available at http://emp.lbl.gov/projects/solar

21

LBNL and academic partners (Yale, U. of Wisconsin, U. of Texas) applied more-advanced statistical and econometric methods to the Tracking the Sun dataset, focusing on residential systems

• For residential systems

installed in 2014, median prices were roughly 15% lower for 8-10 kW systems than for 2-4 kW systems

• Among non-res. systems

installed in 2014, median installed prices were 36% lower for the largest (>1,000 kW) than for the smallest (≤10 kW) non-res. systems

• Even greater economies of

scale may arise when progressing to utility-scale systems, which are outside the scope of this report

Economies of Scale Occur Among Both Residential and Non-Residential Systems

22 Residential Systems Non-Residential Systems

$4.3 $4.7 $4.5 $4.2 $4.0 $4.0 $3.9 $3.9 $3.9 $3.9 $4.0

$0 $2 $4 $6 $8

≤2 kW n=1,784 2-4 kW n=7,389 4-6 kW n=12,826 6-8 kW n=10,339 8-10 kW n=6,842 10-12 kW n=3,151 12-14 kW n=1,438 14-16 kW n=687 16-18 kW n=350 18-20 kW n=207 >20 kW n=355

2014$/WDC System Size Range (kWDC) Residential Systems Installed in 2014 Median Installed Price and 20th/80th Percentiles

$4.2 $3.8 $3.8 $3.7 $3.6 $3.4 $2.9 $2.7

$0 $2 $4 $6 $8

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

2014$/WDC System Size Range (kWDC) Non-Residential Systems Installed in 2014 Median Installed Price and 20th/80th Percentiles

Installed Prices Differ Among States Relatively high prices in some large state markets

• Some of the largest markets

(CA, MA, NY) are relatively high-priced, pulling overall U.S. median prices upward

• Pricing in most states is

below the national median

• Cross-state variation may

reflect differences in installer competition and experience, retail rates and incentive levels, project characteristics particular to each region, labor costs, sales tax, and permitting and administrative processes

• High degree of variability also
• ccurs within states

23

Note: Results shown only if 20 or more observations are available for the state

Residential Systems Non-Residential Systems

$3.4 $3.4 $3.5 $3.6 $3.6 $3.6 $3.7 $3.9 $3.9 $3.9 $3.9 $4.1 $4.2 $4.2 $4.3 $4.4 $4.4 $4.4 $4.6 $4.7 $4.8

$0 $2 $4 $6 $8

DE 249 TX 853 FL 39 NH 450 AZ 5525 NV 578 CO 870 CT 1467 UT 159 MD 535 NJ 3706 WI 245 OR 765 RI 59 NM 769 IL 140 MA 4551 VT 902 CA 16432 NC 168 NY 6890

2014$/WDC State and Sample Size Residential Systems Installed in 2014 Median Installed Price and 20th/80th Percentiles

U.S. $2.9 $2.9 $3.0 $3.2 $3.4 $3.5 $3.6 $3.6 $3.7 $4.0 $4.0 $4.1 $4.1 $2.6 $2.7 $2.8 $3.1

$0 $2 $4 $6 $8

TX 76 NV 90 CT 24 MD 24 NH 23 NJ 198 OR 48 AZ 138 RI 25 NY 493 UT 71 MA 549 CA 770 MA 47 NC 37 NJ 40 CA 59 Non-Residential ≤500 kW Non-Residential >500 kW

2014$/WDC State and Sample Size Non-Residential Systems Installed in 2014 Median Installed Price and 20th/80th Percentiles

Non-Res. ≤500 kW Non-Res. >500 kW U.S.

Installed Prices Reported for TPO Systems Are Generally Similar to Customer-Owned Systems

• At the national level, installed

price differential between integrated TPO and customer-

• wned systems has inverted
• ver time, but has generally

been small (top figure)

• Implies that growth of TPO

has not had a material impact

• n national median installed

price trends

• In some states, installed

prices differ more substantially between TPO and customer-

• wned residential systems,

potentially contributing to cross-state price differences (bottom figure)

24

Notes: The values shown here for TPO systems are based on systems financed by non-integrated TPO providers, for which installed price data represent the sale price between the installation contractor and customer finance provider.

$6.9 $6.2 $5.4 $4.8 $4.4 $6.4 $5.4 $4.9 $4.3 $4.0 $5.5 $4.8 $4.4 $3.5 $2.7 $7.2 $6.4 $5.4 $4.6 $4.2 $7.1 $6.0 $5.0 $4.3 $3.7 $5.9 $4.6 $4.4 $3.5 $2.9

$0 $2 $4 $6 $8 $10

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Residential Non-Residential ≤500 kW Non-Residential >500 kW TPO Customer-Owned

2014$/WDC Median Installed Price and 20th/80th Percentiles

$3.2 $4.7 $2.8 $4.0 $4.1 $3.9 $3.5 $4.6 $4.1 $3.7 $4.5 $3.8 $3.9 $4.6 $4.1 $3.7 $4.1 $4.2

$0 $2 $4 $6 $8

AZ n=1688, 2123 CA n=7262, 9123 CO n=120, 750 CT n=295, 1172 MA n=884, 3407 NJ n=3106, 588 NV n=193, 385 NY n=2090, 1943 OR n=44, 645 TPO Customer-Owned

Residential Systems Installed in 2014 Median Installed Price and 20th/80th Percentiles 2014$/WDC

Prices Vary Considerably Across Residential Installers Operating within the Same State

• “Low-price leaders” provide a benchmark for what may be achievable in terms of

near-term installed price reductions within the broader market (e.g., 20% of installers in Arizona have median prices below $3.0/W)

• High-priced installers may specialize in “premium” systems or may include in their

reported prices additional items beyond what is typically counted as part of the PV system (e.g., loan origination fees, re-roofing costs, etc.)

25

Notes: Each line includes only installers that completed at least 10 residential systems in the given state in 2014.

Within each of the four states shown, installer-level median prices differ by $1.1/W to $1.4/W between the 20% and 80%iles (and by more across the full set of installers)

Larger Residential Installers Seemingly Do Not Have Lower Prices

The figure segments projects according the number of in- state systems the associated installer completed in 2014

• AZ and NJ: No clear

relationship between price and installer volume

• CA and MA: Seemingly

higher prices for mid-sized installers than for lower- or higher-volume companies

26

Notes: Each bin includes at least 3 installers and, with the exception of the ≤10 systems bin, at least 15%

• f all residential systems in the sample installed in-state in 2014. For California, installer volumes are

based on market volumes from GTM’s U.S. PV Leaderboard (GTM Research 2015b). For all other states, they are calculated from the preliminary data sample, and therefore include integrated TPO systems and

• ther excluded systems not used for the purpose of calculating installed price statistics.

$3.5 $3.5 $3.6 $3.6 $4.4 $4.7 $5.0 $4.6 $4.4 $4.0 $4.4 $4.6 $4.4 $3.9 $4.0 $3.9 $3.8

$0 $2 $4 $6 $8

≤10 11-50 51-250 251-1000 ≤10 11-50 51-250 251-1000 >1000 ≤10 11-50 51-250 251-1000 ≤10 11-50 51-250 251-1000 Arizona California Massachusetts New Jersey

Number of In-State Residential Systems per Installer in 2014 2014$/WDC Residential Systems Installed in 2014 Median Installed Price and 20th/80th Percentile

Each bar represents the median installed price among all systems installed by companies with the specified number

• f in-state residential systems completed in 2014.

What to conclude?

• Installer size effects arise at geographical scales other than the state-level?
• Installer size effects are simply obscured by other unrelated factors?
• Installer size effects are offset by countervailing factors (e.g., higher customer

acquisition costs for high-volume installers)?

Residential New Construction Offers Significant Installed Price Advantages Compared to Retrofit

• PV systems installed in new

construction tend to be small and have high incidence of premium modules (top chart)

• Nevertheless, residential new

construction systems in CA were $0.7/W less than retrofits in 2014 (bottom chart)

• Price advantage is even

greater if comparing 1-4 kW systems with mono-crystalline modules

• Illustrates economies of scale

and scope in new construction (particularly for large housing developments)

27

$8.1 $6.3 $5.2 $4.6 $4.0 $7.3 $6.3 $4.9 $4.6 $4.1 $7.2 $6.7 $5.8 $5.1 $4.7 $8.1 $7.2 $6.5 $5.6 $5.5

$0 $2 $4 $6 $8 $10 $12

2010 n=884, 14599 2011 n=1500, 17127 2012 n=2859, 23144 2013 n=3712, 25137 2014 n=2355, 13535 2010 n=137, 2633 2011 n=623, 3496 2012 n=1889, 3198 2013 n=3026, 2010 2014 n=1917, 938 All Systems 1-4 kW, Rack-Mounted, Mono-crystalline

New Construction Retrofit

2014$/WDC California Residential Systems Median Installed Price and 20th/80th Percentiles 1 2 3 4 5 6 7

2010 2011 2012 2013 2014

kWDC Retrofit New Construction California Residential Systems Median System Size 0% 20% 40% 60% 80% 100%

2010 2011 2012 2013 2014

Percent of Systems with BIPV or Mono-Crystalline Modules

Installed Prices Are Higher for Systems at Tax-Exempt Customer Sites than at For-Profit Commercial Sites

Compared to systems installed at for-profit commercial sites

• Median prices at tax-exempt sites in 2014 were $0.3/W higher for systems ≤500

kW and $0.6/W for systems >500 kW

• May reflect potentially lower negotiating power, more onerous permitting and

procurement, and higher incidence of prevailing wage/union labor requirements, domestically manufactured components, and shade or parking structures

28

$6.8 $5.7 $4.9 $4.2 $3.8 $5.3 $4.4 $4.0 $3.3 $2.7 $7.4 $6.0 $5.4 $4.6 $4.1 $6.5 $5.1 $5.0 $4.1 $3.3

$0 $2 $4 $6 $8 $10

2010 n=2569, 34682 2011 n=3283, 38714 2012 n=3866, 46961 2013 n=2676, 51507 2014 n=1365, 45365 2010 n=86, 48 2011 n=255, 91 2012 n=237, 124 2013 n=204, 103 2014 n=140, 57 Non-Residential ≤500 kW Non Residential >500 kW

Commercial Site Host Tax-Exempt Site Host

2014$/WDC Non-Residential Systems Median Installed Price and 20th/80th Percentiles

Tax-exempt customers

• Schools, government

facilities, non-profits, religious organizations

• Represent 10% of

non-res. systems ≤500 kW and 30% of non-res. systems >500 kW in sample

Installed Prices Are Substantially Higher for Systems with High-Efficiency Modules

• Roughly one-quarter of 2014

systems in the sample have module efficiencies >18% (top chart)

• Systems with >18% efficiency

modules had a median installed price $0.8/W higher than systems with mid/low- efficiency modules in 2014

• Cost premium for high-

efficiency modules appears to

• utweigh associated reduction

in BOS costs (though tradeoffs between module technologies entail a broader set of considerations)

29

13% 15% 17% 19% 21% 0% 5% 10% 15% 20% 25% 30% 35%

Frequency Residential

Median 13% 15% 17% 19% 21%

Module Efficiency Non-Res. ≤500 kWDC

13% 15% 17% 19% 21%

Non-Res. >500 kWDC

$7.0 $6.3 $5.4 $4.6 $4.1 $6.7 $5.8 $5.0 $4.2 $3.8 $7.9 $7.1 $5.9 $5.2 $4.9 $7.7 $6.4 $6.0 $4.9 $4.6

$0 $2 $4 $6 $8 $10

2010 n=20391, 3406 2011 n=22289, 5171 2012 n=25728, 9688 2013 n=30139, 11247 2014 n=23538, 7630 2010 n=1515, 167 2011 n=2238, 163 2012 n=2855, 273 2013 n=2553, 161 2014 n=1560, 155 Residential Non-Residential ≤500 kW

Module Efficiency ≤18% Module Efficiency >18%

2014$/WDC Median Installed Price and 20th/80th Percentiles Notes: Module efficiencies were identified or estimated for the roughly 70% of systems in the 2014 sample for which data on module manufacturer and model were available.

Microinverters Have an Apparently Small Effect

• n Installed Prices
• Penetration of microinverters

has grown substantially for residential and smaller non- residential systems (top chart)

• Microinverters cost roughly

$0.3/W more than standard inverters in 2014 (GTM Research and SEIA 2015)

• Differential in total system

prices has generally been smaller, though size and directionality varies over time (bottom chart)

• Microinverters may offer some
• ffsetting reductions in other

BOS and soft costs

30

0% 10% 20% 30% 40% 50%

2010 2011 2012 2013 2014

Installation Year Residential Non-Residential ≤500 kW Non-Residential >500 kW Microinverter Share of Sample

Final Sample Preliminary Sample (w/ integrated TPO systems) $7.1 $6.7 $5.7 $4.7 $4.1 $7.0 $5.9 $5.1 $4.2 $4.1 $7.1 $6.3 $5.4 $4.7 $4.3 $6.8 $5.8 $5.1 $4.4 $3.8

$0 $2 $4 $6 $8 $10

2010 n=4111, 23544 2011 n=8010, 24548 2012 n=11183, 30197 2013 n=14368, 29175 2014 n=12316, 20984 2010 n=94, 2051 2011 n=284, 3014 2012 n=791, 3602 2013 n=498, 2304 2014 n=395, 1654 Residential Non-Residential ≤500 kW

Microinverter Standard Inverter

2014$/WDC Median Installed Price and 20th/80th Percentiles

Installed Prices for Large Non-Residential Systems Vary with Use of Tracking Equipment

• A relatively high percentage
• f large (>500 kW) non-

residential systems in the data sample are ground- mounted (70% in 2014), often with tracking (20% in 2014)

• As expected, systems with

tracking have higher installed prices than those without

31

Notes: The figure is derived from the relatively small subsample of systems for which data were available indicating whether the system is roof- or ground-mounted, and whether or not it has tracking.

$5.8 $4.8 $4.5 $4.2 $3.1 $5.9 $4.2 $4.3 $3.4 $2.7 $4.8 $4.3 $4.3 $3.5 $2.6

$0 $2 $4 $6 $8

2010 n=21, 17, 36 2011 n=33, 42, 95 2012 n=54, 61, 105 2013 n=25, 91, 62 2014 n=16, 42, 29 Ground, Tracking Ground, Fixed Rooftop

2014$/WDC Non-Residential Systems >500 kW Median Installed Price and 20th/80th Percentiles

• Among 2014 systems, the installed price premium for those with tracking was

$0.4/W (15%) compared to fixed-tilt, ground-mounted systems and $0.5/W (19%) compared to roof-mounted (though small sample sizes can lead to erratic results)

• Installed price premium is on par with performance improvement from tracking

(e.g., 12-25% increase in generation, per Drury et al. 2013)

Outline

• Data Sources, Methods, and Sample Description
• Historical Trends in Median Installed Prices
• Variation in Installed Prices
• Conclusions

32

Conclusions

• PV installed prices declined substantially from 1998 through 2014 (and into 2015),

but the pace and source of those reductions have varied over time

• Dramatic declines in module prices from 2008 to 2012 were the driving force

behind reductions in installed system prices over that period, but module prices have since flattened (or risen slightly)

• The continued decline in installed prices is attributable to steady reductions in non-

module costs and suggests that recent efforts by industry and policymakers to target soft costs have begun to bear fruit

• Lower installed prices in other major national PV markets and within some U.S.

states, as well as the high degree of variability in U.S. system pricing, suggests that deeper reductions in soft costs are possible in the near term

• Achieving dramatic reductions in soft cost may accompany market scale, but also

likely requires some combination of incentive policy designs that provide a stable and straightforward value proposition, targeted policies aimed at specific soft costs, and basic and applied research and development

33

For more information

Download the report along with the companion briefing and data file:

trackingthesun.lbl.gov

Contact the authors:

Galen Barbose, GLBarbose@lbl.gov, 510-495-2593 Naïm Darghouth, NDarghouth@lbl.gov, 510-486-4570

Search other renewable energy publications and join our mailing list to receive notice of future publications:

http://emp.lbl.gov/reports/re

Thanks to the U.S. DOE’s Solar Energy Technologies Office for funding this work

34

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