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Solar power adoption in the US continues to pick up steam. As costs continue their downward trend and federal tax incentives are extended into 2022, more customers will make the shift to solar.

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Recent industry studies have documented rapid growth in megawatts of electricity-generating capacity installed by the U.S. solar-energy industry. Now, two new reports from the Lawrence Berkeley National Laboratory (LBNL) of the U.S. Department of Energy (DOE) suggest that the median prices for those solar installations have continued a long-term trend of decline, moving down 5 percent for distributed and 12 percent on the utility side during 2015.

While the largest cost reductions since 2006 were realized through lower panel costs, the next leg down is coming from reductions in periphery components and modularization.

The declines continued a six-year trend of price declines in installed solar—but the dynamics driving the declines seem to be shifting, at least in the U.S. In the years through 2012, annual price declines stemmed largely from falling prices in PV modules themselves. But since then, module prices have largely been flat. Instead, the recent LBNL study ties much of the year-to-year price decline for 2015 to decreases in “soft” costs such as marketing, system design, and installation labor, as well as to lower costs for some non-module equipment such as racks and inverters.

Installation pricing for utility-scale projects, meanwhile, mirrored the declines in the distributed-solar sector, with the median cost falling $0.30/W, or 12 percent year to year, in 2015. The 2015 median cost was, in fact, down 60 percent from its 2007-2009 levels, a stunning six-year drop.

But the US still lags far behind early national solar adopters such as Germany and will struggle to keep pace with the aggressive rollouts in countries such as India and China.

Interestingly, despite this long-term decline in U.S. distributed-solar costs, the study notes that U.S. costs remain far higher than those in most other national markets—residential-system costs, for example, typically weigh in at around US$1.70/W in Germany, versus a median installed price of US$4.10/W in the United States. Also, the report noted substantial geographical price variation within the United States itself, with higher-than-median prices in some states, such as California, Massachusetts and New York, which represent particularly large markets for solar. And installations that include high-efficiency PV modules seem to be able to command a significant price premium.

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Still, there has never been a better time to consider a home solar power system. When you consider the available tax credits and the relatively short term return on investment, solar still looks very attractive.


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