Poised to plunge: Global solar PV system pricing

September 15, 2015

By William Pentland

Solar photovoltaic (PV) prices are poised to plunge by a whopping 40 percent over the next five years, according to a new report by GTM Research.

Credit: Ryan McVay

The report, "PV Balance of Systems 2015: Technology Trends and Markets in the U.S. and Abroad," projects that the global average installed cost of solar PV systems will fall from $2.16 per watt in 2014 to $1.24 per watt by 2020.

The steep decline in solar PV prices is projected to result from innovations reducing costs in solar PV's balance of system (BOS). The balance of system represents all components of a solar PV system other than the panels, including wiring, switches, mounting systems, inverters and so forth.

In 2007, the BOS costs represented only 58 percent of the total installed costs (the module costs accounted made up the remaining 42 percent). Currently, the BOS costs account for 77 percent of the total installed cost for solar PV systems installed in the U.S. residential sector.

The shift in solar PV cost structure results from the rapid declines in the price of solar panels (or, modules). The balance of system costs declined between 2007 and 2014 between 39 percent and 64 percent, depending on market segment and geography. Solar panel prices simply fell faster during that time period.

"While declining module costs remain important, innovations in PV power electronics, structural hardware, installation processes, and the integration of PV systems as a whole will be the primary push toward more economically competitive solar in the wake of waning global incentives," said GTM analyst MJ Shiao.

For more:
- see this background article

http://www.fierceenergy.com/story/poised-plunge-global-solar-pv-system-pricing/2015-09-15