Solar energy costs continue to fall at a healthy clip, making now the right time to go solar
The U.S. Department of Energy’s Lawrence Berkeley National Lab (LBNL) released a report which finds that the cost of installing solar photovoltaic (PV) systems fell 6-14% in the U.S. in 2012, and another 10-15% in the first six months of 2013, according the the California Solar Initiative.
What is the cause of these substantial cuts?
- The primary driver is the steep reduction in module prices, which accounts for 80 percent of the total price drop. However, it’s worth noting that panel prices may have bottomed out; we are starting to see creep in price.
- Headway is also being made in non-module costs, including inverters, mounting hardware, permitting and fees, and other costs.
Businesses are taking advantage of the current economics
Many of our customers are taking advantage of these solar price drops and are adding more solar to their facilities. There is a clear financial argument for why solar makes sense. Buying solar results in tax credits, lower operating costs, increased property value and a hedge against anticipated rising electricity prices, among other benefits.
Sysco Invests in More Solar Energy
Take for example Sysco – the largest North American distributor of food and related products. We installed a 1 megawatt rooftop and ground mount single axis tracking system at their Los Angeles facility last year. Operating costs were dramatically reduced, with an annual savings of nearly $150,000. Noticing the clear financial benefits, Sysco decided to add solar to their newly built facility in Riverside, CA. We are just finishing the construction of this additional 1 megawatt rooftop system.
Our customers actions — adding more solar energy — prove that solar is a viable, affordable option today.
So what’s next?
To coninue this downward price trend, we need public policy to help address the “soft” costs – customer acquisition, permitting and interconnection fees, and taxes. “Unlike module prices, which are established based on global supply and demand, soft costs can be influenced more directly by local, state and national policies aimed at accelerating deployment and removing market barriers,” said Galen Barbose, Berkeley Lab’s Environmental Energy Technologies Division and co-author of the report.