Solar energy has declined significantly in recent years as market forces have driven installations. The latest data show that the continued decrease in solar prices is unlikely to slow down anytime soon, with total installed prices dropping by 5 percent for rooftop residential systems, and 12 percent for larger utility-scale solar farms.
With solar already achieving record-low prices, the cost decline observed in 2015 indicates that the coming years will likely see utility-scale solar become cost competitive with conventional forms of electricity generation.
A full analysis of the ongoing decline in solar prices can be found in two separate Lawrence Berkeley National Laboratory Reports: Tracking the Sun IX focuses on installed pricing trends in the distributed rooftop solar market while Utility-Scale Solar 2015 focuses on large-scale solar farms that sell bulk power to the grid.
Put together, the reports show that all categories of solar have seen significantly declining costs since 2010. Furthermore, larger solar installations consistently beat out their smaller counterparts when it comes to the installed cost per rated Watt of solar generating capacity
The installed cost includes everything needed to get a solar power system up and running: the panels, the power electronics, the mounting hardware, and the installation itself. The continued decline in total installed cost is noteworthy considering the fact that the price of the solar panels (or modules) themselves has remained relatively flat since 2012.
This means that the decline in installed cost observed since 2012 was largely caused by a decline in the cost of the inverters that convert the DC power produced by solar panels to AC power for the grid and other “soft” costs such as customer acquisition, system design, installation, and permitting.