Solar power system costs down 30% since 1998 - South Florida Business Journal:

The installed costs of solar photovoltaic systems in the U.S. dropped 30 percent from 1998 to 2008, according to a report from Lawrence Berkeley National Laboratory.

Costs fell 4 percent in 2008, mainly because photovoltaic (PV) modules got cheaper. High demand for solar power systems in the three years before that kept prices of modules high.

In 2008, more factories came on line to make PV modules at the same time as the recession crushed demand, leading to a fall in prices.

Installed costs don’t include any rebates or tax incentives, and reflect the cost paid by the system’s owner.

From 1998 until 2007, costs of PV systems fell mainly because labor, marketing, overhead and other expenses got cheaper.

Researchers Ryan Wiser, Galen Barbose, Carla Peterman and Naim Darghouth studied 52,356 grid-connected PV systems installed in 16 states between 1998 and 2008. More than half – 27,947 – were in the CEC Emerging Renewables Program in California.

They found the average installed costs, in 2008 dollars, fell from $10.80 per watt to $7.50 per watt during the period.

Small PV systems, typically used on homes, saw costs fall the most over time.

Costs varied by region, too: In 2008, Arizona had the lowest, at $7.30 per watt, while Pennsylvania and Ohio were the most expensive, with average installed costs at $9.90 per watt.

By looking at other countries such as Germany and Japan, where solar power has been widely deployed and subsidized by the government, researchers found that such large deployments can drive down costs even further.

Paradoxically, although installed costs fell, drops in government subsidies and incentives over the period were steeper still, so it cost a consumer more in the end to install a PV system.

After incentives, net costs for residential PV systems was $5.40 per watt in 2008, up 1 percent from the year before. For commercial systems, net costs were $4.20 per watt, up 5 percent from 2007.

The full report, “Tracking the Sun II,” can be found here.