Average cost of solar dropped 50 percent over last 5 years
The cost of solar panel installation has never been lower. In fact, it has dropped 50 percent in just the last five years, according to a report published by the US Department of Energy’s Lawrence Berkeley National Laboratory this month.
2014 was the fifth consecutive year that saw solar costs decrease, it was the first in which price cuts primarily came from lower soft costs. Soft costs refer to expenses in areas other than construction and engineering, including marketing, inspection, installation labor and system design. According to the report, soft cost reductions are partly due to increases in system size and module efficiency, but mostly to the targeted effort of industry professionals and policy makers to reduce these costs. Previous reductions were largely attributed to drops in the price of photovoltaic solar panels themselves.
Although this month’s report indicates these efforts were effective, the nation still has plenty of room to further reduce its soft costs. For all of its recent improvements, the soft cost of solar installation in America is still higher than a number of other key solar markets, including Germany, China and Australia.
The recent slide in pricing bodes well for homeowners looking to install residential solar panels. Between 2013 and 2014 alone, the median price of solar panel installation dropped by 40 cents per watt, or 9 percent. So far, data from early 2015 suggests prices could be dropping at the same, or an even faster rate, this year.
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