The U.S. Solar Industry trails Germany by 30 Years
In regards to the solar industry, the U.S. is about 30 years behind some European countries.The U.S. ranks third behind Germany and Spain for solar panel installations. The initial cash rebates, the production-based incentives and the tax credits presented by the national, state and the local authorities can be accounted as the reason behind the steady growth witnessed by the installations of solar photovoltaic (PV) systems.
The main reason that homeowners have been purchasing solar electric systems has been purely financial. Environmental concern, fuel prices, and energy demand also contribute to the popularity of solar generation during the past decade. As the growth is directly linked to the incentive policies of the government, it has become essential to keep track of the installed cost of PV systems by characteristics, location and by component.
To tackle this need, Lawrence Berkeley National Laboratory issued a report to identify the installed cost of grid-connected PV systems in the country. The study, titled, “Tracking the Sun II: The Installed Cost of Photovoltaics in the U.S. from 1998-2008,” was based on the cost data collected from more than 52,000 residential and non-residential PV systems from 1998 to 2008.
It was found that there was a decline in the average cost of going solar by more than 30% during the initial period. A three-year plateau was followed by the dropping costs by 3.6% from 2007 to 2008.
The report also identified that the gross cost of a solar installation before rebates fell from $10.80/W in 1998 to $7.50/W in 2008, which is equivalent to an average annual reduction of $0.30/W, or 3.6% per year. The was also a reduction in the non-module costs such as the cost of inverters, hardware, labor and overhead.
The reduction in the costs, suggests Navigant Consulting’s Global Module Price Index, from $7.80/W in 2007 to $7.50/W in 2008 is primarily attributable to wholesale module costs, which fell approximately by $0.50/W.
The study also reported that the significant increase in solar installations benefited from the economies of scale, as the support for larger system and increased demand reduced down the cost. More mature markets like Arizona, California and New Jersey enjoyed lower costs of installation than the rest of the country.
Some states have a declining rebate structure, which is supposed to allow the maturing solar industry to prosper without the need for incentives.
