THE PRICE OF SUN AROUND THE WORLD

Installed PV System Costs Continue to Exhibit Strong Global Variations

Michael Barker, November 30, 2012 (SolarBuzz)

“Solar photovoltaic (PV) module average selling prices (ASPs) are becoming somewhat normalized (or commoditized), with premium pricing available only in select countries or regions. However, further downstream, installed PV system costs continue to show a much wider range of pricing levels [varying with economies of scale and geographical regions]…

“On a dollar per watt basis the highest-cost region for solar PV installations continues to be Japan, with both small- and large-scale installations…Installed system pricing in Japan has been decreasing over time, however, in part as cheaper foreign modules gain market share and also assisted by the national residential incentive program’s price ceiling…[and] tiered rates…Other major markets within the Asia-Pacific region have lower installed costs, due to larger system sizes and increased downward pressure on component and labor costs…China has the lowest installed PV costs in the world…”

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“Within Europe, there is less variation…One of the highest cost markets in Europe is still the UK, but installed pricing there has been approaching mainland Europe norms…as competition has intensified…The US is the second-highest priced market in the world, due largely to ‘soft’ costs (permitting, regulations, etc.)…However, each state (or utility) has different requirements for permitting that can drastically affect overall PV system costs. Installed costs in the US are all trending downwards at approximately the same rate, due mainly to each accessing declining component costs.

“…[C]ommon to all countries…is consistently declining installed system costs…in large part due to rapidly declining component – especially PV module – ASPs, but other costs are also declining, especially in developed markets…There is also downward pressure coming from increased competition, especially as vertically-integrated manufacturers are entering the system installation space looking to secure product channels and boost overall margins…[From the competition, margins may] decline and pricing will become increasingly normalized across regions and countries…creating new opportunities in emerging markets…”

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