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Solar PV Cheaper to Install on New Production Homes than Retrofits

The report found clear advantages in an economy of scale, especially for large volume builders.


Key Findings:

•  PV systems installed in new construction tend to be small and have high incidence of premium modules (top chart)

•  Nevertheless, residential new construction systems in CA were $0.5/W less than retrofits in 2015.


•  Price advantage is even greater ($0.8/W) if comparing among 1-4 kW systems with premium efficiency modules.

•  The data illustrates economies of scale and scope in new construction (particularly for large housing developments).

Along with this data, the study also arrived at the following conclusions:

  • PV installed prices declined substantially from 1998 through 2015 (and into 2016), but the pace and source of those reductions have varied over time.
  • Dramatic declines in module prices from 2008 to 2012 were the driving force behind reductions in installed system prices over that period, but module prices have since flattened (or risen slightly)
  • The continued decline in installed prices is attributable to steady reductions in non- module costs and suggests that recent efforts by industry and policymakers to target soft costs have begun to bear fruit
  • Lower installed prices in other major national PV markets and  within some U.S. states, as well as the high degree of variability in U.S. system pricing, suggests  that  deeper reductions in soft costs  are  possible in the near term
  • Achieving dramatic reductions in soft cost may accompany market scale, but also likely requires some combination of incentive policy designs that provide a stable and straightforward value proposition, targeted policies aimed at specific soft  costs, and basic and applied research and development.

Download the report summary (33 pages) HERE.

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