The study Tracking the Sun attributes the cost reduction in large part to effective state solar incentive programs, most notably in California and New Jersey. Advocates from the Vote Solar Initiative, the Solar Alliance and the Solar Energy Industries Association (SEIA) lauded the findings as evidence that effective renewable energy policy can advance a strong solar market in the United States.
"Our findings suggest that well-designed state programs can lower solar energy costs by driving economies of scale and fostering competition," said Ryan Wiser, staff scientist at Lawrence Berkeley National Laboratory and co-author of the report. "Most notably, the two largest PV markets in the U.
S. California and New Jersey have among the lowest average installed solar costs, supporting the premise that policies that accelerate deployment can have a direct, positive impact on the market price of solar."
Clean, abundant energy from the sun creates more jobs per megawatt than any other energy technology. In order to harness the economic and environmental benefits of this largely untapped energy opportunity, solar production and distribution need to be scaled up in order to bring costs down. Vote Solar, the Solar Alliance and SEIA work to advance energy policies that jump-start robust, self-sustaining solar markets in the United States.
"Solar will be big when it is cheap. This report demonstrates that local market development plays a key role in bringing solar costs down," said Adam Browning, executive director of Vote Solar. "Competitive markets make for quality installers and service providers, which then lead to lower costs and more demand for solar: a virtuous circle."
"Solid proof of a maturing, lower-cost solar market is welcome news," said Carrie Cullen Hitt, president of the Solar Alliance. "Good policies such as net metering and easy interconnection, combined with meaningful incentives that decline over time, drive demand and ultimately benefit all consumers."
"The explosive growth of the solar energy sector in the U.S. over the past three years clearly demonstrates that it is an economic engine, creating tens of thousands of jobs," said Rhone Resch, president & CEO of the Solar Energy Industries Association. "With the right policies and continued price reductions, solar is poised to lead our economic recovery and contribute significantly to our nation's energy supply."
The report found that the most significant price reductions were achieved in non-module factors such as labor, permitting and balance of systems, which typically account for half of the total installed system cost. Whereas module pricing is almost entirely dictated by global market forces, non-module pricing may be more readily affected by state and local policies. As a result, Tracking the Sun suggests that strong state deployment programs have played an important role in driving down solar costs, by cultivating healthy competition among suppliers and service providers and prompting new supply chain efficiencies.
Tracking the Sun is based on an analysis of nearly 37,000 residential and non-residential PV systems. These systems total 363 megawatts (MW) or 76 percent of all grid-connected PV capacity installed in the U.S. by 2007, making the report the most comprehensive source of PV installed cost data in the United States. With the country's largest PV market, California accounted for 83 percent of the data sample by installed capacity.