Residential Solar Report: Costs Down, Installations Up 0

As we near the end of a tumultuous year for solar PV, the latest reportfrom GTM/SEIA indicates there is more momentum that ever for residential solar. A number of factors – the growth in solar leases, the glut in global panel production, and the complex web of economic incentives – have already made this the strongest year in US history for solar PV installations. Much of the buzz around solar has focused on Solyndra and government loan guarantees, or Solar World and Chinese panel dumping. Despite the likely expiration of the highly successful federal 1603 Treasury grant, which has leveraged over $22 billion in private capital, there is much to be excited about looking forward for residential solar.

After two quarters of declining growth, residential installations grew by 21% heading into the final quarter of 2011. Even though this figure lags behind the overall market growth (38%), it is still an indication that the drop in costs of going solar has driven installations among homeowners. The average cost of residential installations has dropped from $6.41/watt to $6.24/watt in the course of less than one year, though residential systems in stronger markets like California and New Jersey dropped to or even below $5/watt.

In these markets, the supply chain is maturing at a faster rate than other areas in the country. Panel and inverter prices have declined as foreign and domestic competition ramps up. Part of this increase in productivity and economic efficiencies is attributed to the anticipated expiration of the 1603 grant, which has driven a lot of large utility scale development that would otherwise not secure financing without the 30% cash grant. As the market continues in its current consolidation phase where smaller manufacturers, distributors, and installers cannot keep up with declining prices, it remains to be seen how some of the larger market players will begin to have a direct effect on the residential market. Though prices didn’t decline, nor installations rise, as drastically as the broader market, residential solar has noticeably benefited from the aforementioned market developments.

Lastly, as this blog has highlighted already, communities and the federal government are teaming up to target the last bottleneck in the process of installing panels: soft costs. To date municipalities and state regulatory bodies have had separate, often redundant and convoluted processes to receive land permits, utility grid connection, and system inspections. Depending on who administers these processes and when, fees for completing these certifications can add up to hundreds, or even thousands of dollars. The Department of Energy, solar advocates and local communities are now leveraging their funding and local resources to streamline these processes and save residential solar customers money.

As the year winds down, there are a number of positive takeaways based on the first 3 quarters. As we look forward to 2012, questions linger regarding the 1603 expiration, the panel dumping case, growth in solar leasing, fluctuations in state SREC markets, and much more.

Original Article on Residential Solar 101

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