Rapid module price declines have drastically lowered PV systems prices in H2 in US

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According to GTM Research’s latest report, the U.S. PV Price Brief H2 2016, pricing for fixed-tilt ground-mount PV systems fell 17 percent in the past 6 months. Prices for residential PV systems fell 8.6 percent in the same time period. This new report breaks down U.S. residential, commercial and ground-mount PV pricing across 11 distinct hard and soft cost categories. Furthermore, it identifies areas for cost reductions and details pricing across five U.S. regions.

Due to a global supply and demand imbalance, pricing for modules has declined rapidly. From the first half of 2016 module pricing has fallen by 33.8% pushing down systems pricing for all market segments. As modules make up a greater portion of utility system price than residential or commercial, changes in the module market disproportionally impact overall utility systems pricing.

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As such, the price drops in the utility market are the greatest – 17.4% for fixed-tilt and 14.9% for single-axis tracking. Modules are not the sole driver for the 17.4% and 14.9% change in fixed-tilt and tracking; aggressive market entrants in the inverter and racking markets are also pushing prices down rapidly.

Customer acquisition costs remain a pain point, but hardware cost fall rapidly. While customer acquisition costs grew by 10% in the second half of the year, overall systems still saw a 8.6% decrease in pricing. Various stakeholders have criticized the comparatively slower residential soft cost reduction- drops in hardware costs, will allow installers extra breathing room to address these costs on their own timeframe.

Almost all of the pricing change in the commercial market came from modules. In H2, of the $0.232/Wdc drop in systems pricing all but $0.014/Wdc came from modules. This speaks to the persistent challenge of soft costs in the commercial PV market.

Throughout each market segment, non-installation labor soft costs grow as a portion of total systems price. Due to rising residential customer acquisition costs, non-installation soft costs rise across all market segments. However, on average labor costs in each market segment has decreased by at least $0.01/Wdc from H1 to H2 2016.

Source: GTM Research