Last updated: January 25th 2024
In this article we examine solar panel prices over time. As well as looking at the installed cost of solar panels over time we also look at the trend in the price of solar PV modules - the biggest factor influencing installed costs. All data is from the 2023 edition of Berkley Lab’s Tracking The Sun report.
Are Solar Panels Getting Cheaper?
According to the 2023 edition of Berkely Lab’s Tracking The Sun report the installed price of residential solar panel systems has dropped by 26% over the last decade - from 5.7 $/W in 2013 to 4.2 $/W in 2022. The bulk of this drop has been driven by the fall in the price of solar PV modules over time. The cost of solar PV modules has dropped by a massive 90% since 2000!
KEY STATISTICS (EDITOR PICKS)
- The installed price of residential solar panel systems dropped by 26% over the last decade - from 5.7 $/W in 2013 to 4.2 $/W in 2022.
- Solar PV module prices dropped by 51% over the last decade - from 0.99 $/W in 2013 to 0.49 $/W in 2022.
- Since 2000 solar PV module prices have dropped by a massive 90%.
Price Per Watt
Price per watt is a useful unit of measurement when comparing the cost of solar energy. It can be used to compare the installed price of solar panel systems and to compare the price of component solar panel modules.
In the context of installed price then Price per watt (PPW) is the price paid for every watt of solar capacity installed i.e. including installation costs.
When applied to the cost of solar panel modules then Price per watt is the price paid for every watt output that the module can produce.
The Installed Cost of Solar Panels Over Time
Berkely Lab’s Tracking The Sun report (2023) reveals that over the last decade there’s been a 26% drop in the installed cost of solar panel systems. In 2013 the median installed price of a residential solar panel system (US) was 5.7 $/W. In 2022 the median was 4.2 $/W.
Year | Median installed price of a residential |
2000 | $13.77 |
2001 | $13.34 |
2002 | $13.63 |
2003 | $12.45 |
2004 | $11.63 |
2005 | $11.14 |
2006 | $11.30 |
2007 | $11.38 |
2008 | $10.83 |
2009 | $10.34 |
2010 | $8.89 |
Year | Median installed price of a residential |
2011 | $7.86 |
2012 | $6.64 |
2013 | $5.68 |
2014 | $5.20 |
2015 | $5.06 |
2016 | $4.86 |
2017 | $4.62 |
2018 | $4.37 |
2019 | $4.32 |
2020 | $4.36 |
2021 | $4.28 |
2022 | $4.17 |
To understand the drop in ‘installed price’ it is helpful to get more granular and split this into the main price components:
- Solar PV Module Cost
The cost of the solar PV panels. - Inverter Cost
The cost of the inverter - the component in the system that converts the DC electricity captured by the solar panels, into AC. - Balance of System (BoS) Costs
Additional hardware costs such as structural and electrical components. - Soft Costs
The cost of labour and other operating costs.
Balance of System and Soft Costs are around 80% of total system costs. Solar PV Module Costs are around 15% and Inverter costs 5%.
Over time there has only been a slight fall in Balance of System Costs, Soft Costs and Inverter Costs. However, there’s been a big fall in the cost of Solar PV Modules and that has driven the fall in the installed price of residential solar panel systems
The Price of Solar PV Modules Over Time
Data from Berkley Lab’s Tracking The Sun report (2023) shows that the price of solar PV modules has seen a 51% drop over the last decade.
In 2013 the median cost of the solar PV modules used in residential systems was 0.99 $/W. In 2022 the median was 0.49 $/W. The cost of solar PV modules has dropped by a massive 90% since 2000.
Year | Median price of |
2000 | $5.07 |
2001 | $4.75 |
2002 | $4.86 |
2003 | $4.58 |
2004 | $4.88 |
2005 | $4.93 |
2006 | $5.34 |
2007 | $5.36 |
2008 | $4.80 |
2009 | $3.23 |
2010 | $2.29 |
Year | Median price of |
2011 | $1.57 |
2012 | $1.03 |
2013 | $0.99 |
2014 | $0.90 |
2015 | $0.80 |
2016 | $0.60 |
2017 | $0.51 |
2018 | $0.62 |
2019 | $0.47 |
2020 | $0.44 |
2021 | $0.53 |
2022 | $0.49 |
Will the Cost of Installing Solar Panels Continue to Fall?
To date, the fall in the cost of installing solar panels has been driven by a big fall in solar PV module prices over time.
Though solar PV module prices are likely to continue to fall in line with Swansons Law, they’ve already fallen to 0.49 $/W and only make up 15% of the installation cost of solar panels.
As we move forward any further significant drops in cost would need to come from one of the other price components.
Historically however, Inverter Costs, Balance of System Costs and Soft Costs have not fallen much over time. Therefore, we may be approaching a time when the cost of installing solar panels starts to level out.
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