Study Finds Decline in Solar Costs

RALEIGH, NC — For many North Carolina electric utilities, solar PV systems greater than 10 kW with federal and state tax credits were (at grid parity) cost competitive with commercial retail electricity prices in 2011, shows a new study by the North Carolina Sustainable Energy Association (NCSEA). The 32-page report, “Levelized Cost of Solar Photovoltaics in North Carolina,” was released on Wednesday, Feb. 29 by NCSEA’s market intelligence team. The detailed analysis considers multiple scenarios to understand the impact of system capacity, type of electric service provider, system ownership (residential or commercial) and state and federal tax credits. 

The study shows that conventional electricity costs for North Carolina residents and businesses have increased by an annual average of approximately 3 percent over the past decade. All the while, the national trend for the cost of solar photovoltaic (PV) panels and their subcomponents has declined by 37 percent from 2008 to 2010. The installed cost per watt (W) of solar PV in North Carolina has also decreased from $8.50/W to $5.44/W from 2006 to 2011. In all, that is a 36 percent drop in price, making solar power more accessible in our state.

“The cost of solar power has continued to drop making it a more competitive and viable energy resource,” said Carrie Cullen Hitt, vice president of state affairs at the Solar Energy Industries Association — the national trade association of the U.S. solar industry. “As the demand for electricity grows, so does the need for new sources of energy. This is a dynamic time for the solar industry which has the potential to satisfy a good portion of that demand.”

As a result, solar companies have experienced a spike in business allowing them to undertake more projects that create jobs, stimulate the economy and make solar electricity more affordable to a wider variety of consumers. As of Sept. 30, 2011, North Carolina ranked 8th in the U.S. for cumulative installed solar photovoltaic (PV) capacity.  And as of Oct. 31, 2011, there were 1,142 solar PV systems totaling over 128 megawatts (MW DC) of capacity registered with the North Carolina Utilities Commission (NCUC) to be installed in the state between 2006 and 2011. These systems range in capacity from residential systems to one of the largest solar projects on the East Coast located in Davidson County. Driving the growth of solar PV system installations are the declining installation costs and North Carolina's policy environment.

“Solar electricity continues to improve in efficiency and cost as a viable energy resource well into the future,” said Miriam Makhyoun, the study’s primary author and NCSEA’s Solar & Renewable Energy Industry Specialist.

Key findings from the “Levelized Cost of Solar Photovoltaics in North Carolina”

• For many electric utilities, solar PV systems greater than 10 kW with federal and state tax credits were at grid parity (cost competitive with commercial retail electricity prices) in North Carolina in 2011.
• For all North Carolina electric utilities, solar PV systems greater than 500 kW with federal and state tax credits achieve grid parity or become cost competitive with commercial retail electricity prices in 2015.
• For all North Carolina electric utilities, solar PV systems greater than 10 kW through 500 kW with federal and state tax credits achieve grid parity or become cost competitive with commercial retail electricity prices in 2018.
• For the majority of North Carolina electric utilities, solar PV systems 10 kW or less taking federal and state tax credits achieve grid parity or become cost competitive with residential retail electricity prices in 2020.
• For many electric utilities, solar PV without federal and state tax credits will be at grid parity or cost competitive with retail electricity prices in North Carolina in 2020.

Download the complete report here.