Worldwide Solar Costs to Decline Sharply – Feb. 6, 2015

Worldwide Solar Costs to Decline Sharply

Several articles and research reports have recently predicted that installed costs of solar modules will be declining about 40% over the next two years. Average cost of rooftop installations in 2014 was about $2.90 per watt and is expected to reach $1.77 per watt by 2017. Total module costs of the leading Chinese solar companies have decreased from around $1.31 per watt in 2011 to about $.50 per watt in 2014 primarily due the reductions in the cost of polysilicon and the costs of processing. While the cost of polysilicon will not have much affect on future total costs, improvements in inverter prices, component prices, racking costs, production efficiencies, transportation and installation costs will all combine to substantially improve the situation. As prices fall, demand will increase even further. As trade cases and minimum price agreements fall by the wayside and governmental obstacles are eliminated, we should see major expansion of the use of solar systems worldwide and in the U.S. Over the next decade, this should conspire to reduce the pressure on our antiquated distribution grid and make us substantially less vulnerable.

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Don Hammer
Realty Executives Fine Properties