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NREL:U.S. Solar Photovoltaic System Cost Benchmark: Q1 2016

NREL:U.S. Solar Photovoltaic System Cost Benchmark: Q1 2016


This report benchmarks U.S. solar photovoltaic (PV) system installed costs as of the first quarter of 2016 (Q1 2016). We use a bottom-up methodology, accounting for all system and projectdevelopment costs incurred during the installation, to model the costs for residential, commercial, and utility-scale systems. In general, we attempt to model the typical installation techniques and business operations from an installed-cost perspective. Costs are represented from the perspective of the developer/installer; thus, all hardware costs represent the price at which components are purchased by the developer/installer. Importantly, the benchmark this year (2016) also represents the sales price paid to the installer; therefore, it includes profit in the cost of the hardware, 1 and the profit the installer/developer receives, as a separate cost category. However, it does not include any additional net profit, such as a developer fee or price gross-up, which are common in the marketplace. We adopt this approach owing to the wide variation in developer profits in all three sectors, where project pricing is highly dependent on region and project specifics such as local retail electricity rate structures, local rebate and incentive structures, competitive environment, and overall project or deal structures. Finally, our benchmarks are national averages weighted by state installed capacities. Table ES-1 summarizes benchmark assumptions as well as comparisons of previous National Renewable Energy Laboratory (NREL) benchmarking efforts (2009–2015) and the benchmarking in this report.

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