Analyzing historical cost trends in California's market for customer‐sited photovoltaics

Abstract

AbstractThis paper reports highlights from a detailed statistical analysis of the cost of customer‐sited, grid‐connected photovoltaic installations in the largest solar market in the United States: California. It is based on an analysis of 18 942 PV systems, totaling 254 MWAC, either funded or approved for funding under two separate rebate programs overseen by the California Energy Commission and the California Public Utilities Commission. We find that: (1) solar costs have declined substantially over time; (2) policy incentives have impacted pre‐rebate installed costs, and some cost inflation is apparent; (3) economies of scale have driven down costs for larger systems; (4) systems installed in new home developments and in affordable housing projects have experienced much lower costs than the general retrofit market; and (5) installer experience and type have affected costs, but the effects differ by program. Results hold important implications for solar suppliers and customers, and for policymakers designing incentive programs. Copyright © 2006 John Wiley & Sons, Ltd.