The median installed price of solar photovoltaics has dropped by 25 percent to 35 percent over the past three years, according to a study published by the Lawrence Berkeley National Laboratory in November 2012. The cost for solar electricity dropped by $2.1 per watt from 2008 through 2011, according to Lawrence Berkeley National Labs.
The study, which includes preliminary data for 2012, included data based on more than 150,000 individual residential, commercial and utility-scale photovoltaic systems, totaling more than 3,000 megawatts and representing 76 percent of all grid-connected photovoltaic capacity in the U.S.
According to the study, the median installed price in 2011 was $6.1 per watt for systems less than 10 kilowatts in size; $5.6 per watt for systems between 10 and 100 kilowatts in size; and $4.9 per watt for systems offering than 100 kilowatts. Prices for 2012 are not yet available. But partial data for the first six months of 2012 indicate that prices continue to fall, with the median installed price of projects last year 3 percent to 7 percent cheaper than in 2011.
The installed price of solar power has dropped even more in states such as Massachusetts, where incentives for renewable energy have placed the state ahead of the rest of the country in solar deployments.
According to the Lawrence Berkeley Lab study, the market for photovoltaic power in the United States is, to a significant extent, driven by national, state, and local government incentives, including up-front cash rebates, production-based incentives, renewables portfolio standards and federal and state tax benefits. For example, the price for solar power deployments in Massachusetts now costs on average of $4 per watt, down from $12 in 1998, according to Carrie Cullen Hitt, senior vice president of state affairs for the Washington-based SEIA.
While Massachusetts is ranked 44th in size among the other 50 states, the Bay State is ninth in solar energy deployment, mostly due to aggressive state government incentive programs. To date, Massachusetts corporations have deployed 200 megawatts of solar power and utilities have deployed another 50 megawatts, according to Hitt. Yet, solar power still only makes up about 1.5 percent of the state's 13,000 megawatts of power generation.
At the federal level, the IRS's Investment Tax Credit (ITC) is still considered the big dog among incentive programs for using renewable energy. While not specific to renewable energy, the ITC offers companies a 30 percent tax credit for renewable power investments.
Just seven years ago, deploying a one-megawatt solar array was considered a huge accomplishment. Companies today, however, are regularly deploying systems that 100 times larger, according to the Shugar. For example, Apple last year completed a 100-megawatt solar farm for its North Carolina data center. A fuel cell facility capable of storing five megawatts of electricity will support the solar farms. At full capacity, Apple's data center will draw about 20 megawatts of power.
"While we'll produce 60 percent of the power used by our Maiden data center onsite, we'll meet the remaining 40 percent of our energy needs by directly purchasing clean, renewable energy generated by local and regional sources," said Apple spokesman Nick Leahy.