Once again, the Lawrence Berkeley National Laboratory (LBNL) has published its annual Tracking the Sun report, the most thorough analysis of trends in the solar business. The data for this year covers solar installations made across 30 states, which by the end of 2020 accounted for roughly 79% of all solar installations made nationwide. 

Pricing trends for solar.

Let’s get right to it. The cost of solar panel installations is the question that most people have. The median installed cost of solar systems in 2020 was close to $3.80 per watt, which was the exact cost mentioned in the study from the previous year.

According to our experience, solar energy is not at all expensive. As an average cost to build solar systems, we tilt more toward $3.00 per watt. Then why is the median price for LBNL so high?

Much of it has to do with the data sources and the analysis techniques employed. Systems bought with loans typically have a higher price-per-watt than solar systems purchased with cash because of various financial factors. These systems are also included in LBNL’s pricing.

Is the cost of solar energy declining?

Solar energy is now significantly cheaper than in 2000, when it cost $12.30 per watt (the price in the article today). Over 20 years that represents a price decrease of nearly 70%. 

Prices were falling quickly during that first decade, primarily due to developments in science and production that reduced the cost of solar equipment. The rate at which solar prices were falling began to decelerate in 2010, primarily because equipment technology had started to level off and soft costs (things like installation labor, client acquisition, and permitting) had remained constant. But despite this, prices kept declining year after year.

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