Analyzing Historical Cost Trends in California's Market for Customer-Sited Photovoltaics

This 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 MW_AC, 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.