Letting the Sun Shine on Solar Costs: An Empirical Investigation of Photovoltaic Cost Trends in California

This paper summarizes a detailed statistical analysis of the cost of customer-sited, grid-connected solar photovoltaic (PV) installations in the largest solar market in the United States: California. 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, module type, and system location have all affected costs, but the effects differ by program. Results hold important implications for solar suppliers and customers, and for policymakers designing incentive programs.