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Deconstructing Solar Photovoltaic Pricing: The Role of Market Structure, Technology and Policy

Publication Type

Report

Date Published

12/2014

Authors

Gillingham, Kenneth, Hao Deng, Ryan H. Wiser, Naïm R. Darghouth, Gregory Nemet, Galen L. Barbose, Varun Rai, Changgui Dong

Abstract

Solar photovoltaic (PV) system prices in the United States display considerable heterogeneity both across geographic locations and within a given location. Such heterogeneity may arise due to state and federal policies, differences in market structure, and other factors that influence demand and costs. This paper examines the relative importance of such factors on equilibrium solar PV system prices in the United States using a detailed dataset of roughly 100,000 recent residential and small commercial installations.

As expected, we find that PV system prices differ based on characteristics of the systems. More interestingly, we find evidence suggesting that search costs and imperfect competition affect solar PV pricing. Installer density substantially

lowers prices, while regions with relatively generous financial incentives for solar PV are associated with higher prices.

Year of Publication

2014

Notes

Lawrence Berkeley National Laboratory hosted a webinar on December 15, 2014 entitled "Variability in Solar PV Pricing: Findings from Berkeley Lab's Academic Partners Program." Click here to view the webinar.