New research from Wood Mackenzie (WoodMac) shows that solar photovoltaic (PV) system costs in the US are dropping faster than expected despite the COVID-19 pandemic, but the industry will have to find ways to reduce soft costs in the future.
As shown in the table below, the anticipated decline in 2020-2025 in the cost of solar PV systems using mono PERC modules concerns all market segments -- residential, commercial and industrial (C&I) and utility.
|2020-2025 mono PERC system price drop forecast
“Residential projects have more exposure to the impact of the coronavirus due to their shorter project cycles. While there is near term risk for price increases for larger C&I and utility scale projects, overall 2020 system costs are not expected to be significantly impacted by the coronavirus in these segments,” said Cox.
This year the cost of systems using bifacial modules, which are currently exempt from Section 201 tariffs, will be around 1% below the cost of monofacial mono PERC systems. That is solely because of the tariff exemption, says research analyst Molly Cox.
WoodMac notes that engineering, procurement and construction (EPC) firms and developers will increasingly look for ways to cut the currently high customer acquisition, permitting and inspection costs, as hardware costs are seen to decrease at a slower pace over the next decade.
Because of the planned Investment Tax Credit (ITC) reduction to 26% in 2020, all market segments are expected to experience further downward price pressure, but thanks to the fact that sector companies have been preparing for that, drastic changes to system prices are not projected.
“As the solar industry faces demand destruction in 2020 from coronavirus impact, we expect demand to pick back up again by the end of the year and before the ITC steps down again in 2021,” Cox adds.
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