Solar PV prices will fall below $US1.00 per watt by 2020

GTM Research estimates the price for a utility-scale fixed-tilt ground-mount PV system to hover around $1.25 per watt today. Modules represent half of the cost, additional hardware such as inverters and balance-of-system components represent 22 percent, and the remaining 28 percent is made up of soft costs.

The report notes that soft costs present the both biggest opportunity, but also the largest hurdle for future cost reductions, particularly in the residential and commercial market segments where prices are much higher than in the utility-scale segments.

Residential PV prices in the U.S. average $3.00 as of the first half of this year. According to the report, soft costs make up 64 percent of residential system costs today, and despite system prices falling by a third by 2020, soft costs will still account for 60 percent of the total system price.

Average U.S. commercial solar prices just dipped below $2 per watt, but the report highlights additional opportunities for further cost reductions.

“Commercial PV installers need to find more ways to shorten the length and de-risk aspects of the project cycle in order to substantially reduce origination and overhead costs,” said Ben Gallagher, GTM Research solar analyst and lead author of the report.

He notes that solar-specific software tools and simplified business modes will also help lower solar costs. GTM Research forecasts U.S. commercial solar pricing to fall 25 percent between 2015 and 2020.