Recent Installed Price Reductions Have Been Driven Primarily by Declines in Soft Costs.
A period of rapidly falling installed prices began in 2009, prompted by a steep drop in global prices for PV modules. Since 2012, however, module prices have remained relatively flat, while installed prices have continued to fall as a result of continuing reductions in the variety of other, non-module costs.
Reductions in inverter and racking equipment costs constitute roughly 20% of the drop in non-module costs for residential systems in recent years. Much of the remainder can be attributed to reductions in the aggregate set of “ soft ” costs, which have fallen partly as a result of increases in system size and module efficiency, though also because of a broader array of efforts within the industry and among policymakers to target soft costs.