Costs fall faster than expected

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Solar modules are becoming rapidly cheaper due to the enormous competitive pressure on the market. Now, prices of the other solar plant components are also set to fall. It appears that the photovoltaic sector may reach its cost objectives considerably faster than anticipated.

How much does a photovoltaic (PV) system cost? Up until now, this question could be answered relatively simply with the aid of a basic formula: Module price per Watt plus EUR 1 per Watt plus system costs for inverters, frames etc. Module prices can be found on the Internet with ease. In December, the PV trade portal pvXchange issued wholesale prices of barely EUR 0.90 per Watt for crystalline modules produced in China, which according to the formula would mean: A solar system with these panels could be purchased and fully installed for EUR 1.90 per Watt on home soil.

This is an offer which may even be bettered once again in the near future, as prices of solar modules are plummeting fast. At the beginning of the year, German manufacturers still sold their goods at an average price of EUR 1.70 per Watt, China's rate was even lower at EUR 1.47. Since then, producers have reduced their prices by more than one third. Even more shocking is the industry's performance if we look back to the year 2009. Back then, a PV system could still be purchased for EUR 4, on average. This means that prices have fallen by more than 50% in only three years.

Therefore, average PV prices are falling much faster than anticipated. In 2010, the Bundesverband Solarwirtschaft [German Solar Industry Association] still stipulated in its roadmap for the German solar industry that it intended to maintain its system prices at an average price of EUR 1.40 until 2020. This hypothesis is much too conservative and has been out of tune with reality for a long time. "Already in 2012, systems could be bought for between EUR 1.50 and EUR 1.70 per Watt," explains Dirk Morbitzer, an analyst from the US market research firm Renewable Analytics.