SOLAR EQUIPMENT PRICES continue to fall.

A report by the Lawrence Berkeley National Laboratory in August said that the median price for residential and commercial solar systems installed in 2012 was $5.30 a watt for systems of up to 10 kilowatts in size, $4.90 a watt for systems from 10 to 100 kilowatts and $4.60 a watt for larger systems. Prices fell by another 10% to 15% during the first six months of 2013. These prices are higher than in some other countries. The median prices for residential and commercial solar systems were $2.60 a watt in Germany, $3.10 in Australia and Italy and $4.80 in France.

There is a wide distribution of prices around the median. Twenty percent of US residential and commercial systems were installed in 2012 for less than $4.50 a watt, and 20% cost more than $6.50 a watt. The median prices also varied significantly from one state to the next, with the lowest prices for very small systems of up to 10 kilowatts found in Texas ($3.90 a watt) and the highest in Wisconsin ($5.90 a watt).

Meanwhile, cash rebates that some states and utilities offer as inducements to customers to install solar fell faster in some states than the decline in solar equipment prices, thereby offsetting to a large degree the potential benefit to customers from falling equipment prices. The incentives fell from 2011 to 2012 by 50% to 150% of the decline in equipment price.

Turning to utility-scale projects, the average utility-scale photovoltaic project cost $3.30 a watt for projects with crystalline modules and fixed tilt, $3.60 a watt for projects with tracking, and $3.20 a watt for thin-film projects with fixed tilt. The data sample was 106 projects put in service in 2012. However, there was a wide distribution in prices, from $2.30 to $6.80 a watt.

Larger projects (greater than 10 megawatts) generally ranged in cost from $2.50 to $4 a watt. Smaller utility-scale projects “were clustered within a similar range, but with a sizeable tail to the distribution” with 20% of projects costing more than $4 a watt and several above $5.

A separate paper by the same lab in September reported that electricity prices in a sample of 57 power purchase agreements signed recently by solar developers have continued to fall “to the point where recent PPAs have been priced as aggressively as $50-$60/MWh levelized (in 2012 dollars).” The PPAs studied are all “bundled” PPAs, meaning the utility gets both the electricity and any renewable energy credits for the reported prices.

Solar thermal projects had an early advantage when photovoltaic projects were too expensive to compete, but the table has turned: all recent PPAs in the sample were for PV projects. Solar thermal “was seemingly competitive back in 2010,” the report said, “but the lack of any new contracts since then (at least within the sample) . . . is perhaps telling in its own right.”