Solar Keeps Getting More Efficient, Less Expensive, and More Resilient

November 25, 2019
US Air Force
John Rogers
Energy Campaign Analytic Lead

The latest annual data on US solar energy show how the technology options for residential and commercial customers keep progressing. Here are three important dimensions of that progress: photovoltaic (PV) modules keep getting more efficient, PV system costs keep coming down, and batteries are becoming much more a piece of the solar picture.

The new Tracking the Sun report from the Lawrence Berkeley National Laboratory (LBNL) covers PV systems for homes, businesses, and institutions—the “grid-connected, distributed” piece of the solar story. The data cover systems through 2018, with glimpses of 2019.

And in those data the LBNL researchers found continuing progress in some areas, and some noteworthy new developments in others.

PV modules keep getting more efficient

One finding is that PV module efficiency keep climbing. Median values rose from 12.7% in 2002 to 18.4% in 2018—a 45% increase, much of it in the last decade, and a full percentage-point increase in the last year alone.

Part of that progress is due to the increasing share of more-efficient mono-crystalline technologies (the ones with smooth-looking single-crystal cells). That share rose from 40% in 2016 to 90% in 2018. The progress is also due to general improvements in “manufacturing processes and cell architectures,” says LBNL, for both mono- and poly-crystalline modules (with poly- being the multi-faceted ones).

Note that the bars in the graphic indicate the 20th/80th percentiles, not the full range. Modules are actually available with efficiencies considerably higher. The ones on my own roof from my home installation three years ago, for example, are 22% efficient—off the chart, in this case.

Solar keeps getting cheaper

A second takeaway from the new report is that the impressive price drops in recent years have continued. For residential systems, for example, median prices per watt (W) fell 60% from 2008 to 2018. And for small and large “non-residential” (chiefly commercial or institutional) systems, the price drops were even more pronounced: 68% and 71%, respectively.

While PV module price drops over the years have received a lot of attention, those gains came from progress on a range of fronts, according to the new report. Of the residential system price declines from 2014 better module pricing accounted for 38%. Improved pricing for the inverters, the piece that converts the DC power from the modules to AC for the home and the electricity grid, accounted for another 28%.

The rest of the progress (36% of the drop) came from the other technical components (the “balance of system”, or BoS) and the “soft costs”—all the other things that go into make a system happen, like permitting and installation.

For non-residential systems, BoS and soft costs were even more of a factor over that period: 55% of overall price reductions.

PV systems are getting larger

The lower prices and higher efficiencies have helped fuel another trend that LBNL’s data revealed: Systems are also getting larger.

To be clear, all this doesn’t mean that systems need to get larger—just that maybe they can. A 5-kilowatt (kW) system, the standard for a home system not long ago, still produces just as much as a 5-kW system used to. A system that size just might be that much cheaper. But the price drops also mean that a given solar budget might get you that much more solar.

Economies of scale also come into play: For residential systems LBNL found, for example, that an 8- to 9-kW system in 2018 was on average 12% cheaper than a 4- to 5-kW one.

And the higher efficiencies mean that a given roof area can fit that much more. (I know I maxed out my roof area squeezing every kilowatt of solar I could up there.)

Energy storage is coming on strong

As for resilience… Solar modules have been plenty strong for years. Even early in my solar career manufacturers would say their products would withstand one-inch hailstones. And the warranties for most panels grew to 25 years a while back.

What’s different about now is that energy storage has become a thing, like never before. The data on the leading states show rapidly increasing shares of the annual residential market, in particular, going to systems pairing solar with batteries.

In California and Arizona, for example, just 0.3% of systems installed during 2016 had batteries. In 2018 installations in those states included batteries 4.9% and 3.8% of the time, respectively.

And in Hawaii, LBNL reports, in 2018 “more than 60% of all permits issued for distributed PV on Oahu included storage.”

More to come

The latest report covers just a piece of what’s happening in solar; it analyzes large-scale/utility-scale systems separately. And it focuses on the technology and the economics, not, say, whom solar is reaching. But the happenings in the residential, commercial, and institutional market segments are really important for our move to clean energy.

And with higher efficiencies, lower prices, and more resilience, solar’s getting better all the time.

About the author

More from John

John Rogers is a senior energy analyst at the Union of Concerned Scientists with expertise in clean energy technologies and policies and a focus on solar, wind, and natural gas. He co-managed the UCS-led Energy and Water in a Warming World Initiative, a multi-year program aimed at raising awareness of the energy-water connection, particularly in the context of climate change, and motivating and informing effective low-carbon and low-water energy solutions.