Solar systems cost about half today what they did a year ago because of a saturated polysilicon market and a glut of panels entering the market from a crowded field of solar manufacturers expanding manufacturing to compete for market share.
Solar PV systems sell for about $2 a watt, down from $4.20 in 2008, and solar thin-film sells for about $1.50 a watt from First Solar, the low cost producer.
How else can solar companies reduce the price of solar systems for customers? Some are turning to installation costs, now that manufacturing efficiencies are hitting limits.
That means the installation costs of solar systems comprise a greater proportion of the overall cost to customers.
Installation costs could drop 5-15% next year, said executives from Suntech, Solon and Akeena at the Solar Power International conference. Akeena Solar (Nasdaq: AKNS) says its goal is to cut installation costs by over 50% in 2010.
Akeena says its new Andalay panels have built-in micro-inverters - they replace having to install a separate unit to convert DC into AC current.
Companies are also looking at a combination of many small changes that can added during the manufacturing phase to simplify intallation, such as pre-drilled holes and quick fasteners.
"We almost used to pride ourselves on all the custom work we did. But it's too expensive. We need to be able to compete with the retail price of electricity," Mike Hall, Borrego Solar CEO told Reuters.
