Residential solar prices drop as size of installations grow and more batteries are added
Energize Weekly, September 4, 2024
The size of residential solar systems has been rising as solar module efficiency increases and solar panel costs decline, according to the Lawrence Berkeley National Laboratory’s annual Tracking the Sun report.
Generating capacity for individual residential solar arrays has steadily grown over the past two decades, reaching a median of 7.4 kilowatts in 2023, the report said.
System size has “grown in lock-step” with the growing generating efficiency of photovoltaic (PV) solar modules. The efficiency of residential solar arrays since 2010 has increased 47 percent, while module efficiency is up 43 percent.
Among residential systems, median module efficiencies rose to 20.8 percent in 2023 from 12.7 percent in 2002, the earliest year with detailed data.
Another measure of the increased power of the residential installations is that their size has remained relatively constant. The percentage of a home roof needed to accommodate a solar array between 2010 and 2023 rose only slightly to an average of about 26 percent, even as generating capacity grew.
“Higher module efficiencies allow for more PV capacity, as residential systems are often space-constrained due to shading, obstructions, and mixed roof orientations,” the report said.
The median installed price for residential systems in 2023 fell year-over-year by roughly 1 cent to $4.20 a watt in inflation-adjusted terms. That is the same rate of decline seen over the last decade. In 2000, the price was $15 a watt.
Most residential solar arrays are installed on detached single-family homes. Non-residential systems, by comparison, were located on a wide array of properties.
In 2023, half of the non-residential systems were installed on commercial properties – including stores, offices, warehouses and industrial facilities – and a third on agricultural properties. Another 15 percent were located on public buildings ranging from schools to government offices to churches.
The size of these non-residential systems is more varied than for home arrays with a median size of 26 kW in 2023. Schools and government properties tend to have the largest systems.
Combining batteries with solar installations is growing, the report said. In 2023, 12 percent of all new residential PV installations and 8 percent of all non-residential installations included battery storage.
In Hawaii, 95 percent of new residential systems included a battery. and 88 percent of non-residential systems had batteries in 2023. In California, 14 percent of 2023 PV projects included storage.
Most of the California systems were installed under the state’s legacy net metering rates, which paid more generously for electricity put on the grid by residential systems. The new net billing tariff incentivizes home storage, and by the end of the year, 60 percent of projects included batteries.
Rates for solar plus battery systems in most other states ranged from 4 percent to 10 percent in 2023.
“The residential market had been trending toward systems with larger amounts of storage capacity, potentially driven by backup power demand, but reversed course the past several years as the market became more geographically diversified,” the report said.
“In 2023, 70 percent of all new paired PV and storage systems included just a single battery with 10-13.5 kWh of energy storage capacity and a 5-kW rated power output.”
