German Solar Installations Coming In at $2.24 per Watt Installed, US at $4.44

What steps can the U.S. take to keep up with the Johanneses?

According to the BSW, average German system prices in the second quarter of 2012 were estimated at EUR1.776 per watt peak, or $2.24 per watt peak at current exchange rates. Since Germany is dominated by rooftop systems (72 percent of installations in 2011), this is an impressively low number. Assuming a module price of around $0.90 per watt peak, this implies an average balance of system cost of $1.34 per watt peak.

Title: "Solar Energy Systems since 2006 are 65% cheaper" Inside Text: "Average price for rooftop installations up to 100 kW"

GTM Research is currently estimating 2012 installations in Germany to come in at around 6.5 gigawatts, compared to 7.5 gigawatts in 2011.

On the other hand — as just detailed in GTM Research’s U.S. Solar Market Insight — the U.S. average system price was $4.44 per watt in the first quarter of 2011.

Residential system prices fell by 4.8 percent from Q4 2011 to Q1 2012, with the national average installed price falling from $6.18 per watt to $5.89 per watt. Non-residential system prices fell by 6 percent quarter to quarter, from $4.92 per watt to $4.63 per watt. Utility system prices declined for the eighth consecutive quarter in a row, dropping from $3.20 per watt in Q4 2011 to $2.90 per watt in Q1 2012.

This is an enormous discrepancy in the average price per watt in Germany versus the U.S.

Assuming the module and inverter pricing is roughly the same for both countries, the culprit for the high prices in the U.S. lies in the soft costs of permitting and financing, as well as in the engineering, procurement, and construction (EPC) process. Add in the potential increase in module pricing due to the China trade tariffs, and the U.S. market faces some headwinds in driving down the cost of solar.

Full Article at Green Tech Media


  1. Gary Wolf says:

    Shows what volume buying and a sustained effort to build a renewable energy economy can do. There may be other differences between Germany and the U.S. solar industries that lead to much lower prices there, but I’d identify two: the government support for installing solar and the workforce development it takes to have the trained labor to install at a lower cost. There are relatively few solar workers in Tennessee, and those we have need more experience to get better and faster. And that’s because there’s no energy policy in Tennessee, no installation program to foster the two keys: lower equipment prices thanks to volume, and the workforce it would take to intall that volume.

    • Gary Wolf says:

      P.S. It’s worth noting that some solar in Tennessee is being installed at costs less than the U.S. average, though I imagine some is being installed at above-average prices, too.

    • SPartin says:

      Good thoughts Gary. I think you are correct, but I would also add permitting costs and interconnection costs are significantly higher in the U.S. These are simple policy problems that already have model policy available (Solar ABC’s, other states, etc.) to be adopted by TN.

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