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Solar Installed System Cost Analysis

NREL analyzes the total costs associated with installing photovoltaic (PV) systems for residential rooftop, commercial rooftop, and utility-scale ground-mount systems. This work has grown to include cost models for solar-plus-storage systems.

Four bar charts showing decreasing cost for various types of photovoltaics from 2010 to 2018.

Since 2010, NREL has benchmarked the full cost of PV systems—including installation—for residential, commercial, and utility projects. The results track the ongoing reduction of these costs over time.

NREL's PV cost benchmarking work uses a bottom-up approach. First, analysts create a set of steps required for system installation. Next, they calculate the hardware, equipment, direct labor, and indirect labor costs associated with each step for a given location and system design. Finally, they add in costs associated with permitting, inspection, interconnection, and other overhead.

Four-column diagram showing the process followed by various core cost drivers leading to total capital cost.
NREL's bottom-up cost modeling methodology, shown here for residential PV systems, considers a wide set of factors and many interactions between them.

These bottom-up models capture the impacts of economies of scale, efficiency, location, system design, and company structure on total costs. NREL uses these insights to develop roadmaps for future cost reductions and to provide context for cost variability observed in the market.


Documenting a Decade of PV Cost Declines, NREL Webinar (2021)

U.S Solar Photovoltaic System Cost Benchmark: Q1 2018, NREL Technical Report (2018)

2018 U.S. Utility-Scale Photovoltaics-Plus-Energy Storage System Cost Benchmark, NREL Technical Report (2018)

Find more solar manufacturing cost analysis publications.


Watch this video tutorial to learn how NREL analysts use a bottom-up methodology to model all system and project development costs for different PV systems. It's Part 3 of NREL's Solar Techno-Economic Analysis Tutorials video series.