Solar Plus Energy Storage Gains Market Share in Residential Installations in the US

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The median installed prices of solar photovoltaic (PV) systems across most U.S. states dropped year-over-year (YoY), with the residential segment recording average annual declines of up to $0.2/W per year. The non-residential segment recorded a price decline of $0.1-0.3/W per year, in the last five years, according to the Lawrence Berkeley National Laboratory (LBL).

LBL’s report ‘Tracking the Sun’ is based on data from roughly 2.5 million PV systems installed countrywide through 2021, with preliminary data for the first half of 2022.

The report also says the U.S. has seen a drastic rise in PV plus storage installations, with 10% of all new residential PV installations and 5% of all non-residential installations, including battery storage, in 2021.

Residential and non-residential PV system sizes have risen over the past two decades, with the median residential sizes reaching 7 kW with most systems ranging between 4 and 10 kW, while the median non-residential sizes stood at 33 kW in 2021.


National Installed Prices Over Time

The report said that the size of non-residential PV systems also increased, though typical system sizes plateaued in recent years, with the median size in 2021 was 33 kW with 20% of systems in 2021 larger than 150 kW, and an average size of 255 kW.

Of the 66 entities and 30 states contributing to the report, the Berkeley lab projects California to dominate the U.S. market with 3,000 residential PV systems installed in 2021.

In the residential sector, 94% of the installations were PV systems with module-level power electronics (MLPE) comprising microinverters and DC optimizers. The non-residential sector saw 81% MLPE system installations in 2021.

Median installed prices in the country have dropped by roughly $0.4/W per year on average, but price declines have gradually narrowed since 2013, after which price declines averaged $0.1-0.2/W across segments.

The narrowing of price is primarily a function of the underlying module-cost trajectory but also reflects growing customer acquisition costs, among other costs embedded in the residual balance of system (BoS) and soft costs.

The report notes that persistent supply chain constraints continue to mount pressure on prices but are partly absorbed under the inflation adjustment of the pricing data into real dollar terms. Median installed prices for standalone PV systems dropped by ₵10-20/watt, from 2020-2021, across residential and non-residential customer classes. Median prices for residential and non-residential projects increased in 1H 2022 in nominal terms.

Module efficiency

The report said module efficiencies have also risen, wherein the median module efficiencies among residential and non-residential systems increased from 13.6% in 2022 to 20.1% in 2021. The efficiency improvement is attributed to the market share of monocrystalline modules covering 89-98% of the market share in 2021, depending on the segment.

The increased use of mono-passivated emitter rear-cell (PERC) technology is also one of the factors for enhanced module efficiencies. In 2021, most PV systems installed had 19% to 21% efficiencies.

After the winter storm Uri that hit Texas in February 2021, there was an uptick in PV+storage adoption as new interconnections surged by more than three times in CenterPoint’s service territory (from roughly 300 to 1,000) and by six times in Oncor’s service territory (from 200 to 1,300).

PV+Storage

The U.S. has seen a drastic rise in PV and storage attachments, with 10% of all new residential PV installations and 5% of all non-residential installations, including battery storage, in 2021. Hawaii’s residential PV+storage attachment rate is 93%, and 59% in the non-residential segment. California, which hosts most paired systems, has attachment rates of 11% in residential and 5% in the non-residential segment.

The storage sizes for paired residential systems also increased in 2021, reflecting the growing demand for backup power, with 42% of all paired residential installs consisting of at least 10 kW battery storage per PV unit.

Installed Price Comparison Standalone vs Paired PV

Among standalone PV systems without storage, installed prices vary by almost $2/W between the 20th and 80th percentile values for residential and small non-residential customers and roughly $1.5/W for large non-residential customers.

In paired residential projects installed in 2021, average storage costs were roughly $1,200/kWh of storage capacity, equating to an additional $1.9/W of PV. In comparison, median costs for a similar size of residential storage systems funded through California’s Self Generation Incentive Program (SGIP) were $1,149/kWh in 2021.

Earlier this month, U.S.-based module maker First Solar announced the allocation of $1.2 billion to ramp up the production of American-made, responsibly produced photovoltaic solar modules totaling 4.4 GW to support the nation’s decarbonization drive until 2025.