The solar industry is one of our most obvious success stories. Our industry directly employs 261,000 people. We generate energy that is both clean and renewable. And we generate this energy at prices that are less than conventional utility power – as low as 6 cents per kwh. But the industry is not resting on its laurels: installation costs for residential solar will continue to decline (BTW, what’s a laurel?).

$1.50 per installed watt was the original target of the SunShot program for residential solar. I think it’s going to take many more years to get to these low installation costs – even getting to $2.00 watt on the average seems almost insurmountable to me. Not because of the hardware costs; these are continuing to decline. But because of the soft costs like labor, sales & marketing, financing and overhead. Nevertheless, $2.50/watt is a target that is within our sites over the next few years.

Please join me on this Week’s Energy Show on Renewable Energy World as I dissect the current cost stack for residential solar installations. We’ll particularly focus on the three most likely ways that these average installation costs will be reduced: higher panel efficiency, less expensive equipment and better component integration. But don’t hold your breath…overhead is more likely to go up than down.