The hard costs of solar have gone down and soft costs have been a source of concern.

  • Hardware costs include all the materials needed to construct the system: module, inverter, racking, and electrical wiring.
  • Soft costs include the cost of installation labor, the cost of all relevant permits, and all overhead costs including the marketing, sales and administrative costs associated with the system.

“While the total cost of residential PV systems has declined by more than 65% over the last decade, hardware costs have fallen much faster than soft costs. Therefore, the soft cost share of total residential system cost has risen from 58% of total system cost in 2014 to 65% today. A primary factor driving this increase is direct and indirect costs associated with permitting and inspection.”  (SEIA)

Talking mostly residential solar here, though soft costs for utilities have similar components.

Hooray for technology and research. Not so much on government costs. “Variations in local permitting and regulatory procedures can result in price differences of $3,200 to $4,700 for a typical 5-kilowatt residential solar installation.” (Source)

Interesting paradox in all this. A New York Times report just recently said that, “The home solar business is growing fast as thousands of homeowners install panels on their roofs to save money. Yet the biggest companies that install and finance home solar systems are reporting hundreds of millions of dollars in losses.”

Elements of buying and installing a solar system are diverse. Check the chart.

A final word: Evaluating and possibly adding a solar panel system to a home requires extraordinary care. Here’s one news report that notes some of the issues homeowners need to think about. Do your homework and do not go-it-alone.


Images from the US Department of Energy – “Soft Costs 101.