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Solar Soft Costs

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The cost to install a solar photovoltaic (PV) system includes two broad cost categories: hardware costs and soft costs.

  • 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.

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