Production of solar photovoltaic equipment is lagging behind demand, leading to the average cost-per-watt for PV installations rising over the last three years. The cost for photovoltaics has generally been getting less expensive over time, but, according to BuildingGreen.com, in the last couple years, it has gone from $6.93 per watt in 2005 to $7.25 in 2006 and $7.62 in 2007.

Although data are not complete, Steven Strong, president of Solar Design Associates in Harvard, Massachusetts, and an expert in building-integrated-PV systems, confirmed the trend. “The industry is under increasing demand,” he told EBN. “Manufacturers are trying to add more production capability but that takes a while to come online.”

Some of this trend reversal may come from countries like Germany and Canada providing feed-in tarriffs that encourage people to install solar photovoltaic systems, leading to increased demand for these systems. Perhaps the increase in demand for all solar photovoltaic systems will lead to lower costs in the longer term. The increase in cost may serve to attract additional investors and help to build further capacity for future production. But, at the moment, the cost is going in the wrong direction for the encouragement of more installation of solar PV systems.

via: BuildingGreen.com

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