The costs of solar panels have steadily decreased over the last few years. The costs of the installation itself have pretty much stayed the same. The Department of Energy has now launched a $10 million prize in an effort to lower installation costs, which are taking up an increasing amount of the total costs of residential solar power. In fact, “soft-costs”, which basically covers everything apart from hardware, is now the largest portion of today`s residential solar panel costs.

The top three solar installers that repeatedly can demonstrate that they have the capability to install solar for as little as $1 per watt (non-hardware costs) for small-scale photovoltaic (PV) systems on American homes and businesses will be declared winners of the SunShot Prize.

In order to be eligible for the prize, the solar installers will have to install 5,000 solar systems with average “soft-costs” of not more than $1 per watt, and then another 1,000 to prove that their business is sustainable. The first team to complete this task will receive $7 million, second place will receive $2 million, and third place will receive $1 million.

The prize is a smart way to bringing down the installation costs of solar panels and if successful would be transformational to the U.S. market.