Published On: Wed, Feb 1st, 2012

Solar energy’s future, how fast are prices dropping?

solar panels on house roof
(Healingtalks) 
Our planet is being graced with enough solar energy to fuel all our needs.

The sole question that remains is how quickly can we harvest this energy economically.

How fast are prices dropping

Over the last 30 years, we have seen solar energy prices drop dramatically. The National Renewable Energy Laboratory of the U.S. Department of Energy has reported solar photovoltaic price trends since 1980. Their records show that the price per Watt of solar modules has dropped, on average, from $22 to under $3 in the last 30 years.  But you can find even better prices. A quick look on the Internet shows prices for as little as $1.08 a watt . Conserving energy, if a home were to use 10,000 kWh per person. The same company sells a get-off-the-grid complete system for $11,000 and producing approximately 4500 kilowatts annually. This is half of what we commonly saw a few years ago.

 

What is causing this drop in prices

Solar cell manufacturers have been lowering their production costs while the solar cells themselves have become more efficient.  Many more cells are coming from China where labor is cheaper and government subsidies are ample. Also efficiencies now range from 20-40%,  which are far above the levels of decades ago.

Explosive rise of the industry

As prices are falling, the solar industry has explosively expanded. Between just 2006 and 2011 the demand for solar installations has increased eight-fold. While distributors and installers are doing well, manufacturers are struggling to survive amid a highly competitive international market, and with China undercutting most manufacturers.

Great future solar projections

Given present trends, by 2030, a conservative projection is that PV cells should cost around 50 cents a watt. First Solar already claims  internal production costs of 75 cents per watt. It expects to reach 50 cents per watt by 2016.

Factor in solar installation costs

Usually adding in the cost of installation results in a total cost of about twice that of the solar panels themselves. Installation costs have also dropped to maintain this ratio. With this knowledge, we then can calculate the cost of a solar system to produce so many kilowatts over its useful life. With that in mind, it is projected that in and around the year 2018, given a modest rise in conventional electricity prices, the cost of solar installations will be competitive without subsidies. So sunnier climates, this may happen in 2015 or just a few years pending.

A “sunny solar future”

Add another 10 years to our projections, and solar will cost 1/2 of what coal electricity does today. This is why it also makes little sense to develop dangerous nuclear generators of electricity. With mass production, prices can fall even more. Being dependent on a grid and that uses coal to produce the electricity, with carbon emissions, will become a matter of history.

So finally there is some great and “sunny news” about where our world is headed.

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Delaphney says:

I feel like I’ve read this exact article somewhere else before. Ah yeah sci american, you just copied the whole thing..  http://blogs.scientificamerican.com/guest-blog/2011/03/16/smaller-cheaper-faster-does-moores-law-apply-to-solar-cells/

Brian says:

I have always hoped solar energy can be a supplement to our energy needs.   I remember watching commentary of 60 minutes when they were modeling a spray solar panel that goes on a specific platform.  There are so many unique opportunities for energy efficiency and saving money.  I hope this becomes the norm sooner rather than later.

great post!

-Brian
http://www.progressivetransformation.blogspot.com

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