Graphs of the Day: Solar Costs Down Radically
September 27, 2011
Solar power in some markets is already cost-competitive with power from fossil fuels or nuclear energy. It’s expected to take over more and more markets in the very near future as its costs continue to decline and the costs of other antiquated energy sources continue to rise.
Nuclear, coal, even natural gas — even if you don’t take into account externalities (public health, environmental, and national security externalities that you really should take into account), probably won’t be competitive with solar soon (marking important crossovers in the history of our planet).
Notice in the first chart how steadily manufacturing costs have come down, from $60 a watt in the mid-1970’s to $1.50 today. People often point to a “Moore’s Law” in solar – meaning that for every cumulative doubling of manufacturing capacity, costs fall 20%. In solar PV manufacturing, costs have fallen about 18% for every doubling of production. “It holds up very closely,” says Solaria’s Shugar.
The “Moore’s Law” analogy doesn’t necessarily work on the installation side, as you have all kinds of variables in permitting, financing and hardware costs. But with incredible advances in web-based tools to make sales and permitting easier; new sophisticated racking, wiring and inverter technologies to make installation faster and cheaper; and all kinds of innovative businesses providing point-of-sale financing (think auto sales), costs on the installation side have fallen steadily as well. The Rocky Mountain Institute projects that these costs will fall by 50% in the next five years.
So what does all this mean? It means that the notion that “solar is too expensive” doesn’t hold up anymore. When financing providers can offer a home or business owner solar electricity for less than the cost of their current services; when utilities start investing in solar themselves to reduce operating costs; and when the technology starts moving into the range of new nuclear and new coal, it’s impossible to ignore.
According to SunPower’s Tom Dinwoodie: “The cross-over has occurred.”
The original article is a must-read – there’s lots more detail, but the basic message is, we’re turning the corner now, not 5 years from now.
Tea Partiers, denialists and dittoheads will find these graphs disappointing. The rape of planet earth no longer pays. But for the rest of us, it’s good news that what makes environmental sense, also makes economic sense.