Graphs of the Day: Solar Costs Down Radically

September 27, 2011

From Clean Technica:

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.

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8 Responses to “Graphs of the Day: Solar Costs Down Radically”

  1. David Oertel Says:

    From a moral standpoint, solar is a no-brainer when you consider oil wars, mountain-top removal, Fukushima, fracking, …


  2. I’m a bit wary of your claim that solar PV has reached grid parity already. I’ll certainly agree that, in a properly functioning free market — one in which externalities were properly accounted for — solar PV would easily have reached grid parity by now. But I’ve been researching this topic for the last few days (for another project) and I’m getting numbers all over the map. I am very wary of any number from anybody who has a financial or political interest in the issue — and most of the numbers come from such sources, which is why they’re so scattered. My overall impression is that we’re close to grid parity in the Southwest, and will need five years — possibly ten — to achieve grid parity in most of the northern areas of the USA.

    In any case, I’m quibbling; whether it happens in 2011 or 2015 is not terribly important in the grand scheme of things. What *is* important is that grid parity is inevitable and soon.

    There will, of course, be many other issues to deal with as solar grows exponentially from its tiny installed base. Capital intensity — a problem that always worried me about nuclear — is a major problem with solar PV. And believe it or not, somebody once calculated that if we installed a lot of rooftop solar capacity, we’d have a significant number of casualties due to people falling off roofs while cleaning their solar arrays. (I’m offering this point for laughs only — I don’t think it’s a serious argument against solar.)

    • greenman3610 Says:

      I think the point is that a nuclear or coal project started now, with the long lead times that they have, would be completed certainly at beyond the point where solar is clearly more competitive.
      the task is to create an electrical grid that is smart enough to use energy from distributed sources.

      • sinchiroca Says:

        (I am Chris Crawford — I finally got a WordPress account so that I can properly reply to posts)

        That’s a good point. As you observe, at this point the only impediment is the creation of a proper grid for supply averaging. Right now our grid uses voltages too low to permit good averaging out of the intermittency of solar and wind. We need to build a national grid of HVDC lines, and that will almost certainly require state or Federal involvement, because we’re right at the bottom of the network effects curve. That’s why the initiative in Kansas is so important — it will help get the ball rolling. We need more initiatives like that.

        Whatever happens, we’ll still need some big thermal plants for base loads, and I’d really like to see those coal plants retired ASAP, so I believe that there’s still a place for nuclear, but perhaps we can squeak through by merely extending the life of existing plants. There’s a bad geographical mismatch here. My guess, however, is that politics will keep the coal plants burning long into the future. Sigh.

  3. otter17 Says:

    Stronger, consistent subsidies or feed-in tariffs would help too.

  4. sinchiroca Says:

    Peter, I know that you’re developing a new video on nuclear, focusing on the cost issue, and I just ran across a very good page presenting a solid, fairly balanced analysis of a few of the issues:

    http://www.climatespectator.com.au/commentary/solar-vs-nuclear-clash-numbers

    It also links to a pro-solar study that you might appreciate.

    Hope this helps.

    • greenman3610 Says:

      there will be a nuclear video, but probably not till winter. that’s a valuable link though, thanks – keep me updated when you see something.

  5. maidulva Says:

    Solar panels are now a global product.what you probably really need to know is how much it will cost you to actually go solar. And a related question would be how much you will save in the long run.
    I was able to save a large amount of money using mysolarinstaller.com. They got me the best solar installers in my area to give me free quotes. It was quick and easy, If your looking to see if solar is right or your property, here’s their website: http://www.mysolarinstaller.com


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