Low Costs and Big Scale: Welcome to The New Era of Solar

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Solar’s high price tag once limited its use to those willing or required to pay more for cleaner power — but that’s quickly changing. A dramatic drop in panel prices means we are now in a new era of solar: one in which solar technology costs are no longer the major barrier to scale.

Last week we were joined by researchers from our national labs – NREL and LBNL – for a webinar on that very subject. The new briefing they presented, “Photovoltaic System Pricing Trends: Historical, Recent, and Near-Term Projections (2013),” draws on several ongoing research activities at the two labs, including:

  • NREL’s bottom-up PV cost modeling
  • NREL’s synthesis of PV market data and projections

Their combined work is intended to help us all gain a better understanding of recent price reductions and what comes next on the path to low-cost PV. Watch for yourself below.

Essentially, we’ve seen a 6-7% average annual reduction in the pre-incentive price of installed solar since 1998. Looking back, that decline was largely due to a significant reduction in global module prices over the past few years. Looking forward, more price reductions are expected! However, module prices are expected to stabilize, and so those continued declines are likely to come from reductions in non-module “soft” costs like permitting, cost of capital and customer acquisition.

Our briefing with the National Labs was followed quickly by the release of another welcome report on solar progress: the latest U.S. Solar Market Insight from GTM Research and SEIA. The report showed that as of Q2 2013, the U.S. has installed a 9.4 gigawatts of solar capacity — enough to power more than 1.5 million American homes. Let’s remind ourselves that in 2007, we celebrated the fact that we had 500 megawatts of installed solar capacity. Now, less than 6 years later, we have nearly TWENTY TIMES that much. All this goes to show that low costs + market access = scale. And with good policy and business innovation, we are well on our way to solving that equation.

In this new era of low PV prices, our work at Vote Solar has shifted toward policies that specifically target remaining “soft” costs, continue to broaden market participation, and ensure that we’re preparing our grid to take full advantage of a new energy landscape that involves lots more solar.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.

1 Comment

  1. *Welcome to the new era of electricity generation – distributed.*

    Electricity demand is rising yet utilities are seeing demand stagnate from their end. The bloated utility monopolies are in for a world of hurt.

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