Solar Power Costs Dropping Dramatically. 11% in 6 Months.


Image credit: USFWS Mountain Prairie used under Creative Commons license.

No wonder corporations like Wal-Mart are going big with their solar plans, even Fox is promoting solar technology (sort of), and conservative friends of oil and coal are stepping up their anti-clean energy efforts. Solar is dropping dramatically in price, and it is beginning to look like a serious competitor to the status quo of energy production.

In fact, the installed cost of solar dropped 11% in the first 6 months of 2011. So what's going on?We've already seen promising signs that solar could be cheaper than coal in parts of Europe by 2013, but predictions are only worth so much. What is perhaps more exciting is that the installed cost—meaning the combination of the hardware costs, and the installation costs—of solar power have dropped consistently over the last few years. And they've done so at a time when cash incentives from states and utilities have declined steadily since their peak in 2002.

The news comes from a report on solar energy costs from the Lawrence Berkeley National Laboratory of the Department of Energy. Renewable Energy World has more on the exciting cost reductions that we are seeing in solar, as well as some of the more nuanced details around varying costs:

The study also highlights differences in installed costs by region and by system size and installation type. Across states, for example, the average cost of PV systems installed in 2010 that were less than 10 kW ranged from $6.30/W to $8.40/W depending on the state. The report also found that residential PV systems installed on new homes had significantly lower average installed costs than did those installed as retrofits to existing homes.

With ferocious cost reductions still possible through technological innovation, better business practices, and decreased red tape, and with improved energy storage making the intermittent supply issue less important, a clean-energy powered future is looking decidedly more plausible.

More on the Economics of Solar Power
Wal-Mart Installing Solar on 60 More California Stores
How Can Solar Power Continue its Ferocious Cost Reductions?
Solar as Cheap as Coal in Parts of Europe by 2013

Tags: Economics | Renewable Energy | Solar Power | United States

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