Prometheus Institute Study: Solar Power to Reach Grid Parity in U.S. in 2015


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Solar Power is Hot (But that Phrase is Getting Old)
It's good news when many studies say the same thing. At about this time last year, we reported on the Utility Solar Assessment Study, which concluded that 2015 is the year solar power would start to reach grid parity (meaning: it would cost about the same as electricity produced from other sources). Now, the founder of the Prometheus Institute said at the Intersolar conference in San Francisco that "two-thirds of the U.S. market (by electricity sold) using photovoltaic systems will be at grid parity by 2015."
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Earth2Tech writes: "The figure includes federal tax incentives and assumes that electricity rates will rise on average 1 percent per year, a conservative assumption, according to Bradford. Solar systems can produce electricity at or below grid prices in about 10 percent of the U.S. market today, Bradford said. That number will rise to two-thirds of the U.S. market because of the fast decline in the cost of modules and other system components like racks. Bradford said commercial solar systems would reach about $2 to $3 per watt installed and residential about $4 per watt installed by 2015, down from more than $6 per watt today."

Now of course, it is arguable that tax incentives are what is helping make solar competitive and that it isn't really getting to grid parity, and there's some truth to that, but it's not like like dirty power-generation industry hasn't gotten tax breaks in the past. Not to mention that solar power has fewer "externalities" that others will have to pay for, so those tax breaks might pay for themselves over time (fewer smog days, loss productivity due to asthma and pollution, smaller health care costs, fewer global-warming related costs, etc).

We always have to be very careful when it comes to monetary incentives, because there's always a chance that we would back the wrong horse and actually slow down the progress that would otherwise take place because the best technologies are made relatively less competitive. The corn ethanol subsidies are a good example of this. One good way to avoid this is to create incentives that don't pick specific winners; for example, a tax credit for solar power that doesn't specify the method of production (solar thermal or photovoltaic).

Via Earth2Tech
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Tags: Alternative Energy | Energy | Solar Power

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