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The price of utility-scale solar power is 59 percent below where analysts thought it would be at this point back in 2010.
That’s the word from a new report out of the Energy Department’s National Renewable Energy Laboratory (NREL) and Lawrence Berkeley National Laboratory (LBNL). Furthermore, between 2012 and 2013 alone, the price of a solar system your neighbor or your local businesses owner might install on their roof dropped 12 to 15 percent. And depending on where it’s located and the shape of the market, it could fall another 3 to 12 percent by the end of 2014.
Within the United States, the NREL and LBNL research found that the median price for a completed 10-kilowatt-or-less solar system — which is what generally gets put on residential homes and small commercial buildings — hit $4.69 per watt in 2013. For systems quoted in 2012 but expected to be installed in 2013, the median price went down to $3.71 per watt. That’s all compared to $5.30 per watt in 2012, according to work the LBNL did on this same topic last year.
Utility scale solar — which generally includes projects at 5 megawatts or higher — had a median price of $3.00 per watt for projects already completed in 2014, and $1.92 per watt for projects expected to be installed in 2013.
Credit: Department of Energy / Lawrence Berkeley National Laboratory
Significantly, the per-watt price for utility-scale solar continued to decline in 2014 to $1.80 — 59 percent below where modeling in 2010 predicted it would be this year.
That’s good news for the Energy Department’s Sunshot Initiative, which helped fund the report, and which aims to drop the cost of solar technologies 75 percent from 2010 to 2020 by funding various universities, national laboratories and private sector projects.
“There is still considerable uncertainty as to how low PV system prices will drop in the next five to 10 years,” said David Feldman, a lead author of the report and an analyst with the NREL. “However, there appears to be an emerging consensus that the SunShot’s price reduction targets are within reach and more and more likely to be realized. We see this reflected in the fact that many of the current projections are far lower than projections made in the recent past by the same sources.”
The price also varies from state to state. In 2012, Texas boasted the lowest median price for residential and small commercial systems, coming in at $3.90 per watt. In 2013, Texas reached $3.47 per watt. But it was overtaken by Florida, which dropped its median price per watt all the way to $3.33.
Credit Department of Energy / Lawrence Berkeley National Laboratory
Looking forward, and widening to a global perspective, the report drew on research by Bloomberg New Energy Finance and Deutsche Bank among others to predict that smaller distributed systems will reach between $1.50 and $3.00 per watt in 2016. Larger utility-scale systems are projected to reach $1.30 to $1.95 per watt in that year.
The cost per watt of a solar photovoltaic cell has fallen off a cliff in the last few decades, plunging 99 percent since 1977. According to some analyses, the leveled cost of solar power — what you get when you account for the cost of installation, maintenance, investment, depreciation, and all the other factors in an energy source’s life cycle — is already just as cheap as the equivalent cost of conventional electricity in countries like Italy and Germany. And solar’s leveled cost is anticipated to become competitive with that of natural gas in nearly every country in the world by 2025.
by Jeff Spross
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