• 5 minutes THE GREAT OIL PRICE PREDICTION CHALLENGE OF 2018
  • 8 minutes So oil touched $80! (WTI break $71 twice). What does the future hold?
  • 14 minutes China Tariff Threatens U.S. LNG Boom
  • 49 mins Global Hunger Continues to Grow Driven By Climate Change
  • 7 hours Threat: Iran warns U.S, Israel to expect a 'devastating' revenge
  • 15 hours Why Are the Maldives Still above Sea Level?
  • 13 hours Praise for Alberta
  • 1 hour Will Robots Bring The Demise Of European Artistry?
  • 16 hours Downloadable 3D Printed Gun Designs, Yay or Nay?
  • 6 hours Saudi Aramco IPO Seems Unlikely
  • 2 hours Nothing new in Middle East? Iran Puts On 'Show Of Strength' Military Exercise In Gulf
  • 20 hours Lack of Global Warming Messes with Russian Arctic LNG Plans
  • 1 day Jan's Electric bike replaces electric cars
  • 1 day Regime For Regime: China Says Willing To Provide Venezuela With What Help It Can
  • 21 hours Freedom Of Internet: Google Plans Censored Version Of Search Engine In China!
  • 6 hours Transition Time: Volkswagen Announces "Electric for All" Campaign
Alt Text

Building The World’s Largest Solar Project

Saudi Arabia is looking to…

Alt Text

New Breakthrough Boosts Solar Fuel Efficiency

A new breakthrough from researchers…

Alt Text

The Solar Tech That Is Making Cleaner Oil

As oil’s supermajors face increasing…

Climate Progress

Climate Progress

Joe Romm is a Fellow at American Progress and is the editor of Climate Progress, which New York Times columnist Tom Friedman called "the indispensable…

More Info

Trending Discussions

Proof that the Solar Industry is on the Brink of a Huge Expansion

Proof that the Solar Industry is on the Brink of a Huge Expansion

A new report from the prominent global consulting firm McKinsey shows why solar photovoltaics have hit a tipping point.

As the economics of solar PV continue to improve steadily and dramatically, McKinsey analysts conclude that the total “economic potential” of solar PV deployment could reach 600-1,000 gigawatts (1 million megawatts) by 2020.

In the year 2000, the global demand for solar PV was 170 megawatts.

That doesn’t mean 1 million megawatts will get developed by 2020; it’s just an estimate of the economic competitiveness of solar PV. When factoring in real-word limitations like the regulatory environment, availability of financing, and infrastructure capabilities, the actual yearly market will be closer to 100 gigawatts in 2020.

That could bring in more than $1 trillion in investments between 2012 to 2020.

The McKinsey report, appropriately named “Darkest Before Dawn,” highlights three crucial factors that are giving the solar industry so much momentum — even with such a violent shakeout occurring in the manufacturing sector today.

1. Because solar mostly competes with retail rates, the economic potential for the technology in high resource areas is far bigger than actual deployment figures would suggest. McKinsey predicts that the cost of installing a commercial-scale solar PV system will fall another 40 percent by 2015, growing the “unsubsidized economic potential” (i.e. the economic competitiveness without federal subsidies) of the technology to hundreds of gigawatts by 2020.

US Solar Economic Potential

2. The most important cost reductions in the next decade will come not through groundbreaking lab-scale improvements, but through incremental cost reductions due to deployment. The McKinsey analysis shows how the dramatically these cumulative cost improvements can change the economics of solar. (For more, see: Anatomy of a Solar PV System: How to Continue “Ferocious Cost Reductions” for Solar Electricity.)

Cost Reductions of PV System

3. Solar is already competitive in a variety of markets today. As the chart below illustrates, there are at least three markets where solar PV competes widely today: Off-grid, isolated grids, and the commercial/residential sectors in high-resource areas. Of course, the competitiveness of the technology varies dramatically depending on a variety of local factors. But this comparison shows just how steadily the cross-over is approaching.

Solar Photovoltaic Markets

Wait, solar is actually competitive? Didn’t the death of Solyndra mean the death of the solar industry? Addressing the solar sceptics, the McKinsey analysts counter the notion that the solar sector is down for the count:

“Those who believe the solar industry has run its course may be surprised. Solar companies that reduce their costs, develop value propositions to target the needs of particular segments, and strategically navigate the evolving regulatory landscape can position themselves to reap significant rewards in the coming years.”

The short-term picture for solar is extraordinarily challenging, particularly for manufacturers trying to figure out how to make a profit with such a massive oversupply of panels on the market. But this is not an industry in its death throes; these are natural pains for a disruptive, fast-growing industry. The tipping point is upon us.

By. Stephen Lacey




Back to homepage

Trending Discussions


Leave a comment
  • MaryJoh on May 17 2012 said:
    I agree with you Stephen! I am continually reading article that predict that the solar industry will be impacted and several solar installation companies will follow-up and file for bankruptcy protection.

    There is hope that the govenmernt will continue to offer incentives for residential solar installations. The cost of solar installation this last year has decreased. One of the primary factors is the lower cost of the solar panels themselves. The U.S. speculates that China has violated anti dumping laws and have reduced their margins to maintain their position in the solar manufacturing industry. On the table is more discussion to increase the tariffs on imported/exported solar panels in an attempt to deter this. As R&D continues in the U.S. and methods to reduce the cost of solar installation whether residential or commercial can be achieved, the U.S. could position themselves to becoming the leader in this industry.

    Mary Joh

    http://solaruniversecalifornia.com/sce

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News