Solar is achieving record cost reductions.
Surging demand has dropped solar module prices approximately 75% in just the past three years, with another 50% expected over the next three. The average pre-incentive cost of going solar decreased 17% in 2010 alone, the most significant annual reductions since the data has been tracked. Costs declined another 11% in the first half of 2011. Midyear 2012 we are seeing solar panels prices averaging $0.79/Watt. (Source: Lawrence Berkeley National Lab’s Tracking the Sun IV, Bloomberg Finance Reports, Navigant Consulting and other market data)
This mirrors the experience with cell phones, digital cameras and flat-screen—and follows the rule of thumb in electronics manufacturing that costs decrease 20% each time production volume doubles. Those favorable technology prices combined with business efficiencies have delivered increasing value to consumers.
Solar prices are competitive with conventional power right now.
On a levelized cost of energy basis (full life-cycle cost of energy), solar is becoming competitive with average electricity prices in both residential and commercial markets. Electricity prices vary dramatically across the U.S, so solar will hit ‘grid parity’ at different times per state. Bottom line though, the price of solar is looking right in many states across the U.S. today. Utility contracts for solar power are being signed in the U.S. at prices competitive with new coal and natural gas plants and well below the cost of new nuclear. Utilities in California, the nation’s largest solar market, have secured contracts for over 4.4 gigawatts of solar at prices below new natural gas generation. (Source: Vote Solar analysis).
Want to learn more what technological advances that are driving down the cost of solar. We think the National Renewable Energy Laboratory is a good place to start.