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Cost of Solar Panels To Drop 25% in 3 Years

2015-07-31

The Clean Technica blog predicts that the cost of solar photovoltaic panels will drop 25% in the next three years (post is here).   This is on top of the already impressive 6-8% per year drop in costs over the past ten years.  For example, the average home-scale system cost $12/watt installed in 1998 and $4 in 2013 ($3.33 in Florida and $4.94 in California.)  Utility-scale systems have been estimated at, for 20 megawatts and more installed, at $1.88/watt in 2013.

In Germany, a country that is pushing hard for renewable energy and eliminating nuclear generators, residential systems have been estimated to cost half of the price here in the US (see this government-produced document: here), and the difference in cost is primarily “soft” expenses like installer margins.

There are many different predictions of the future cost of photovoltaic power.   Another paper, by the Institute for Policy Integrity (here), shows a graph estimating solar power production as a percentage of total US electric production: rising from less than 0.01% in 2005, it stood at 0.4% in 2012.  However, the US government has predicted that this percentage will remain low: less than 1% through 2025.  This prediction is a gross underestimate, based on the assumption that prices for panels will actually increase 15%; other sources predict price decreases between 10% and 23% in the next five years.  The prediction also assumes that the federal investment tax credit, which is scheduled to expire in 2016, will not be renewed.  More realistic extrapolations by the Department of Energy predict that solar will represent between 4 and 8% of total electricity production by 2025.

These publications suggest that there is cause for optimism over the future of energy production worldwide, even in the United States.  One practice that has been suggested is that households with electric cars could use the batteries in their cars for storage of energy produced by rooftop solar panels.  This would combine the transportation need for energy with household use in a productive fashion and reduce the sale-back of electricity to the grid, a contentious issue with which electric power companies would rather not deal.

All of these practices, however, require investments which the average household in the United States cannot cope, particularly in view of the loss of wealth they have experienced over the last 35 years (since Reagan was elected and started the erosion of living standards which has continued through the Bush administrations and even Democratic presidents.)  There will be a pressing need for the government to step in and provide financing for these investments, a need which can only be realized by the election of sympathetic Senators and Congress-people in the near future.

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