Energy Facts: Solar Energy’s Massive Price Drop

May 26, 2013 by  
Filed under Green Energy News

May 26, 2013

Nathan Wilson says:

The graph makes a pretty picture, but I don’t think we should use it for future extrapolation.  For one thing, the graph ignores the non-cell costs (e.g. installation, inverters, and balance of plant costs) which now constitute the majority of the cost of solar energy.  They have dropped also, but not nearly so dramatically.

It is also noteworthy that 1985 marked the launch of the first commercial utility scale solar power: SEGS I in the Mojave desert of Daggett California, with 13.8 MWatts.  And it was not PV (which at that time was used only for spacecraft and toys), but trough concentrating solar thermal power (CSP) with thermal energy storage.  

As described here, SEGS I made power for about $.24/kWh (1988 dollars).  By 1989, the final plants in the SEGS series were making power for $0.08/kWh 1988 dollars (or  $0.157/kWh in 2013 dollars per this CPI calculator).  I believe that these data include tax incentives.

CSP cost has not changed much over time, and PV has only dropped lower than CSP in the past couple of years, hence “utility scale solar cost” have not changed much.  

According to the US DOE, solar power today costs about $0.26/kWh from CSP and $0.14/kWh using PV.   If energy storage costs were added, CSP would still easily beat PV, since CSP costs about the same with or without storage (again storage does not matter if and only if most of the grid’s energy comes from fossil fuel).

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