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Solar Power Prices to be on Par with Coal & Oil Within Two Years!

Lucas Mearian (Computerworld-Nov. 18, 2014)

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The cost of roof-top solar-powered electricity will be on par with prices for common coal or oil-powered generation in just two years, and the technology to produce it will only get cheaper.

The prediction, made by Deutsche Bank’s leading solar industry analyst, Vishal Shah, is part of a report on Vivint Solar, the nation’s second-biggest solar panel installer.  Shah believes Vivint Solar is doing so well that it will double its sales each year for the next two years. 

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The sharp decline in solar energy costs is the result of increased economies of scale leading to cheaper photovoltaic panels, new leasing models and declining installation costs.  Today, only 10 states boast solar energy costs that are on par with those of conventional electricity generation methods, such as coal-fired power plants.  Those states include Arizona, California, Connecticut, Hawaii, Nevada, New Hampshire, New Jersey, New York, new Mexico, and Vermont. 

Last year, those states using solar power accounted for about 90% of U.S. installations.  But, by 2016, Deutsche expects solar energy to reach price parity in all 50 states. 

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Currently, the U.S. has 16GW of installed solar capacity, with nearly 5GW of solar capacity added last year alone, according to Deutsche.  One of the factors spurring growth is the expiration of the federal government’s solar investment tax credit (ITC).  That measure, passed in 2008, offered a 30% tax credit for residential  and business installations.  When it expires in 2016, the tax credit will drop to a more permanent 10%. 

“Consequently, we expect to see a big rush of new installations ahead of the 2016 ITC expiration,” Shah stated in his research document.  Deutsche said solar system prices in the U.S. are expected to decline from just under $3 per watt today, to under $2.50 per watt over the next 18 months, leading to a further decline in the price per kilowatt-hour of solar to 9-14 cents, “driving further acceleration in solar shipments.”

CLICK HERE to read the entire article by Lucas Mearian.

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