I Was Wrong About the Limits of Solar; PV Is Becoming Dirt Cheap.

minnesota solar

The price of solar power is falling faster than many thought was possible. Harvard’s David Keith comes honest with us about solar power: “Facts have changed. I was wrong.”

The unsubsidized electricity cost from industrial-scale solar PV in the most favorable locations is now well below $40 per megawatt-hour and could very easily be below $20 per megawatt-hour by 2020. Compared to other new sources of supply, this would be the cheapest electricity on the planet.

The price of solar power has fallen for multiple reasons – the largest is that the volume of solar power being manufactured has skyrocketed. Of the almost 240GW of solar power installed globally, 85% of it has been installed in the past five years.

If you’re considering solar, get a quote from multiple contractors at understandsolar.com. If you want feedback on the quote you get – either email me at john @ 9to5mac dot com or send a tweet.

And very smart people are predicting that this 240GW of solar power will be only 2% of what will be installed within the next twelve years. That suggests that the price of solar power will continue to fall further.

Now suppose costs for big systems (>100 megawatts) get to $1,000 per kilowatt by 2020, and you install them in the world’s best locations using a north-south oriented single-axis tracker to a capacity factor of 34 percent. These trackers used to add a lot of capex, but disciplined manufacturing and scale has driven cost down to about $100 per kilowatt. (Here is info on the Sunpower C1 tracker.) Under these assumptions, power cost is $20 per megawatt-hour — or $0.02 per kilowatt-hour.

Persons that I talk to in the Solar Power industry tell me that in low cost markets, the Middle East and the Philippines were brought up in the last conversation, we are already installing at $1000 per kW. With an expected 40% price drop in the next two years leading toward 80% of the world being at solar grid parity – one can only assume that some of these predictions of future growth and lower pricing will come true.

Price of Solar Modules per Watt

Source

Of course – cheap solar power does not fix the most glaring of issues: The Sun only shines for half a day. However, I’d argue that this position is slowly losing power. First off, before we even consider energy storage, we have the ability to get to 70% of grid electricity from solar and wind by installing High Voltage Direct Current (HVDC) powerlines. The Chinese recently floated the idea of installing a global HVDC network (and they’re not the first). With the State of New York recently announcing that they will be building an HVDC line to bring solar power from the open land in the northern part of the state down to the heavily populated city and the Department of Energy approving transmission infrastructure we can see this future clearly coming into view.

Yes, solar is still only shining during the day – and we are going to have to deal with this. With companies like Tesla hammering the price of energy storage and countries like Germany pushing their 1 million electric cars we should expect to see the price of batteries to continue to fall like they have. And that will mean we will continue to see the price of solar power fall – and maybe a 100% renewable grid coming into reality.

Cost-of-Li-ion-battery-packs-in-BEV-nature.com_1Source

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Comments

  1. Snarkasm - 7 years ago

    Hi, could you make your charts smaller? I can almost read the text.

    • John Fitzgerald Weaver - 7 years ago

      If you want – I’ll go find a couple that have a higher resolution in the original studies that they came from

      • Bekabam - 7 years ago

        Or have your images link to the hq versions. It’s surprising that an author would take such a negative stance on a comment with truth behind it, even if it was sarcastic.

      • John Fitzgerald Weaver - 7 years ago

        That’s a better idea – I’ll find links. Thanks for the suggestion. Didn’t think my response was negative. I’ll work on the tone.

      • John Fitzgerald Weaver - 7 years ago

        Added links to sources – good idea

      • For what it’s worth, I didn’t read it as negative or sarcastic. It sounded to me like you were offering to track down some higher resolution pictures.

      • John Fitzgerald Weaver - 7 years ago

        ty – i added source links below the images by the way

      • Luis Martínez - 7 years ago

        The author didn’t take a negative stance, he simply intended to be helpful saying he would take action

  2. Grammatik Macht Frei - 7 years ago

    “we have the ability to get to 70% if grid electricity from solar and wind”..

    of, not if, I think you’ll find.

  3. skljdfjklfskjl - 7 years ago

    Batteries are not the answer. Hydro pumped storage is far longer lasting and uses less chemicals. That should be the future of energy storage. Batteries are good for portable energy needs and that’s where they should be utilized.

  4. Great writeup. Thank you!

  5. František Kubiš Jr. - 7 years ago

    I think there should be kWp instead of kW units 🙂
    Or at least, where I live, it is used this way…

  6. Robert Lyman - 7 years ago

    Yet again, we read this hyping of solar energy. In Ontario, Canada, electricity consumers are paying an outrageously high price for the mistakes of politicians who have forced the provincial utility to buy solar under feed-in tariffs. Most of the power that has been contracted so far was purchased at 80.1 cents per kWh (i.e. $801.00 per megawatt hour) and, after five years of this outrage the price being paid is still about 28 cents per kWh ($280 per megawatt hour). Solar represents far less lass 1% of generation but costs almost 12% of generation costs. Beware the solar propaganda and so not be fooled by claims that solar energy will ever come close to replacing conventional energy sources. It is a lie.

    • John Fitzgerald Weaver - 7 years ago

      In the article we see solar priced at $20/MWh – giving $.80/kWh is insane. Don’t blame solar for that.

    • lel - 7 years ago

      Jokes on you sir. There are other places on Earth other than Ontario, Canada, The sun shines in other parts of the Earth, too ya know.

      • Robert Lyman - 7 years ago

        The experience in Germany, Spain and Italy has been similar to that in Ontario. Unless you live in the tropics, solar has not been a sensible option.

    • mitchellbeer - 7 years ago

      It’s been some time since Ontario’s feed-in tariff rate has been set at 80¢/kWh–the point was to build a homegrown industry and reduce the rate as production costs fell, and that’s exactly what’s happened…to the extent that those producers who don’t fully understand the strategy are bemoaning the rapid reduction. (The rest of us are pointing out that it’s nothing to complain about — we *want* to build a self-sufficient clean energy sector.)

      But there’s a bigger issue here–if you don’t want to be fooled, be wary of widespread claims that renewable energy deployment is driving up Ontario’s retail electricity costs. The lion’s share of the increase actually traces back to cost overruns on the Darlington nuclear station that took place decades ago, essentially drove North America’s second-largest power utility, Ontario Hydro, into bankruptcy, and led to a nuclear debt recovery charge that was just recently taken off our monthly electricity bills. Yes, there has been some small increase in electricity rates attributable to the province’s Green Energy Act, but you could call that the investment that was needed to build an industry that has brought the province many thousands of clean energy jobs.

      • John Fitzgerald Weaver - 7 years ago

        Is there further documentation of this? I get a lot of crap from my go nuclear or go home friends that fully blame solar power for it, and since I’m not focused on the area I have no response.

      • mitchellbeer - 7 years ago

        Yes, documentation is out there. I’ll need to track down the specifics in Ontario, but the story has been circulating…well, for about as long as we’ve been paying down the debt on Darlington. Message me privately, please, if you’d like me to pull together the available research.
        More generally, the economics on nuclear are so consistently awful that you can make a credible case against further development without even saying the words “Fukushima”, “Chernobyl”, or “massively long-term waste disposal”. (See what I did there? 🙂 ) We do have a more than 100 articles on nuclear on The Energy Mix, though the economic realities make it a technology of secondary interest for an e-digest on climate and energy *solutions*. http://smartershift.com/energymix

      • John Fitzgerald Weaver - 7 years ago

        Thanks Mitchell – I will reach out. At some point I am going to write an article about the hiccups in solar power growth. There are some programs that I’d like to focus on to get a better discussion going (like Germany, Spain and Ontario). I’ll send an email – it might be a few weeks as I have a tight work schedule and this article is down the line.

        Thanks for the discussion.

      • Robert Lyman - 7 years ago

        It has been a few years since the FIT was 80.1 cents per kWh, but much of the currently contracted supply (under 20-year contracts) were concluded at that rate. The current rate or just over 28 cents per kWh is hardly a bargain. You are incorrect that most of the costs of recent significant increases in electricity bills are due to investments in nuclear energy made decades ago. The Ontario Auditor General issued a value-for-money audit on the provincial electricity system in 2015. It showed that solar and wind energy sources represent a large portion of the increases in generation costs. The report could not capture other cost increases due to solar energy because much of these costs are incurred by local distributors for whom solar represents an embedded cost not captured by the accounts of the provincial Independent Electricity System Operator. The cost noted by the Auditor General also do not address the system costs due to the fact tat solar and wind are intermittent and must by backed up by natural gas plants, which sit idle much of the time, not do they capture the costs of the addition transmission needed. See the AG report here:http://www.auditor.on.ca/en/content/annualreports/arreports/en15/3.05en15.pdf

      • John Fitzgerald Weaver - 7 years ago

        I’m in Massachusetts and we’re talking about getting a major powerline from you folks to buy some of your hydro (generation source, not electricity in general). If you have that much extra electricity – why would you need gas peaker plants?

      • John Fitzgerald Weaver - 7 years ago

        And yes, *i saw what you did there*

      • Robert Lyman - 7 years ago

        The natural gas plants are there to back up the intermittent (i.e. unreliable) wind and solar plants, which produce power at precisely the times of day and seasons when provincial demand is at its lowest. For years, the IESO, while constantly adding more and more wind and solar generation, has had to cope with the overall surplus of generating capacity. Wind and solar, despite being by far the highest cost generation sources, are given “first-to-the-grid” rights. Thus, when they produce unneeded power, they formerly dumped it on the export market at very low rates or at a loss (i.e. negative rates). When the provincial government became politically embarrassed by this, it ordered that the utility no longer pay Michigan and New York to take the power that Ontario consumers were paying through the nose to produce. Consequently, when wind and solar now produce, most of the time the utility uses curtailment of all generation sources; it pays them not to produce. When even this does not work it still is forced to dump the power on the export market. The loss on export sales last year was about $1.3 billion.

      • John Fitzgerald Weaver - 7 years ago

        Intermittent is not equal to unreliable in solar’s case. Solar power is very predictable spread across large regions (load zones).

      • mitchellbeer - 7 years ago

        HERE’S SOME DOCUMENTATION! (Only shouting because I’m glad it crossed my desk.) Robert, this is another take on the provincial Auditor-General’s report, from an evidence-based source that I trust.

        http://www.huffingtonpost.ca/keith-brooks/ontario-green-energy_b_9831972.html

  7. Walt - 7 years ago

    I strongly believe as EV ‘s become more mainstream it will help accelerate adoption of Solar PV. people will start realizing how cheap it is to charge their cars, and how cheap it is to own an array vs paying the utility long term. I am waiting to purchase a system near the end of the incentive extention. It should play pretty nicely w/ the Model 3.

  8. Ross - 7 years ago

    Any thoughts on which stock is best positioned to benefit from this?

    Seems like First Solar has the best balance sheet… Thoughts?

    http://seekingalpha.com/article/3969057-first-solar-solid-values-investment

  9. W.Benson - 7 years ago

    Solar power from coast to coast, without a tree in sight. God, how depressing. I’m beginning to warm up to nuclear.

    • John Fitzgerald Weaver - 7 years ago

      We could get at least 40% of our electricity from just 23% of our rooftops. Add parking lots and we’re way higher.

      http://www.greentechmedia.com/articles/read/nearly-40-of-us-electricity-could-come-from-rooftop-solar

    • gopher65 - 7 years ago

      You need to cover less than 10% of the land surface area of the worst (significantly inhabited) areas with panels in order to provide 100% of power. In good areas you can cover all the area needed just by using rooftops. In bad areas (northern, rainy/snowy areas) you need some supplemental installations as well, but it really isn’t undoable. It’s a far cry from having to plaster every square meter of ground with panels. Done properly, you wouldn’t notice solar is even there.

  10. Noahboz - 7 years ago

    So cool. Good to see the battery cost reduction stats with PV cost optimization. We use our own small PV panels at our office to charge batteries so employees can charge phones and other devices. Once more people get the awesomeness of running homes let alone small devices on solar it will accelerate quickly.

  11. Sonia Evjenth - 7 years ago

    How were you able to publish this 2013 article 3 years into the future???

  12. solr - 7 years ago

    But shouldn’t the cost of solar power also include the cost of cleaning solar panels which, I believe, is a major component of solar energy costs?

    • John Fitzgerald Weaver - 7 years ago

      I’m going to ask these folks for a quote – http://www.solarfarmcleaning.com/

    • Andrew Thomson - 7 years ago

      When installed correctly, panels are pretty much self cleaning via the installation angle/tilt and rain. For systems of concern, you can install reticulated cleaning systems that recycle the water.

      Solar panel cleaning is a scam. It will improve performance for a few minutes due to the effects of the panel cooling however it returns to normal. The money spent on cleaning is far greater than any extra yield achieved.

  13. Daniel Brooks - 7 years ago

    What about prices for lithium? Are we expecting batteries to just get every cheaper given that they rely on a limited resource in ever higher demand?

    • gopher65 - 7 years ago

      It’s not terribly likely that all batteries – including stationary storage – will be high lithium (and cobalt) content chemistries. If that actually came to pass it wouldn’t be good, but there are other ways to build acceptable batteries if you don’t care as much about mass or volume.

      batteries with higher lithium and cobalt content are, however, currently in demand for applications where mass and volume are constrained, like phones and electric vehicles. That will probably change over the years and decades as battery research continues is slow slog forward.

    • PV - 7 years ago

      There are lots of chemistries for batteries. Lithium is popular for mobile applications because of its light weight. For industrial sized batteries, sodium-sulphur or sodium ion don’t require lithium.

  14. Mike Beckett - 7 years ago

    Renewables and networked microgeneration is the future of our electricity energy grid.

  15. Ray - 7 years ago

    Even residential solar has dropped to historically low levels. It now possible to purchase installed systems with U.S. made solar panels for less than $1.90 a watt after applying the 30% tax credit. Pricing from local and regional solar dealers has dropped so low that it’s now putting the once popular solar lease business model out of business.

  16. Excellent information. If the predictions goes right, the planet can be saved.

  17. Jayesh - 7 years ago

    House powar project information

  18. Hloni Mthembu - 7 years ago

    Interesting and informative article. Fair comments as well.

  19. Sirelkhatim Nugud - 7 years ago

    In case they succeed build an HVDC grid how can the consumer use this electricity in his ac appliances and if he uses dc/ac converters will this be conomical for him and does incur more expenses.

    • Michael R Berger - 7 years ago

      HVDC is only for long distance extremely high power grid links. Much lower loss for long haul. So you only convert to AC at point of delivery to AC grid.

  20. SRIDAR - 7 years ago

    Very good and sustainable idea and development

  21. Peter Davies - 7 years ago

    I’m afraid your Li-in battery costs are out of date. General Motors recently let slip that it had a contract with LG Chem to supply cells at $145 / kWh. By 2022 they expect it to be $100 / kWh.

    Also see http://insideevs.com/lg-chem-ticked-gm-disclosing-145kwh-battery-cell-pricing-video/ which says GM is getting cells $100 / kWh cheaper than anyone else is, which is why LG Chem are not happy with the disclosure. All the LG Chem customers are now wanting a cell price of $145 / kWh.

  22. guydauncey - 7 years ago

    If whoever assembled the solar PV in the picture covers the ground between with a white surface, they’ll get up to 100% more yield… solar albedo…

    • John Fitzgerald Weaver - 7 years ago

      I installed a few Solyndra systems back in the day and we installed white roofs underneath those modules because they were round. In the future, there will be a bi-facial solar module (no opaque backpanel) that will make amazing benefits from a white ground.

      The ground covering costs would have to be analyzed to determine if they make sense relative to the increased productivity.

  23. Warren - 7 years ago

    Climate change is a global problem and solutions should be conceived as such. The sun is constant as a planetary resource and energy tapped from it can be shifted from high concentrations to areas that receive smaller amounts as top-up energy. Daylight areas could feed energy to night-time areas. This would make storage less of a challenge.

  24. Adama Sourang - 7 years ago

    Good job.

  25. Grant - 7 years ago

    To add to the momentum and flexibility of solar…recent announcements in the industry and R&D demonstrate early breakthroughs in being able to produce in fully clouded days, breakthroughs in composition of solar materials that vastly improves efficiency and reducing cost, breakthroughs in where cells can be positioned and fixed, and how the energy is converted. Add this then to scale benefits being experienced in production of plants and storage then you can see this price issue being driven down further and faster than what these graphs even predict. Solar sitting along side other forms of production in combination would produce a killer result commercially and also one that takes the heat off the environment.

  26. d - 7 years ago

    HI ALL, WOW Having had an awesome father that ran a NUCLEAR POWER PLANT annnnnnd a HYDRO POWER PLANT i learned first hand allong with all the informatin i learned from having worked for a company that worked closely with nuclear plants as well as the Nuclear Regulatory Commission,NRC, I am soooooooo “FOR” Nuclear energy for everyone. ELECTRICITY IS OVER PRICED!!! NY PRODUCES SOOOOOO MUCH EXCESS POWER FROM THESE PLANTS that they sell it to other states. I too believein SOLAR POWER. Back in the late 80’s early 90’s my friend built his home with strictly SOLAR POWER, HE and his wife NEVER HAD a power outage nor did he ever run out of hot water AND NEVER HAD TO PAY ANY ‘RIP OFF’ ELECTRIC COMPANY BILL!!!
    I hope that in my lifetime (i’m only 54yo) I see our Americans take a stand AGAINST the OBVIOUS GOVERNMENT MONOPOLY on OUR POWER CHOICES annnnnd PRICES!!!!!!

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