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The Price of Solar Continues to Fall

JackSawyer MA, United States 0 Ratings 11 Discussions 8 Group posts

Posted by: JackSawyer // Student

The price of both installation and buying solar panels is reaching remarkable lows. New data from 2015 shows that the price of installation in 2015 went down 5% for residential rooftop systems and 12% for solar farms. This is quite a significant statistic because the price of installation hasn't really moved since 2012. So this news, coupled with existing market forces and policies, means that utility-scale solar is expected to soon become "cost competitive with conventional forms of electricity generation" (Fares).

Installation has become more affordable thanks to the price of inverters declining. These inverters play a big role in the installation as they convert DC power produced by the panels to AC power that can be utilized on the grid. The idea that solar energy will soon become cost competitive with conventional forms of electricity generation is backed further by the declining price of solar Power Purchase Agreements (PPA's). PPA's are long term contracts often created for two parties, one that supplies power and the other purchases that power. In the power industry the average market price of electricity is around $30 to $40 per megawatt hour, in 2015, solar PPA's fell below $50 per megawatt hour. The price gaps between solar and conventional forms of electricity are closing.

Power Purchase Agreements, installation, and solar panels are all starting to fall on the same trajectory, that trajectory being a decline in cost which will in turn make everything about solar more competitive with the fossil fuel alternatives. If we continue to see declining prices for solar in the coming years, we could start to see solar being used more widespread, not just in the U.S., but across the globe.

Where do you think solar is headed? Will we convert to solar if it becomes cost-effective? Or will we wait until the limitations of solar technology are improved?

Fares, Robert. "The Price of Solar Is Declining to Unprecedented Lows." Scientific American Blog Network. N.p., 27 Aug. 2016. Web. 08 Sept. 2016. <http://blogs.scientificamerican.com/plugged-in/the-price-of-solar-is-declining-to-unprecedented-lows/>.

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