Ambrose Evans-Pritchard addresses the cost trajectory of solar power in a recent Telegraph article. He writes:
The US Energy Department expects the cost of solar power to fall by 75pc between 2010 and 2020. By then average costs will have dropped to the $1 per watt for big solar farms, $1.25 for offices and $1.50 for homes, achieving the Holy Grail of grid parity with new coal and gas plants without further need for subsidies.
The current average in the US ranges from $5.30 for homes to as low as $2.50 for some utilities, though the figures are hotly disputed. Germany is further ahead, down to $2.25 to $2.50 even for homes. Broadly speaking, costs are down by a quarter over the past year due to the flood of cheap Chinese panels.
I’ve had my eye on 2019 at the date of grid parity for some time, and it’s still striking to me to see rooftop solar half the price in Germany where 10K gets you a 4 kilowatt rooftop system. That price point is just so enticing but imagine when it’s $5K in 6-7 years. Then pair that with some battery storage. Finally throw in an efficiency surprise. Evans-Prichard points to high end military applications that can get 35 percent efficiency. Sure that’s at a higher materials cost but I haven’t ruled out improvements in materials costs.
While solar’s promise has been a long time coming, I’m more convinced that the industry remains undervalued, despite a general rebound. I’m also expecting a more significant backlash from the fossil fuels industry over the coming decade.