The most recent numbers on the declining cost of utility solar

The Obama Administration has been trumpeting the success of the Sunshot Initiative recently. Energy Secretary Ernest Moniz noted that the program is 60 percent of the ways toward lowering the cost of utility scale solar power to 6 cents per kilowatt hour.

To put the numbers in perspective, in 2010 utility solar was 21 cents per kilowatt hour and by the end of last year it was 11 cents per kilowatt hour. That’s a massive move in just over 3 years. But at 6 cents per kilowatt hour, the technology gets price competitive with natural gas. The Sunshot Initiative includes $25 million to bring down manufacturing costs as well as installation times.

We’ve seen a number of moves to improve installation times by speeding up assembly times and bringing in better mounting systems. SolarCity acquired Zep Solar recently for $158 million because it liked the startup’s rail-free solar mounting systems.

Still, permitting and “soft costs” like marketing remain a cost center and in truth, the Sunshot Initiative should contain much more funding than it does. But until, then I’ll take continued incremental progress toward making solar more cost competitive.

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Adam Lesser

Analyst Gigaom Research

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