Study: Solar to be competitive within a decade
(Read article summary)A new study claims that solar power is approaching "grid parity," in which costs are competitive with conventional retail electric rates throughout much of the United States.
A new study claims that solar power is approaching "grid parity," in which costs are competitive with conventional retail electric rates throughout much of the United States.
The Utility Solar Assessment Study, released by the research firm Clean Edge Inc. and the nonprofit "green-economy" group Co-op America, says that as costs for solar panels and concentrating solar energy systems decline and as costs for coal, natural gas, and nuclear plants rise, the US will reach a "crossover point" around 2015:
For the first time in modern history, the price of solar-generated electricity is within striking distance of conventional energy sources for a wide range of applications. Already, solar power can compete in regions with high electricity rates and with favorable incentives. It can compete effectively for peak power production, in grid-constrained territories, and for applications that are off the grid.
According to its authors, the study is based on more than 30 interviews with solar, utility, financial, and policy experts.
The report says that, with proper investment, solar power can reach 10 percent of US power generation by 2025. The US currently gets less than one tenth of one percent from solar, but it has been growing quickly. Solar power has jumped to 3,000 megawatts in 2008 from 600 MW in 2003, the study says.
Reaching 10 percent, says the study, will require between $450 billion and $560 billion in capital costs by 2025, an average of $26 billion to $33 billion per year.
That sounds like a lot, but the report points out:
To put the projected investment in perspective, the Edison Electric Institute estimates that the U.S. electric utility industry spent more than $70 billion on new power plants and new transmission and distribution investments in 2007 alone. Conservatively assuming similar expenditures between now and 2025 (and most experts believe those annual costs will increase), we’re talking about a total investment of more than $1.2 trillion—roughly double to triple our projected investment for solar in the U.S.
