In 2010, the average annual electricity consumption for a U.S. residential utility customer was 11,496 kWh. That’s 31.5kWh per day.

Almost all the ‘lower 48′ gets 4.5 hours or more of usable sunlight. (That’s an annual average, not a daily minimum – for you nit pickers.)

Based on that you’d need 7kW (7,000W) of panels to produce all the electricity you use each year.

If we’re talking a future panel price of $0.50/Watt then that’s only $3,500.

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Panels are not the entire cost. While panels have dropped close to $1/Watt there are other costs and those costs are out of control in the US. US average residential installed solar is running around $5.80 (2011) while in Germany they have been able to bring the price down to $2.80 (2011).

If you lived outside the sunny parts of the US (4.5 solar hours) installing at the US rate would give you electricity at 26.3 cents per kWh which is not a good price. If we could get our installed prices down to what Germany pays your electricity would cost 12.8 cents per kWh.

Now 12.8 cents might not sound wonderful, but consider that you will have locked in that 12.8 cents for the next 20 years. The price of electricity is likely to increase, at least due to inflation.

And after that 20 years is over you’re looking at a few decades of free electricity.

Panels are already pretty good, price-wise.

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No subsidies were used in any of the above envelop scratchings.

http://www.nrel.gov/technologytransfer/ss_inexpensive_cells.html

As the prices of panels falls then shipping becomes a bigger part of the total cost. It’s more likely that we will manufacture the panels used here and China will manufacture the panels they install.

There’s not much low-skilled labor input in solar panels. And the cost of labor is rising in China.

Panels have already gotten so cheap that the big emphasis is now on the ‘balance of the system’ (BOS).

Bring on $0.10 / Watt!