Solar Power’s Massive Price Drop (Graph)

May 24th, 2013 by Zachary Shahan

Here’s another excellent cleantech snack for some Friday Fun. Thanks again to an active CleanTechnica reader and commenter for passing it along:

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Tags: cost of solar, cost of solar drop, cost of solar graph, Solar Costs, solar power price, solar power price drop, solar power price graph, solar price graph

About the Author

Zachary Shahan spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.

http://www.facebook.com/people/Per-Lyngemark/627642641 Per Lyngemark

News today on Digitimes is that PV panels from Taiwan will increase to 0.43$, which is about half the price than the 0.73$ shown for 2013 above. I’m quite confident we will see prices below 0.2$ by 2015
- Bob_Wallace
  
  No, that’s a price for cells, not panels.
  http://www.digitimes.com/news/a20130523PD209.html
  
  $0.43/watt is the world average spot price for cells, low is $0.34/watt.
  Average spot prices for panels are $0.65 (thin-film) and $0.73 (silicon).
  http://pvinsights.com/
jburt56

Production and installation has to grow to 500 GWp per year to get to a 1% per year increase in solar’s share of total energy use.
- Ross
  
  Wouldn’t that be a growth rate of 10% per year?
  
  The total worldwide electricity generation capacity is about 5,000GWp.
  
  http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=2&pid=2&aid=7
  - jburt56
    
    Solar’s capacity factor is about 30% so you have to multiply by about 3. The world uses about 17 TW so you need 50 TWp of solar => 500 GWp is 1%. Talking total energy, not just electricity.
    - Bob_Wallace
      
      30% is too high for solar. For rough back-of-envelop math 20% is about right. And that probably assumes that a lot more solar will be installed in places which have the best insolation.
      
      In the US there’s only one small spot that gets a 25% capacity rating. A ‘best guess’ number for the lower 48 is probably 19%.
      
      http://www.wholesalesolar.com/Information-SolarFolder/SunHoursUSMap.html
      - jburt56
        
        Then multiply by 4 so we’ll need more like 65 TWp. However, you also have to consider North Africa, etc. which will have higher factors. Tracking also.
      - Bob_Wallace
        
        I can’t predict at the North Africa, sort of level.
        
        Solar is likely to get very cheap. It’s likely to be so cheap and easy to incorporate that we’ll may see it being installed in places with fairly low insolation.
        
        Even a place that doesn’t get a lot of sunshine may find that they have a big need to power AC as summers heat up.
        
        Or we may see massive amounts installed along the equator and UHVDC lines shipping power toward the poles.
        
        I suspect tracking will get priced off the table. It may make more sense to install panels facing east or west to extend the solar day. At some point it may be cheaper to give up 20% than to track.
        –
      - http://richi.co.uk/ Richi Jennings
        
        we may see it being installed in places with fairly low insolation.
        
        – We already are, unless you think Germany and England get loads of sunshine.
        
        At some point it may be cheaper to give up 20% than to track.
        
        – The experts I talk to argue it already is cheaper — assuming you calculate the lifetime costs of the tracking system, not just the initial capital cost.
      - Jau
        
        The way things are heading, it should soon make sense to install solar panels instead of roof-slates on the whole roof on new building.
        
        My guess is that soon buildings will be built with roofs that are designed to get as much sun as possible during the day to make the most out of panels on the roof.
        
        Tracking means mechanical parts that need to constantly move(And thus break over time). They are also much more vulnerable to wind. Don’t think that is viable in other scenarios than in solar farms.
Pieter Siegers

Great graph! Now let’s hope the EV follows the same curve as the product evolves; I think supercapacitors could give a huge boost
- Jau
  
  I live in Norway where EV’s have become very popular due to the high registration-tax on regular cars paired with a total tax-exempt on EV’s.
  
  I see several Model S, Leaf, Miev etc every day, and the prices on electric cars have fallen quite a bit – especially after Leaf came out. (The most popular model, followed by Model S). It have happened several times that when there is a new model, it’s priced so that the others have to lower their prices aswell.
BigB

Now if we could get the graph for stored KwH for transportation that would be great
- vetxcl
  
  You’re trying to say something , but don’t show the courage to state it plainly.
Taody

Doesn’t this just reflect the massive increase in manufacturing in China and the dumping of these panels rather than any sort of technology advance?
- Ronald Brak
  
  No. Firstly there is no incentive to cell solar PV below its marginal cost as that is an automatic money loser. Secondly, even if there was a nutty scheme to sell below marginal cost to attempt to “corner the market” in a product where whoever has the newest production line has the larget cost advantage, Germany, Malaysia, the US, etc. would have stopped their production if they were doing that. Australia certainly wouldn’t be importing a lot of German panels. (All this is not to say Chinese manufacturing has not played a great role in lowering prices.)
- Bob_Wallace
  
  One of the lowest cost producers is First Solar, an American company which makes thin-film solar.
  
  Present prices are fairly close to cost of production. Companies aren’t making much money at the moment.
  
  There were too many manufacturers (around 650) and right now there’s a shakeout in which the least efficient are failing. It is expected about 150 will go out of business. Companies are selling close to production cost just to stay in business.
  
  This is something that typically happens in emerging technologies. A point is reached where the less efficient are forced out and the survivors make less profit per unit, but more money because of volume.
  
  Predictions are that prices will stay about here for the next year or two and then start falling once more. First Solar thinks they will be able to cut their present cost by 1/3rd by 2017. I think the number they gave was $0.42/watt.
- vetxcl
  
  “Dumping” as you refer to it was stopped – NOT that you’ll admit it.
- vetxcl
  
  Stopped back in Twenty TWELVE. The Chinese don’t like it, but that’s tough.
  
  http://blogs.voanews.com/breaking-news/2012/05/18/china-rejects-anti-dumping-tariffs-on-solar-panels-2/
Kyle Field

While these may reflect the wholesale price of panels…or maybe retail adjusted for govt incentives, I would really like to see “avg retail price of panels” with actual retailers behind the numbers. I had previously seen numbers around $.50/watt and when I took that to the “bank”, I was still seeing numbers around $1.18-1.50/watt which is not too far off where they were a year ago (online at least). I would like another 12 panels at $.75/watt
- anderlan
  
  Solar Systems USA dot net.
- Matt
  
  Kyle, what a great idea! I look forward to seeing you chart. Pick say 12 regions and give final cost (after government, utility incentives). Say 3 lines for each region based on size. Maybe an animated like on gapminder.
- vetxcl
  
  You could really save some time and money couldn’t you? Took me all of one hour to check all that online and the savings are somewhat worth it.
Corbin Holland

Is this the price for just the panels or the whole system?
- Kyle Field
  
  Just for the panels. From there, the options for installation impact the price – single inverter/system, micro-inverters, grid connected vs stand alone, etc…
- yu tube
  
  Not even panels just the cost of the solar cell. Assembled into panels cost goes up, installed, even higher. ($3-5/W?)
  - Bob_Wallace
    
    Germany is installing for an average price of $2/watt.
    
    A new large array was just installed in the UK for $1.60/watt.
    
    US national average installed system price was $3.01/watt. Residential – $5.04/W, non-residential rooftop – $4.27/W and utility sized systems $2.27/W. Fourth quarter, 2012.
    
    By the end of this year I would expect utility scale to drop below $2/watt. Prices are falling fast.
    - RobS
      
      Australia is below $2 per watt residential Installed, and that’s with $0.28/Kwh power tariffs, welcome to the future.
      - Bob_Wallace
        
        That’s good news. Any site that tracks AU solar prices?
        
        I’d like to add something to my data collection.
        
        I think the more information like this we can make public the quicker prices will come down in other places.
        
        “If they can install for less than $2/W in Germany, Australia, the UK, and … then we should be doing that here.”
      - RobS
        
        Solar choice.net.au has a blog which includes a monthly price survey, here it is for may
        http://www.solarchoice.net.au/blog/solar-pv-price-index-may-2013/
        Shows an average nationwide price of $2.06 per watt for 3kw systems, $1.99 for 4kw systems and $1.88 for 5kw systems
      - Bob_Wallace
        
        Thanks. What’s happening in Hobart that’s making prices rise?
James Wimberley

Fun, but not very enlightening, as the information impact is dominated by the early years, with big price drops applied to tiny quantities. The log graph of the learning curve is the useful one.
- Bob_Wallace
  
  Lots of people don’t understand log graphs. They can see that prices continue to fall in the above graph.
  - Matt
    
    Yes, you almost need to do a second graph from 1990 to today so that the continued drop is more visible. And yes most people don’t understand log graphs.
    - RobS
      
      Agreed, the whole poi t of a log graph is to condense large changes so that they visually appear smaller, the exact opposite of the point of this graphic. I agree that the simplest thing is to a picture in picture graph arrangement with a second graph showing the price movement since 2000.
      - jalbertini
        
        To most non-technical folks this graph is meaningless. People pay for electricity in $/kWh. $/watt is a a foreign concept. You need to translate $/watt into $/kWh.
      - Bob_Wallace
        
        I suspect most people caught on very quickly.
        
        After all, it is quite clear that it is the price of solar panels and almost everyone know what they are.
      - jalbertini
        
        That may be but most people will not understand how to equate panel watts to what they are paying now per kwh.
      - TedPV2013
        
        $ per W of solar array capacity is the correct way of stating how much a solar array costs to purchase and install per watt of peak capacity of the array.
        
        $ per kWh is generally used to describe the cost of electricity from a utility and is a consumption measure and depends on factors, such as your location and roof orientation, that even for an identical system with the same $/W installed price will differ across the country.
        
        If you want to purchase a 5000W solar system and it costs $15,000 to buy and install then it cost $3/W installed. That is a very meaningful metric to compare solar system prices and how they have changed over time.
      - jalbertini
        
        While that is entirely true it does not help anyone understand what their net cost of electricity is. I know about system performance variation due to location etc. but would still like to be able to translate.
        
        If this system generates 10 Kwh per day and amortizing the $15,000 cost over 20 years @ 4% that’s $91/month for 300 kwh or $0.30 per kwh or about double my utility rate. If it generates 20 kwh per day then it is $0.15 per kwh close to my utility. I use about 15 kwh per day now and my bill runs about $75 so I’d be “losing” $16/mo ($91-$75) unless I could use a smaller system that cost less or I sold excess to the utility.
        
        Of course the utility bill breaks out generation from transmission & distribution with each being about 8-9 cents/kwh. So if I’m grid tied and net metered I’d need to get the cost down to under 10 cents/kwh to break even with the utility.
        
        I’m just hoping to find a way to compare apples to apples because that is what most people will consider: their cost per month for power. I guess that is too complicated for manufacturers/dealers/installers to calculate without site specific data? So consumers will be left guessing – not a good situation for selling.
      - Jau
        
        The thing with solar is that it can change quite a bit even locally if there are any obstructions – say a tall tree that makes a shadow on the panels part of the day.
        
        The price of electricity also fluctuates troughout the day. It’s most expensive in the morning and afternoon/evening, and cheapest at night. It also varies with weather. With a grid-tied system you sell electricity in the daytime – although the bulk will not be at the peak hours. -Unless it’s pretty hot and people run their AC-units and bring up the price.
        
        A good start would be to check how the picing trough the day and night is where you live.
        
        Guess it would make sense if someone made a small and cheap “test-panel” with logging, that you could mount on your rooftop as a reference to the amount of electricity that can be made at that specific site trough the year. -Although it seems like with the rate of decline in price, the need for analyzing the site will be moot in the near future, unless electricity-prices takes a hike.
  - vetxcl
    
    YUP, prices falling IS a good thing. I leave nit picking to the pickers.
- vetxcl
  
  IF you mean more significant price decreases occurred early on , THEN yes. But the time frame of the graph is evenly spaced so there’s no skewing of results, by posting more yearS early on.
Marshall Harris

Now to show this graph on Fox News.

Just kidding, that’ll never happen.