Cost of Solar Power Competitive with Coal Some Places, & Dropping Fast

At Bloomberg New Energy Finance’s annual conference in New York this week, industry executives and representatives indicated that solar power installations are going to continue growing rapidly and the cost of solar, which may soon be competitive with the cost of coal in general, is low enough in some regions that it is already competing with coal.

Solar Power’s Dropping Costs and Cost-Competitiveness

“Large photovoltaic projects will cost $1.45 a watt to build by 2020, half the current price,” Bloomberg New Energy Finance reported. However, already, in sunny regions like the Middle East and California, “solar is viable against fossil fuels on the electric grid.”

“We are already in this phase change and are very close to grid parity,” Shawn Qu, chief executive officer of Canadian Solar Inc. (CSIQ), said. “In many markets, solar is already competitive with peak electricity prices, such as in California and Japan.”

While some might look at often-cited general costs of different energy sources and claim that solar is still a far way off, others note that such general figures are not always the best thing to compare.

Comparisons often overstate the costs of solar because they may take into account the prices paid by consumers and small businesses who install roof-top power systems, instead of the rates utilities charge each other, said Qu of Canadian Solar.

“Solar isn’t expensive,” he said “In many areas of the solar industry you’re competing with retail power, not wholesale power.”

Solar Power Revolution in Process

Better technology and more streamlined manufacturing processes are consistently bringing the cost of solar down and increasing solar installations and growth, as we report here on CleanTechnica nearly every day.

“The most powerful driver in our industry is the relentless reduction of cost,” Michael Liebreich, chief executive officer of New Energy Finance, said at the New York conference yesterday. “In a decade the cost of solar projects is going to halve again.”

This is more or less inline with what U.S. Energy Secretary and President Obama have been calling for and what the Solar Energy Industries Association (SEIA), Clean Edge and others have been projecting.

Solar manufacturing capacity has nearly quadrupled since 2008 and it is expected to double by 2013 (from 18.6 gigawatts in 2010 to 32.6 gigawatts by 2013).

“System costs have declined 5 percent to 8 percent (a year), and we will continue to see that,” SolarCity Inc. CEO Lyndon Rive said.

Solar is not a pipe dream; it is a real, significant energy source of the near future, and in some places, of the present. Don’t forget, as Susan was apt to point out awhile ago, just because the base cost of solar is projected to drop significantly in the coming years doesn’t mean now isn’t the time to go solar. In many places, government support for solar already makes it far and away the best option for your home. Check out the solar incentives available in your area and how long it might take you to earn your money back on a solar installation.

Related Stories:

• Solar Power Blowing Up in the United States
• International Solar PV Nearly Doubled, PV Growth Doubled in 2010
• Cleantech’s Revolutionary Growth & Expectations for Coming 10 Years
• When You Shouldn’t Buy Solar in California

Image via SEIA