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Published on December 8th, 2011 | by Joshua S Hill


Solar Power Less Expensive than Analysts Purport

December 8th, 2011 by  


(Editor’s note: this is NOT even taking health, energy security, and environmental costs into account — not what this study is about — and it STILL finds that solar has reached grid parity in many places!)

The real cost of implementing solar power is being deliberately hidden from the public according to a study conducted at Queen’s University in Canada.

“Many analysts project a higher cost for solar photovoltaic energy because they don’t consider recent technological advancements and price reductions,” says Joshua Pearce, Adjunct Professor, Department of Mechanical and Materials Engineering. “Older models for determining solar photovoltaic energy costs are too conservative.”

In addition, Dr. Pearce is certain that solar photovoltaic systems are near a ‘tipping point’ at which point they will be able to produce energy for approximately the same price as traditional sources of energy, and are at that point in places.

“It is clear PV has already obtained grid parity in specific locations,” according to the study, “and as installed costs continue to decline, grid electricity prices continue to escalate, and industry experience increases, PV will become an increasingly economically advantageous source of electricity over expanding geographical regions.”

When analysts attempt to determine the cost of solar photovoltaic systems, they include the costs of installation and maintenance, finance charges, the system’s life expectancy, and the amount of electricity it is able to generate.

However, Dr. Pearce notes that studies currently out there are simply ignoring the 70 percent reduction in the cost of solar panels since 2009.

Another key point Pearce and his team brought up is that the lifetime of a solar installation is far longer than 20 years (what has been used in previous LCOE analyses). Pearce says, ““we should be doing our economic analysis at least on a 30-year lifetime.”

Additionally, Dr. Pearce says that research now shows that the productivity of top-of-the-line solar panels only drops between 0.1 and 0.2 percent annually, rather than the much higher 1 percent drop used in many cost analyses.

Ignoring system and installation costs — which Dr. Pearce notes can vary widely — equipment costs are determined on dollars per watt of electricity generated. One study released in 2010 estimated that the equipment cost of solar photovoltaic systems was $7.61, while in 2003 another study set the amount at $4.16.

According to Dr. Pearce, the real cost is now under $1 per watt for solar panels purchased in bulk on the global market.

Source: Queen’s University
Image Source: Living Off Grid

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About the Author

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.

  • JONK

    I believe that when other studies say equipment costs are between $4.16-7.61 they mean the cost of the panels, wires, inverters, disconnects, etc as well.

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  • Fred

    Yes solar panels are now under a dollar for house roof quantities.

    Solar buzz absurdly uses one off retail prices and only for very large panels. And they assume batteries storage for residential. Why?

    Note the people who still can’t believe solar panels cost around 1$,


    Since 2006, First Solar has come on very strong. Its 2010 world market share, as measured by installed watts, was 8% due to its low cost per installed watt (about US $2.50) ”

    And that was 2010

  • Rob

    Better to temper the enthusiasm slightly lest you be dismissed as a renewable energy evangelist. The statement about wholesale solar panels being less than $1 per watt are also somewhat misleading because whilst true you don’t install wholesale solar panels on your roof or in a utility array farm and magically export power, there are balance of system costs and it is accepted that the panels represent 35-40% of the balance. Also individuals have trouble accessing wholesale rates. Finally whilst the panels themselves are seeing 30-50% year on year cost reductions the remainder of the system is not falling at anywhere near that rate. The real world reality is that the panels cost $1.50-$2 and a complete system $3-$4.
    Whilst I agree that $7 plus represents very outdated information, exaggerating the cost improvements just leads to individuals feeling mislead and driven away from the technology. Such feeling are not always rational and these people will often continue to reject further consideration of solar for many years despite annual improvements in price often bringing costs down below grid parity within a short time of initially exploring the subject.
    Possibly the most important message to get out there is the cost improvements over time, advocating the message that if people look into solar and find they cant quite justify it on economic grounds at that point in time to check back every 12 months or so because as prices fall and electricity rates rise it soon will in the majority of locations.

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  • Guest ML

    Joshua, loved this – thanks for posting the article. Some comments generated on Facebook from a share received retorts such as what I have pasted below. I would love to see your response, and hopefully blast these people out of the water. I am neither eloquent or intelligent enough to enter into discussion.

    a) the article claims research is being hidden. I submit that in 2011 if such research exists it could easily be reported;
    b) This is the most ridiculous assertion I have heard about solar. With the majority of mainstream press decidedly pro green energy any reporter/journalist could do a story on this and provide some proof on the true costs. Furthermore the only costs that matter are the costs that consumer have to absorb;
    c) Who says? Stockholders? Pension Funds?… The ads we see about every other segment?

    • Anonymous

      These comments/questions are a little off-topic or completely misguided.
      A) it’s not an issue of research being hidden — it’s an issue of cost analyses not using up-to-date info.
      B) 1- the mass media is far from a solar cheerleader. for anyone who follows the subject, this is painfully clear. 2- this is not even about externalities, another point that people SHOULD take into account since they do pay for health problems and such — this is very specifically about “at-the-register” costs.
      C) I’m not even clear what this one is referring to. Did they read the article? Or just look at the headline?


    What about Concentrating Solar Power, Parabolic Trought, Central Tower or Stirling Dish Power?

    • Ed

      All of the systems that you mention are surely to be the future of “concentrated” base load electrical power generation. The problem is that with the resistance from vested fossil interests and legislators there are few organizations will to invest the money needed to bring those sensible systems into existence.

      However, PV Panels are available to individuals who see the true value of solar power and can be incorporated into their lives for a minimal expense. If you do a quick search for solar powered houses on YouTube you will find examples of people who are using solar power TODAY.

      I look forward to the day when all of our electrical power comes from the sun (even though fossil energy, coal and oil are solar power) and the folks who cannot avail themselves of PV panels can enjoy “green electricity”


    • Anonymous

      The price of PV solar (solar panels) has fallen so very rapidly that it has taken the price of electricity from PV below what other solar approaches can produce. Some of the planned solar thermal sites are being converted to solar panel arrays.

      The largest solar thermal, BrightSources’s Ivanhoe plant is getting heat storage added. I suspect they have determined that they cannot compete when the Sun is out but can make money selling power into late afternoon/evening peak demand hours.

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