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Published on January 27th, 2014 | by Zachary Shahan


Cost Of Solar 2 To 100 Times Lower Than You Think

January 27th, 2014 by  

Below is an article I wrote a few months ago for CostofSolar.com — the story is essentially the same today. In order to bring even more attention to this matter, I also commissioned the above video through Solar Love & CleanTechnica. Enjoy, and share with friends! People need to know how low the cost of solar now is.

What’s the cost of solar today? Well, it depends a great deal on where exactly you are located, but no matter where you’re located, I’d bet that most of you have a cost of solar in your head that’s 2–100 times greater than the actual cost of solar power. Read on for an explanation….

One of the things I majored in for my bachelor’s degree (a long time back) was sociology. I think one of the key lessons I learned in those four years was that we are not exactly rational beings (okay, I guess I had a sense of that beforehand). Societal theories and economic models based on the idea of humans making completely rational decisions simply don’t work. There are a lot of different reasons for this, but one huge one is that we often don’t have all the information we would need in order to make a rational decision.

In a related manner, something I’ve learned in my several years reading and writing about clean energy is that the average person has a price of solar power or price of wind power in their heads that is at least a few years old, sometimes even many years old.

No criticism from me — I know how busy modern life is! It’s often hard to make time even for the essentials. If you’re not working and living in the clean energy arena, you probably don’t feel like you have time to practice your clean energy free throws (i.e. keep up with the price of different energy technologies).

But energy is a huge deal. It’s most likely a big portion of your monthly expenditures. And it has a transformational effect on the world we live in. But we won’t get into all that today — let’s get into the fun stuff! I’m going to catch you up on some tremendously awesome news about solar power.

First, however, to make one of my points, I need to give you a short briefing on some wind power facts. (I know, this is getting complicated — just stick with me.) On average, a Bloomberg New Energy Finance study has found that people think wind power is about twice as expensive as it actually is.

Unfortunately, I’m not aware of a similar study on solar power. But I think this is still very useful for solar power for a few reasons. To get to those, we have to ask, “Why do people think wind power is so much more expensive than it is?”

From my experience covering this topic for years, I have a few ideas:

  1. Wind turbine prices have fallen 29% since 2008, and about 50% since 1990. Very possibly, people simply have an outdated price of wind power in their heads. It’s quite logical — if they heard the price of wind power 10 years ago but haven’t kept up with changes in the industry, they simply have that one price in their heads.
  2. There’s a lot of bashing of renewable energy by certain politicians and media agencies. In particular, one of the most repeated claim is that “renewable energy is too expensive.” For those tied to the coal, natural gas, and nuclear industries, this falsehood is key to their own financial success, because everyone knows that wind and solar power are popular with the masses, and almost everyone knows they’re clean and good. The only hope for these dirtier industries is to try to convince people that clean energy is more expensive… even when it’s not.

However, the even bigger news is that the two points above apply to solar power even much more than wind power!

Solar power prices have fallen off a cliff in recent years. Check out these graphs:

cost of solar dropping fast price of solar

Image Credit: Unknown. Data Credit: Bloomberg New Energy Finance (BNEF)

California solar cost of solar

Yep, if you have a 1977 price of solar panels stuck in your head, you think solar panels are 100 times more expensive than they actually are. If you have a year 2000 price of solar panels stuck in your head, you think they’re about twice as expensive as they actually are. Even if you have a 2008 price of solar panels stuck in your head, that’s about 80% too high. And, actually, even if you have an early 2012 price of solar panels in your head, that’s about 20% too high!

Did you get a solar quote back in 2008? If so, it’s probably quite a bit higher than it would be today. Maybe it’s time to check again?

But while we’re at it, let’s not forget the political and media coverage. Either through simple lack of awareness, or something more nefarious, many politicians and members of the media repeatedly assert that solar power is “so expensive.” They’ve got outdated information in their heads. Don’t listen to them. Check the numbers for yourself. And, very importantly, share this information with your friends and family so that they are not tricked by outdated information and misinformed media professionals and politicians.

I think the points above are quite interesting and informative. But there’s a lot more to say about the cost of solar. Stay tuned to our site (Cost of Solar), as we’ll be delving into that much more in the days and weeks to come.

Join the US solar power rooftop revolution!

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About the Author

Zach is tryin' to help society help itself (and other species) with the power of the word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as a solar energy, electric car, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don't jump to conclusions.

  • Guest

    RE: Solar costs have been decreasing exponentially from almost $100/W in the 1970s. Today, total costs of solar installations vary from $3/W to $1/W, depending on altitude and longitude, including cities and rural areas, and size, including utility-scale, commercial, and residential sites. Continuing with the exponential decrease of costs, combined with the exponential increase of production, it is foreseeable that in the next few years it will cost less than $1/W to install solar power anywhere, including storage costs.

  • I’ve seen residential PV prices go from $9.00 per watt installed in 2007, to $3.75 per watt in 2015. Utility PV from $7.00 to $2.50 respectfully. I believe that the 2015 numbers that say 3$-1$ doesn’t include the BOS of the system, or the labor, and cost to acquire the customer into account. The premise is fantastic we really are experiencing a revolution in terms of financial parity with FF! No need to lose credibility on incomplete numbers.

  • ralfyman

    We need to look at energy cost.

  • James Van Damme

    I just spent 2 weeks vacationing in Hawaii and talked with some regular folks on Molokai about their home energy bills, which are higher than mine in New York even though they have no heat or A/C. If I was 20 years younger I’d have a solar water heating and PV business there. And I have no idea why they dry macadamias and coffee using propane barged over from California when God sends them all that sunshine.

  • David Fuchs

    The spot price on PV solar has gone to about half the 74 cents the panel-chart shows.

  • ronwint

    So why are so many consumers rushing to lease solar systems, when they can purchase the same system for less than 1/3 the cost of a $0 down solar lease ? Not to beat a dead horse but if you’re paying more than $3.00 a watt before incentives for an installed, high quality solar system on a concrete tile or composition shingle roof, then you’re probably paying too much in today’s PV market. Shop before you sign that 20 year airtight contract. You can save thousands even tens of thousands by buying instead of leasing.

  • jonbohmer

    This is module prices, not complete system prices. BOS has not dropped nearly as quickly as modules.

  • wattleberry

    Most people have been conditioned, quite sensibly, to assume that, if something sounds too good to be true, it very likely is.
    The qualities of renewable energy, in a world where we have been raised to expect that one day the raw materials will be used up on a remorselessly decaying planet where the best we can contemplate is an orderly management of that decline,rather like our own mortality, are viewed in that way, hence the unjustified scepticism.
    It will change, and blogs like yours are helping to speed this up, thank goodness.

  • JamesWimberley

    The confusion is helped by the fact that unlike Moore’s Law, which reliably delivers faster computer chips year on year, the experience curves for wind and solar are quite bumpy. Solar in particular has boom-and-bust cycles superimposed on the trend. Prices stagnated in the first half of the 2000s, then crashed. They are at present flat, as demand picks up and manufacturers restore margins (headline: solar industry hits cost floor and price cuts are over!). If history is any guide, they will rush to buy new plant in 2015-16, leading to another glut and price crash in 2017-18 (headline: solar industry in deep trouble, is it the end of the boom?).

    People are innately bad at detecting trends hidden in cycles. Look at climate denialists, always cherry-picking the data to hide the trend,

    • jeffhre

      “(headline: solar industry in deep trouble, is it the end of the boom?)”

      Great next headline! When the installers are booming with growth and more installations they can handle, it seems as though a preponderance of media outlets decides this is the headline to run with. Again convincing millions solar is a loser, despite the fact that “flat prices” equal 20% lower costs, and installations that are consistently increasing by double digit numbers.

    • just_jim

      If you look at the history of memory prices, it was more an appearance of faster/cheaper than actuality. Price plateaus for memory were more the rule than the exception for example, but that didn’t keep memory from going from $50/megabyte to less than $1/gigabyte from 1990 to 2013.

      What we’re seeing is the same exact thing with pv solar prices.

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