Clean Power

Published on December 5th, 2015 | by Zachary Shahan

127

Solar Power Prices Already Low — Are Breakthroughs Even Needed?

December 5th, 2015 by  

A few months ago, I wrote a piece for GE Look Ahead, a project of The Economist Group, about the future of solar energy — particularly, costs and how “breakthrough” technologies could play into the story (or not). For the piece, I interviewed some of the leaders in the solar energy research realm. An initial draft of that article is republished below, along with an addendum from later conversations with Varun Sivaram, a former Stanford researcher who has led some important research on perovskite solar cells. Varun actually disagrees with the take-home message of the original article, so be sure to read the addendum for his thoughts as well.

Hardly a day goes by without an announcement of another “breakthrough” in the labs of solar cell and solar panel researchers. From organic solar cells to multi-junction solar cells to black silicon to perovskites, there are many options beyond simple crystalline silicon solar cells that are exciting scientists in universities and research labs around the world. But what kind of a future do these competing options have? Will any of these new materials bring about a “next-generation” solar era?

It’s all about price, of course. How cheaply can these various options produce electricity? How cheaply will they be able to produce electricity in 10 years?

First, we need to start with the currently dominant technology, its price, and its price trend. Within the past 18 months, we’ve seen record-low solar price bids and power purchase agreements for 5.84 cents/kWh in Dubai and then under 4 cents/kWh (or 5.71 cents/kWh excluding subsidies) in Texas. We’ve seen prices cheaper than electricity from coal, natural gas, and nuclear energy in many other parts of the world as well. [Update: the low-price record is now down to 2.42 cents/kWh.]

price of solar power drop graph

Fall of crystalline silicon photovoltaic solar cell costs from 1977 by Bloomberg New Energy Finance. Note that the price is even lower today.

The solar power experience curve since the 1980s has been pretty clear. As Jenny Chase, Manager of Solar Insight for Bloomberg New Energy Finance, told me, “The learning rate is about 24.2%, ignoring the 2004–2008 divergence due to serious supply-demand imbalances.” Solar panel prices have dropped approximately 100 times over since the late 1970s. Jenny and the team at Bloomberg New Energy Finance are convinced that the trend will continue. “Chinese multicrystalline silicon modules (the most common sort) are about 61 cents per W on the world market,” she stated. “We expect this price to drop to about 21 cents in 2040 just by incremental improvements in crystalline silicon technology (thinner wafers, better-shaped busbars, better AR coating, more targeted doping, better contact technology).”

Some of the recent drop in solar power prices has come from a shift to manufacturing in China and Taiwan, and some came with a couple years of production overcapacity, but most of the improvement of the last few decades has come from incremental improvements to solar technology efficiency and manufacturing. Jenny believes these things will continue bringing down the price of the incumbent leader (crystalline silicon). In fact, Jenny projects that the price per watt of a crystalline silicon solar panel will drop from 62 cents today to 21 cents in 2040, when it will still lead the market. The cost drop will come from “incremental improvements in crystalline silicon technology (thinner wafers, better-shaped busbars, better AR coating, more targeted doping, better contact technology).”

But what about perovskites, black silicon, multi-junction solar cells, and so on? While these are progressing in universities and research labs, it seems that they are not enticing enough to leading solar cell and solar module manufacturers to change their tack. “We are still very happy with first-generation [solar cells] and there is plenty room for improvement,” says Trina Solar’s chief scientist, Pierre Verlinden. If these alternatives were to become cheaper, the key is that industry would have to work with the researchers to get them to market, but industry doesn’t seem to be interested. Varun Sivaram, a perovskite solar cell researcher who has a PhD in physics from Oxford University, where he started examining the technology in great depth, writes, “when I talk to industry executives at major solar manufacturers and developers, very few have even heard of solar perovskites.”

In an interview with Martin Green, PhD, one of the world’s preeminent solar scientists, I noted, “In recent years, we’ve seen a 22% reduction in solar module prices with each doubling of cumulative volume.” He responded, “Actually, since the 1980s. Plenty of scope for incremental cost improvements to continue this trend.” He highlighted projected shifts in silicon solar cells that will keep bringing down the price of this technology. For example, he stated, “Industry is currently transitioning from Al-BSF to PERC cell technology that will allow mainstream cell efficiencies to increase over the next few years from 17-19% to 19-22% and perhaps on to 25%.” This falls in line with Jenny’s comments about how the cost of solar panels will get down to 21 cents by 2040. But none of it concerns perovskites, graphene, or other “breakthrough” materials. It’s all about improving on a dominant technology in what now seems to be a rather mature industry. “We no longer need a breakthrough to achieve one,” an anonymous and keen observer of the industry noted to me. That is the story in a nutshell.

Addendum: Dr. Sivaram and Dr. Green do believe perovskites could offer a cost-effective path to further improve the efficiency of silicon solar cells, specifically through a tandem approach in which the perovskite technology is layered on top of conventional solar cells, likely through the use of ink-jet printing. There’s hope that this could bring the average efficiency of commercial silicon modules from approximately 20% today to approximately 25% without adding a lot of cost. To get this to market will still take years, though, and it would be part of the gradual chipping away of solar costs rather than a shattering breakthrough. But Varun argues that it’s a necessity:

“In the near term, Chinese multicrystalline silicon panels will become more competitive with conventional generators. However, for solar to displace substantial fossil fuels in the long term, costs must come down by an order of magnitude — to pennies per watt, a level that is impossible for silicon to achieve. New technologies will be crucial to disrupt the economics of solar. In the near term, radical technologies like solar perovskite coatings can enter the market by literally piggybacking on silicon’s success through a performance enhancing coating on existing panels. And in the long run, the prospect of cheap, aesthetic coatings on windows and other building materials can transform the cost structure of solar to achieve truly widespread penetration.”

Your thoughts?

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About the Author

is tryin' to help society help itself (and other species) with the power of the typed 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, Solar Love, and Bikocity. Zach is recognized globally as a solar energy, electric car, and energy storage expert. 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.



  • Bob Joy

    Isn’t the argument that cost is the only issue so we no longer need a solar cell efficiency “breakthrough” ignoring the herd of elephants about to enter the room in the form of electric cars. It should be obvious to everyone that battery advancements will give us a 300+ mile range in 2 years or less in electric cars that most people can afford. The 280 mi range, incredible acceleration and almost total lack of required maintenance of my electric car means I’ll never go back to gas. We are all watching the equivalent of the first digital camera wondering what happens now to that $800 film camera hanging in our closet. Just one electric car can double household power requirements let alone two. All that load will be suddenly piled on top of an already overtaxed electrical grid. Unfortunately in the US we have an average roof size that doesn’t allow most homeowners to get off the grid no matter how many solar panels and batteries they buy. The inevitable conversion to electric cars will result in utilities desperately raising rates to fund grid improvements and homeowners desperate to get off the grid to eliminate killer power bills but unable to because 21% efficient solar panels won’t allow it. What more incentive is needed to justify pursuit of new solar cell technology?

    • Bob_Wallace

      The price of solar panels is now so low and efficiency so high that if no further improvement occurs we’re fine. We’re working our way to $1/watt installed utility solar. That gets us to around 4c/kWh which will be our second least expensive source of electricity. Wind is now under 4c/kWh and heading to 3c/kWh. Those are unsubsidized power.

      We can add all the capacity we want and at the same time lower our cost of electricity. Remember, the 3 and 4 cents are for the 20 years that the wind and solar farms are being paid off. Once paid off we should get 10 to 20 years more output from wind, 20 or more from solar. The operating costs for both are 1c/kWh or less.

      Our grid is not particularly overtaxed. There can be a bit of a stretch on the hottest of summer afternoons, but end-user solar will help bring down demand. We have enough spare capacity right now to charge 70% of all US cars and light trucks if they turned into EVs overnight.

      Homeowners wanting to install enough PV to charge your car? 13,000 miles at 0.3 kWh miles = 3,900 kWh per year = 10.7 kWh per day. At 4.5 average solar hours per day that means a 2.4 kW array, call it 3 kW to allow for charging loss, etc.

      • Bob Joy

        To say that we are fine with no improvement to current solar technology means “we” is someone with a big southern facing roof, gas heating, IC cars and grid access to get through the winter. Weaning ourselves from carbon fuels means clean energy available everywhere, all the time, including at night in the winter. To provide that globally, independent of an unreliable or non existent grid, we need an integrated system of solar cells, inverters and batteries all of which need to be much more efficient and affordable than what we have today. This discussion and most others I’ve seen, only looks at a cost comparison between solar and carbon power. It’s assumed that when a kilowatt from an installed solar panel matches the cost of a kilowatt from the grid, regardless of the panel & downstream component efficiency levels, our carbon dependency will resolve itself. That is tragically naive.

        This discussion deserves a much more detailed response with a lot of numbers to back it up which will take a little time. Stay tuned.

        • Bob_Wallace

          No, it means that efficient is high enough and price per watt is low enough to make solar one of our two cheapest ways to bring more power on the grid. Obviously higher efficiency and lower prices would be better but we’ve reached “good enough”.

          Onshore wind is also “good enough”. It’s now the cheapest way to generate electricity.

          We need cost improvements in storage and EV batteries. US homeowners need installed solar prices to drop.

  • Calamity_Jean

    Feel the Bern.

  • Jens Stubbe

    You do not need batteries to handle intermittency – anyone saying otherwise has switched their brain of and joined the hype. Just build out the grid with more HVDC lines and await the higher capacity factor that is possible for both solar and wind. When wind and possibly solar becomes cheaper build out massive over provision and start Synfuel production and you have a cheap strategy to keep all fossil fuels underground where they belong. Synfuel production provides a huge power consumption you can regulate to secure demand and supply match.

    If you take all batteries ever made, charge them up and connect them to the grid they could only sustain the grid 10 minutes or so.

    Electricity rapidly gets cheaper while the intermittency problem rapidly declines due to higher capacity factors for both wind and potentially also for solar. Even with the projected lowered cost of batteries the business of buying cheap power and selling or using expensive power is eroding and will not make a net profit. Batteries are for safeguarding vulnerable hospitals and other mission critical power users or for those who have the option and an economic rationale for grid deflection.

    • Gabor Pap

      I did not say you have to have a 100% backup. You can obviously manage to meet demand with a small buffer. I agree that synthetic fuels or fuel cells are a good way to store energy or convert to other use when the grid is saturated with renewable energy thus the spot prices drop to close to zero.

      I invite you to think about days when no wind is blowing or when whole regions are clouded over, in other words when there is no overcapacity big enough to meet demand. Obviously the answer is dependent on the geographical location, so I would not go as far as to write batteries completely down.

  • Jens Stubbe

    Jenny Chase has come up with a gloomy outlook for solar power.

    What the solar industry needs to focus on is capacity factor and LCOE.

    The current average installed utility scale solar installation can roughly double the capacity factor by chancing the ratio between module area and inverter capacity and by opting for double axis tracking instead of fixed racks.

    The efficiency of solar modules can nearly triple just by developing some of the interesting technologies already demonstrated and by adopting automated cleaning systems.

    Solar PPA’s could be expanded from the current 20 years to 40 years.

    First Solar has reported that they expect to bid for PPA contracts below $0.03/kWh before 2025 without subsidies. That seems like a good future for owners of full service solar companies – trouble (for shareholders) is that anyone else in the business can do the same. Double trouble for Jenny’s gloomy forecast is that wind power also can reduce cost and have loads of tech in every stage from concept to full scale test that eventual will lower cost.

    Average US wind PPA’s in 2014 was $0.035/kWh and one major Siemens expect to drop their cost by 40% before 2025($0.021/kWh), which is actually a big slow down in the cost drop seen over recent years.

  • Roger Lambert

    There are people here actually saying that the price of PV panels is already low enough. It is to weep.

    I seem to be the consumer advocate around here. I would politely suggest that it might be a good idea to look at the cost of renewables from the viewpoint of the average Joe, whose economic position is already vulnerable, a person with much trepidation to come as the **** hits the fan in fifteen years and prices for staples skyrocket.

    At least half of the people of this country live in badly insulated homes in latitudes where you can freeze to death at night during long winters. They are going to have to start heating their homes with electricity. How are they going to afford that unless electricity retail prices become much lower than they are now?

    These people are still allowed to vote.

    • Bob_Wallace

      Lower would be better.

      The overall cost of solar is due to costs that have not been cut nearly as aggressively as has the cost of panels.

      Withhold your tears….

  • Folatt

    Wasn’t Li-ion storage over Ni-Cd and NiMH storage a breakthrough?

  • Paulbee

    Even if solar were literally free, costs zero dollars, it still would need breakthroughs. Anyone can see that Even at $0.00 there is still little to Zero solar for Two-Thirds of the day, and at Zero dollars there may be way too much solar (overloads/burnouts) in the One Third of the day that it’s available.

    Yep, we need breakthroughs.

    • Bob_Wallace

      Oh, Paul, still pimping for overpriced nuclear aren’t you?

      When the Sun isn’t shining the wind is often blowing. Then there’s hydro, geothermal, biogas/mass, tidal and perhaps eventually wave.

      Nuclear’s too damned expensive Paul. Let that fact sink in.

      • Paulbee

        Sticking to the subject at hand, are you saying that we don’t need anymore breakthroughs, not even price of storage? Are you disputing any points I made? If you are disputing the points, on what grounds?

        I’d be happy to discus nuclear power if that were remotely related to the matter in this post.

        • Bob_Wallace

          A drop in storage price would not be a breakthrough. That would be business as usual. As volume scales up and companies search out inefficiencies prices will fall. EV batteries have fallen from around $1,000/kWh to under $200/kWh over the last few years with no breakthroughs. Very soon the price should be at $100/kWh and will likely continue lower.

          We don’t require a breakthrough in wind, solar or storage. Wind and solar are moving toward 3c/kWh which will make them by far the least expensive ways to bring capacity to the grid. We could build the grid storage we need right now with pump-up hydro for a affordable price and use the lithium-ion batteries we have right now for frequency regulation.

          Now, that’s not to say that breakthroughs wouldn’t be welcomed. Better is always better. It’s just that we have adequate and affordable solutions. If we had no technological improvements from here on we’d be fine.

          Nuclear isn’t related. It’s outdated.

          New nuclear runs 15 cents per kWh and higher. That’s about 4x the current cost of wind and over 2x the current cost of solar. It’s 5x or more what wind and solar should cost before a new reactor could be built.

          It just makes no sense to spend multiples more to get the electricity we need to replace fossil fuels. It also makes no sense to wait unnecessary decades to get fossil fuels off our grids while we build reactors. It makes no sense to leave those who follow us even larger nuclear waste problems.

          • Paulbee

            Bob, again the subject of this article was breakthroughs, and I am in the spirit of civility keeping my comments to such.While I disagree with you, I am resolved to stay on topic here. I will be happy to debate nuclear power with you at a more appropriate venue.

            Now, back to breakthroughs. It appears that the scientists working feverishly to improve battery technology are, thankfully, they are not being as glib as you. There is tremendous work being done to improve the capacity of batteries for both EV’s and for storage.

            The problem with your assertions is that if we want to turn off CO2 sources including both Coal and Natural Gas, the current battery technology will not be enough to store and supply all our energy, including energy reserves needed for unfavourable weather. We would certainly need massive storey high battery towers at current technology. The outlook is a lot better with future breakthrough battery tech. Remember we still need batteries for our EV’s too.

            Regarding over supply of electricity from PVs at noon etc. This is not speculation. If PV’s need to provide all the energy for 24hrs (say), then an overbuild is necessary to collect 24hrs worth of solar electricity in the span of 8hrs or so when the sun is out. There would need to be a greater overbuild to account for cloudy days. This overbuild will require a corresponding overbuild of storage,

          • Bob_Wallace

            We have PuHS for massive storage.

            We will almost certainly overbuild wind and solar. We overbuild almost all generation. Natural gas has a CF of less than 30% which indicates a massive amount of overbuilding. Coal has a CF less than 60%.

            France has even overbuilt nuclear. They turn off reactors for long periods when demand is low.

            Now, why don’t you stop trying to make a case out of a solar-only supply? That’s not what is done in the real world. Wind is likely to be the backbone of our future grid because the wind blows a lot of hours per day. Solar will serve as a peak supply because sunshine and being busy happen to occur at the same time.

          • Paulbee

            My dear Bob, as I said, and I say once again. I am merely responding to this specific article. The author as I read limited his comments to solar power. So did I.

    • Frank

      The grid can handle a lot of solar before it’s a problem. TOU pricing can increase that. Solar inverters can stop putting power on the wire if the voltage is too high. Wind and solar complement each other. And the batteries are already getting installed. If the prices continue downward, then you will see a lot more. Also there are some solar plants that are hybrid PV and solar thermal with storage. That is dispatchable. CA hit 6GW solar production this summer. Was there a problem?

  • neroden

    Breakthroughs are not needed.

    However, it’s worth noting: I’ve seen a graph with cost-per-watt curves (cost vs. year) for a number of different technologies. They’re *all* going down at the same rate.

    So what will happen is that single-junction silicon will hit a wall: it won’t be able to get cheaper. This will cause a *pause* in the “solar gets cheaper” story. Multijunction will keep getting cheaper and will eventually get cheaper than single-junction, and then we’re back to “cheaper and cheaper” for another decade or two.

    • No real disagreement there. However, I think relatively simple silicon PV is likely to be unbeatable until ~2030. After that, maybe something will start to compete, but at that point, it’ll be next-gen solar competing with solar & wind. What else could be cost-competitive at that point?

      • neroden

        Absolutely agreed, although I hesitate to predict a specific *year*. A bunch of the tricks being developed to make single-junction silicon PV cheaper and more efficient will apply to most of the other designs as well, which could accelerate the changeover point.

        • Yeah, I know, didn’t even like putting ~2030 in there. That’s the year BNEF has forecast till, and I trust their research and opinion, so I just stuck with that year. But that’s actually a bit too far out for my comfort. 15 years is a looooong time. 😀

          • Riely Rumfort

            Remember, this was a cutting edge Cell phone 15 years ago.
            I’d suggest closer to 10.

          • Ross

            That’s still my phone. [only joking a little]

      • JamesWimberley

        Martin Green’s guesstimate of the shares of different silicon pv cell types: http://reneweconomy.com.au/wp-content/uploads/2015/07/perc-solar.jpg
        Green invented PERC, so he may have a little bias in its favour, but he has a terrific track record and works closely with the industry to make things happen. The Si-tandem includes perovskite-on-silicon. The graph is normalised to 100%; since the total is growing fast, the absolute volumes of everything will shoot up, except possibly for the plain vanilla current type at the bottom.

    • Riely Rumfort

      If installation cost don’t inflate the cost per/kWh to the point the panel only makes up 20% of total cost it’s a much different story.
      Say the poor can afford a panel, and have all the time/effort in the world for self-installation, say inverters and batteries become far more affordable, say space isn’t an issue. Then suddenly the price per/kWh becomes front and center again, yes that is a great deal of assumptions and what ifs, but I could see a 50cent all-in-one plug&play(inverter built in) 18% efficiency panel hitting in a few years, then the parameters change, as does the customer base and therein the business model.

  • S Herb

    The only way to out-compete silicon is to find a technology yielding module efficiency of 30% or greater with reasonable cost and multi-decade longevity. Higher yield per area would be a fantastic plus but it must retain the robustness of silicon. The Peroskitians are not there yet; maybe the system with a layer on silicon has a chance.

    • neroden

      Various research designs already have module efficiency of 40% or more and multi-decade longevity. They’re just expensive. I expect costs to come down over the years.

      • Dr Green didn’t seem to have much faith in multi-junction costs coming down, nor basically any other high-efficiency option beyond incremental improvements like PERC efficiency and potentially tandem perovskite-silicon solar cells.

        • neroden

          I don’t know why he didn’t expect costs to come down. They have been coming down. They just started so much higher that it’s like watching the 1970s prices for single-junction silicon.

  • Riely Rumfort

    As much as the gradual path must be taken in the current, a steady advance of price declines at it’s side, the next step is Required, not an excessive luxury.
    As the stats indicate runaway landslides of acceptance may very well take decades, Decades WE and all Earthlings cannot afford. Decades the nature abound cannot digest, decades the future of man can’t yet protest. Unpredictable outcomes it’s best not to test, dried out, toxified bodies the past set to rest. A current cancer which needs a swift cure, by current answers and logic more pure.
    What I’m saying is delay of change, squandered potentials, a steady business as usual, incremental, expectant paths left to big players will trample generations to come. Trample in ways very few can predict and even fewer envision. Stagnation in good enough, will not be enough. You can do the numbers all day, you can set a mark to meet, but do you know the tribulation on the course, can you excuse collateral, products of half measures.
    The hour glass full of ice cascades by the second, spurring unforeseen consequence, avoidable futures.
    Do you know the breaking point, how vast the impact?
    Do you foresee the hurricane, the tornadoes, the flesh under rubble?
    Do you know the resting state of Earth, the patterns of the Sun, the frosts, the hunger, the desperation, the Ice Age?
    Can you afford confidence, can the children you raise sleep sound with your daily procrastinations?
    Will your lack of fear become their nightmare?
    Until you can answer the questions, you must keep seeking answers, solutions to pollutions.
    Contention is death, ignorance pain, arrogance folly.
    Don’t drive in the fog of false security, the lack of vision may cost you more than you can imagine.

  • Ian

    Solar, especially distributed solar, is a different beast than wind and all the incumbent technologies, and it has some very strong market advantages that should propel its success further and faster than people realize; namely its scalability and distributed nature. This allows it to create new markets for electricity that are not now served. For example, 75% of Mongolian nomadic herders now have solar. It’s going into places where the central grid isn’t reliable, like much of the third world and conflict zones. This scalability and distributed nature of solar also means that you don’t have to be an enormous billion-dollar corp to build a power plant, which opens solar up to millions of small, local investors. It means that utilities can plan for expansion in small, conservative, low-risk steps rather than committing themselves to multi-billion dollar projects that take a decade to plan and build and may not be needed when they finally come on-line. Every time I read about a new coal or nuke plant it’s always behind schedule and over budget, but every recent solar project seems to be coming in ahead of schedule and under budget. Solar is fast and flexible, and this advantage is not yet fully understood by an energy business that is used to thinking in megaprojects. One other under-appreciated advantage is water- solar doesn’t use any so speak of, but thermal plants need enormous amounts, which are increasingly hard to come by in many regions of the world.

    • JamesWimberley

      Link for the Mongolian nomads?

      • Riely Rumfort

        “about 90 percent of nomads relied on candles, coal, and yak dung to light and heat their homes, shelling out more than the cost of a solar panel in the space of a few years for smoky and inefficient power. Just over half managed to power a phone or radio with a diesel generator or motorcycle battery, draining more of their meager budgets. In cutting down on energy costs and increasing availability, the solar panel program freed up cash, creating a brand new industry of small appliance providers in the countryside. The industry is so robust that now 70 percent of nomads have a color TV and satellite dish and 90 percent are hooked into a mobile phone network.”
        Google “Slate Mongolian Solar” for the article. I’d post the link but then it’d have to await approval etc, and I’d like to do you the favor of giving your fingers some exercise.

        • Bob_Wallace

          I ‘whitelisted’ you sometime back. You shouldn’t get link-trapped.

      • Ian

        Hi James, I responded to you this morning, but now I don’t see my response in this thread. Is there a block against putting links in these comments? The web site with the article is called ZME Science and the article is titled “70% of Mongolian nomads now have solar power”. it’s dated november 24 2015. Google it.

  • Shiggity

    Every innovation that semi-conductors get, Solar PV will get too.

    That is why it’s so strong. Computer technology ain’t stopping, get on board or get rekt.

    LED’s and solid state batteries have the same underlying principles.

    Solid state tech is so fundamentally better, mechanical tech won’t even be around in 15 years at the rate we’re going.

    And yes by that I mean steam based generation will be the MINORITY.

    • Riely Rumfort

      Surely, did you see the White Graphene/Graphene advance recently out of Oak Ridge National Laboratory?
      Also as much as most like to divide Solar and Micro-architecture Technology a material advance within one soon leaps to the other.
      Sadly we don’t have 15 years to get our sh*t together, some may debate this, but they simply aren’t all that aware of how the natural world works.

  • tftillman

    The breakthroughs needed are not panel costs. They are already dirt cheap.
    It is the storage, installation and electronics that are the bottleneck. If batteries and Inverter/chargers were not so expensive, I would install my own system, and cut the cord to the utilities, with a short payback term.
    It would be nice to see a big increase in efficiency, though. That is where the research needs to march on.

    That would lower installation costs because you would need fewer panels and also less space.
    At least there is one silver lining in the cloud. No more coal plants being built.
    Let’s all continue to pull together to pressure Utilities and lawmakers in the right direction.

    • neroden

      Batteries are getting a lot cheaper too, though not quite as fast. Inverter costs are out of line and should get much cheaper very quickly — the microinverter companies seem to be working on this quite intensively.

  • Ivor O’Connor

    , Jenny projects that the price per watt of a crystalline silicon solar panel will drop from 62 cents today to 21 cents in 2040, when it will still lead the market. The cost drop will come from “incremental improvements in crystalline silicon technology (thinner wafers, better-shaped busbars, better AR coating, more targeted doping, better contact technology).”

    blah blah blah, it’s already at 19 cents in 2015. http://sunelec.com/cms/newsletters/

    • neroden

      Yep. The panels get faster cheaper than any of these bloviators ever predict.

    • Ronald Brakels

      Those are pretty amazing prices. I looked at the 25 cent a watt one’s details and it only has a 5 year parts and workmanship warranty, but at that price I was expecting it to be made of cardboard, so I’m still impressed.

    • JamesWimberley

      These prices are Grade B stock. Effectively they are remaindered, The buyer takes a chance on the quality. You can’t use such prices as representative of current production costs and sales prices. Trade site PVinsights gives a current poly module price ex Shanghai of 56c/watt, range 78-47c (link). You are being unfair to Jenny.

      • neroden

        Interesting. Of course, the wide supply of used and remaindered solar panels is having its own effect on the market: it’s making panels accessible to DIYers with much less cash.

  • vensonata

    I like to ask myself the question, “what if the solar panels were free?” What is the remaining cost per kwh? The so called Balance of system, seems to have a finite possibility of cost reduction. Human labor costs? Steel pole manufacturing surely does not have much fat left to trim. How about land costs for utility scale solar? Actually… there you really could make more difference to installed cost than a perovskite breakthrough. Permitting fees are the lowest hanging fruit for residential scale PV. What if there weren’t any? So yes, the price can come down for PV but the sources of that price drop are probably nothing to do with PV panels at all.

    • Bob_Wallace

      Labor costs can come down some if installation rates increase. If crews don’t have to go all the way across town or have dead time more solar can be installed per day.

      With new clip-in mounting and plug-in wiring it’s not clear how on roof time could decrease much. I spent a day or more hand wiring my system. I could have plugged to together in less than a half hour.

      Permitting costs can drop in many places. The big savings in the near term might be inverter price.

      • just_jim

        Regarding BOS costs, how much difference is there between installing a system along with a new roof, rather than on an existing roof? Are there any roofing systems designed to make installing solar easier? I’m not talking about ‘solar shingles’ and the like, rather something like metal roofs designed so the panels could be easily attached to specific spots, or where fasteners for the roof could be easily adapted to be fasteners for roof and panels.

        • Bob_Wallace

          I think one company is marketing a solar roofing package. I don’t know how the costs run.

          It makes sense to me to design a system that screws down to the bare rafters, eliminating the plywood decking and roofing. That would leave all the wiring and connections inside the building, out of the weather. Panels, racks and perhaps some steel strapping provide the sheer strength that plywood would have given.

          A company could offer components, including skylights and roof doors, then architects/designers could work their plans around the system.

          Deliver an entire roof slope, including panels, in cartons and just screw it on.

        • Wrennjamen

          Check out using S-5 clamps on a standing seam aluminum metal roofs it makes a quick clean install or looks like it would I’m planing on using them

          • Calamity_Jean

            That’s what Home Power magazine says. Standing seam metal roofing is the easiest to install PV on. It also has the advantage that the roofing lasts about thirty years, longer that other types. Shingle roofs need to be re-roofed more often than that. Whenever the roofing is replaced the solar array has to come off and then be put back on.

    • neroden

      Solar installers are spending a lot on marketing in the US.

  • jonesey

    Incremental improvements in solar panels themselves will suffice; no breakthroughs are needed there.

    We need two things now:

    1. Application of best practices in soft costs for solar installation and in carbon pricing. Germany has installation figured out — their best practices need to be adopted. A few regions have begun pricing carbon — those practices need wider adoption.

    2. Significant improvements in storage of kilowatt-hours so that renewables can become the dominant generation technology. It is unclear to me whether a breakthrough is needed or whether storage is just five or ten years behind where solar is. It’s possible that ten years of incremental improvements and a few doublings of production will make storage widely adoptable.

    • Bob_Wallace

      We have a problem with “customer acquisition” costs. US installers have to sell solar and that’s not cheap. Germany and Australia had markets that caused people to seek out installers, eliminating the sales costs.

      As utilities add ‘grid access’ fees and as net metering disappears there is going to be less economic gain for installing rooftop. I suspect utility solar will dominate in the US and rooftop will not grow appreciably. Mostly large scale users will install enough to let them avoid top tier/high TOU rates.

      • Ivor O’Connor

        Only reason “customer acquisition” is not cheap is because the solar companies are trying to cheat the customers. If these X used car salespeople would instead quit trying to get every last penny they can and instead offer reasonable prices they would not have any trouble.

      • neroden

        The situation in the US is not homogeneous.

        In California and Hawaii, solar is a complete no-brainer regardless of what sort of scam fees the utility charges. (In Australia, even solar + batteries is cheaper than the grid right now.)

        The utility attacks on solar are actually dumb and counterproductive.

        The situation is a bit different in the snowbelt where solar panels produce less power, and in areas with relatively cheap electricity (which are often also in the snowbelt).

  • Nolan Thiessen

    Incremental solar module price should be enough to lead to large scale adoption as long as there is a breakthrough in storage.

    • Bob_Wallace

      Even without a cost breakthrough enough solar should be installed to idle all gas plants when the Sun is shining. The kWh cost of solar is now very close to the fuel cost for running a gas plant and gas prices should rise over time.

      The price of wind is already low enough that it makes sense to install enough wind generation to curtail gas when the wind is blowing.

  • MarTams

    The only remainiysolar breakthrough that is badly needed is the cost of installation!!!

    • Kraylin

      In developed nations that may forever be a challenge as our wages are high, especially for skilled labour. I can only speak for the Toronto area but I suspect it is a challenge elsewhere as well.

      • Riely Rumfort

        Solution, easily installed systems, self educating, capable individuals, helpful communities.

        • Kraylin

          Yes, all those things are helping to push renewable energy now and ultimately the economics will be favourable for renewables soon effectively removing fossil fuels only ‘positive’ argument left.

      • neroden

        Installation on flat roofs or on fields has become very, very simple — unfold the standard racks, put the solar panels on them, plug in the wires and go.

        Installation on peaked roofs has excess costs in the US — it’s much cheaper in Germany.

        • Bob_Wallace

          Installation on peaked roofs, itself, has become very simple. I see almost nothing that would make it simpler. I assume installers have some sort of super stud finder so that they can quickly locate rafter centers. Then it’s just screw down the brackets, snap in the panels, plug in the cables, put the long run in conduit, and get off the roof.

          • neroden

            Not quite that simple. Have to account for resealing the roof to make sure it stays waterproof, which is actually a huge pain in the neck. Then there’s grounding. And electrical isolation if the rafters are conductive. And the brackets still aren’t standardized — and neither is rafter placement…

            The advantage on flat roofs is zero roof penetrations.

        • GCO

          I have PV on a flat roof, and let me tell you that the installation a few years ago was anything but trivial.

          First, ballasted system are a no-go without proving that the roof can take the extra load, something close to impossible in my old house, so penetrations it was (fortunately my roof was spray foam, which is easy to reseal with the right caulk).
          Then, PV modules weren’t installed flat on the roof (like they would on pitched roofs), so more racking hardware was needed.
          More parts, more grounding as well.
          As the array had to be split in rows instead of being large contiguous area(s), electrical was more involved too. [an east-west setup like is now becoming popular would alleviate that concern].
          With PV modules not flat on the roof, the inspector also wanted to be shown detailed wind load calculations, which had to be tailored for my specific roof, PV layout and racking.

          Large commercial installations can probably leverage more standard systems, but from my experience, for smaller/residential installations, sorry, no, flat roofs don’t simplify things. I’d say it’s very much the opposite.

      • just_jim

        Germany and Australia have much lower installation costs than the US, and wages as high or higher. If Toronto installation costs are in the same range as US costs, there’s a lot of reduction possible.

  • I’m glad to read this article after all the headlines about the attention-hungry billionaires that donate billions to achieve a clean energy breakthrough in the hopes they will earn a place in history as the saviours of humanity, These billionaires don’t understand they are not doing humanity a favour by lending credence to the delayers that adhere to the Lomborg doctrine that it is better to do nothing about climate change – until we achieve some undefined ‘breakthrough’ (which will of course always be just over the horizon).

    • Was planning to repost it for months, but that was one of the things that prompted me to finally get to it.

    • And we also have a new US Renewable Capacity Report coming in about 1 hr and 35 mins 😀

      Should help as well. 100% of new capacity in US from renewables in October. 70% for the year through October.

    • Pawan Sharma
    • JamesWimberley

      Another thing to bear in mind is that Gates and Zuckerberg know very little about the business they are proposing to disrupt. It is possible that some really good ideas are stalled through lack of funding – EGS geothermal could use some love. It is far likelier that the really good ideas and people are already getting funding: Green, Snaith, Yang etc. Battery R&D may even be going through a bubble phase of overenthusiasm. There is a reason why you can’t get funding for vertical-axis wind turbines.

      Brin does nor seem to be in Gates’ club: perhaps because Google had the same idea a few years back, wasted money on half-baked schemes like the Makani flying wind turbine, and sensibly realised they were not getting anywhere. Now they concentrate on autonomous driving and home automation, where software is of the essence, plus large-scale renewable energy procurement for their server farms.

      • Yes, it reminds me of when Richard Muller arrogantly jumped into the climate science world… and then later discovered the climate scientists he was so heavily criticizing had nailed it.

      • I also wonder how much Elon caught Brin & Page up to speed and diverted plans to waste a ton of money.

      • Bob_Wallace

        Vinod Khosla is part of the group. He’s been putting money into long shots for a long time.

        I really hope these guys (and Meg) get themselves some really knowledgeable advisors and don’t get suckered by slick talkers

    • Frank

      At the very least, the medical costs need to be added to coal. That is a real right now cost. Yeah, not like the US has that any better. The other thing to consider what solar will cost by the time you get a coal plant built, and I think India can use the power now. Why wait? Solar goes up much faster.

  • JamesWimberley

    A disruptive new production technology needs a significant, not a marginal, advantage in costs to replace the incumbent, because of the sunk capital in the latter and transition costs like grid integration. But an order of magnitude is overstating it. Wind in the US West is down to half the price of coal, dixeunt Lazards. No coal plants are being built, old ones are closing. There is considerable regulatory and civic pressure behind the death of coal, but a half-price alternative would do the job. On this analogy, solar needs to halve in price to 3c/kWh. This can clearly be done without new breakthroughs.

    Independently of cost, higher efficiency is desirable because it lowers the land take and other material footprint per kWh. In a few northerly countries like Britain, the former is a real constraint.

    • I agree that “However, for solar to displace substantial fossil fuels in the long term, costs must come down by an order of magnitude — to pennies per
      watt,”
      is overstating it. Current PV prices already enable PPA’s below 6¢/kWh. Do we need 0.6¢/kWh for solar energy to become mainstream?

      • Brent Jatko

        I don’t think we need prices to go that low; we just need to break the hold utilities have on state legislatures so solar can be added to the grid.

      • Bob_Wallace

        What we’re working at is the retirement of paid off, fully functional fossil fuel burners. We’re working against their operating costs, not the cost of a new plant.

        Solar at 6c can idle a gas peaker but it can’t close a coal plant.

        • Ronald Brakels

          But solar at 6 cents a watt on rooftops can close coal plants. This is why it is vitally important not to allow incumbants to use political inflluence to have legislation passed against distributed solar. If electricity generated by rooftop solar has the same access to electricity markets as coal generated electricity then coal will loose.

          • Bob_Wallace

            I’m not convinced that solar at 6 cents can close paid off coal plants. It can help prevent new ones from being built.

          • Jamset

            When you said “paid off” I thought you mean corrupt/subsidised like the proposed reactor in England.

            Maybe you can say “existing coal power stations” instead.

          • Bob_Wallace

            Existing would take in both paid off and still paying for plants. Perhaps there are better terms. I’ll contemplate….

          • just_jim

            As far as the economics of keeping it running, it doesn’t matter whether it’s paid for or not.

            “Sunk costs are sunk.” If a paid for coal plant is profitable, one that isn’t paid for will lose less money running than shut down. The losses may force a company into bankruptcy, but the new owners will make money running the plant.

          • Bob_Wallace

            If operating costs are not low enough to make some profit no one is going to take over after bankruptcy.

            Remember, the Kewaunee nuclear plant was in good working condition with years to go on its license. The owners were losing money with 5c/kWh operating costs and no one wanted to take over the plant so they just shut it down.

            The problem facing these thermal plants is that the cost of wind and solar are going to continue to drop. The more they lose during the windy and sunny hours the harder it is to recoup their loss and make a few bucks during the remaining hours. And NG holds sets a price ceiling during those hours.

          • neroden

            Turns out the running costs of nuclear are very, very, VERY high. Lots of incredibly finicky and dangerous bits.

            The running costs of coal power plants are… mostly the coal, which is dirt cheap. That’s why it’s the hardest target to beat.

          • ToddFlach

            paid off = debt free

          • Ronald Brakels

            Where people are paying more than 6 cents a kilowatt-hour for grid electricity during the day they will have an incentive to install 6 cent rooftop solar and they will have an incentive to install systems that produce more electricity than their minimum electricity demand to maximise the reduction in their electricity bills. The surplus electricity they export to the grid pushes down the wholesale price of electricity during the day. Once it goes below the marginal cost of running a coal plant the coal plant starts losing money and while some more modern coal plants are more flexible, it always costs them money to shut down during a period of low wholesale electricity prices. Coal plants hate this.

            It’s all about the money. Households and business have an incentive to install rooftop solar that produces more electricity than their minimum demand and their surplus trashes electricity prices during the day which hurts the economics of coal more than other forms of generation.

            In South Australia rooftops solar at times has provided a third to total electricity use. This has directly contributed to the closing of one coal plant and the the remaining coal plant will close in march after our summer is done. In the future it will no doubt provide all electricity use at times.

            It will be more difficult in the state of Victoria which has the least sunshine in mainland Australia, the lowest retail electricity prices, and the lowest coal generation costs. But even there rooftop solar is contributing to the closure of coal plants.

            Now maybe there are places in the US where the retail price of electricity is only 6 cents a kilowatt-hour and there is no transmission capacity to let other states send their surplus solar electricity there, but I sure those places don’t cover the majority of US coal generation. (But they would be a reason to have a carbon price.)

          • RM

            You may be interested to know that in the US (at least in CA) regardless of any financial incentive to install more solar than you need, the utility companies will not allow it. When a homeowner contracts with a solar installer, the whole plan has to be approved by the utility company. The utility will not approve anything above 80-90% capacity, based on past bills. Seems many arrows point back to legislative support of solar …

          • Ronald Brakels

            A rooftop solar system that can produce electricity equal to 80-90% of a household’s total consumption is still going to be sending a lot of electricity into the grid on a typical sunny day. Not only will the house with the rooftop solar be unlikely to require grid electricity, but by sending solar electricity it doesn’t use into the grid it will reduce the demand for grid generation and push down electricity prices.

            Australia’s small 1 and 1.5 kilowatt rooftop solar systems were enough to push down electricity demand during the day. While large systems help, they’re certainly not necessary to cause coal generators financial distress.

          • Frank

            I don’t quite understand coal, but I note that powder river basin coal from Wyoming is much cheaper than Appalachian coal. I also note that eia shows a lot of coal plants slated for shutdown in the Appalachian area. I know shale gas is a big factor too. And I would love to put a price on everything going up the smokestack.

          • Bob_Wallace

            Appalachian coal is pretty much over. It’s so much easier to scoop western coal out of open pit mines.

            A number of mines have closed and several coal companies have gone out of business.

            Here is what has happened to Peabody Coal’s stock value over the last five years.

          • tftillman

            Agreed! It can close them due to lack of demand, not necessarily cost. I am paying 12c a KWH in AZ

        • Kraylin

          Good point, we will simply have to wait out the functional lifespan of these existing plants and I think that’s why it is so sad when countries build new coal plants, how long do those things last? 50years? more?

          • Bob_Wallace

            Average life for US coal and nuclear plants is about 40 years.

            I’ll stick a plant age graph on. It’s a 2010 graph so add five years to ages.

            My guess is that last remaining thermal plants will get pushed something past 40 because it’s going to be hard to get any more built. Apparently a lot of the remaining reactors will get pushed to 60. Unless a reactor melts down in the US or Western Europe and then we’ll likely close them all very quickly.

            But, whatever. We could wait them out or we could use a carbon price to speed their demise.

          • Riely Rumfort

            The fact we would use them to justify initial costs are absorbed is depressing. That’s like saying we should drive every 8-12mph car even made til it’s engine no longer runs while spending thousands in maintenance along the way.
            It would seem we know what direction we should be heading yet won’t commit for our better.

          • Bob_Wallace

            Utilities don’t price in “what’s good for humanity”.

            Until/unless we create some sort of price on carbon coal plants will get used as long as they are a fraction of a penny cheaper than the alternative.

            Looking at the graph I posted, there are almost no US coal plants less than 26 years old. If we wait for them to die a natural death that would be about 14 years which might not be terrible. That would be (almost) no more US coal by 2030.

            We might need all the wind and solar we can install over the next decade or so to replace petroleum.

            If the EPA is shutting down the dirtiest coal plants that’s going to help our health costs. Coal is now apparently just under 35% of our electricity supply. We’re not yet installing a 1% equivalent amount of wind and solar.

          • Matt

            I going to ignore the data is date shifted an just look at the content.
            I see coal plants in the 51-60 year range but not many in 60+. But taking 60 as age they will close leave a lot of years burning a lot coal. So yes, hope in next 5 can drop governemt support of coal (then gas/NG), and if dreaming get a carbon price. Because without it, I worry to many will stay open too long. US has built massive NG in last 5 (to add to those in the 1-20 year columns). And the health benefit closing all the coal in the next 10 years would be amazing.

          • ToddFlach

            Absolutely not we will not wait for their functional life to end before closing them! Coal mining is already a zombie industry which will simply not be able to attract new investors, and when they cannot pay their miners salaries and their suppliers, they will have to shut down. And when there is no coal mining, there will be no coal power. This is already well under way in the USA, even with very small penetration of PV and wind. When natural gas prices start to rise again, there will be no stopping wind and PV.

          • Kraylin

            I appreciate your enthusiasm but I think you are underestimating the billions invested in existing infrastructure. We are a long way from decommissioning plants before at least maintenance (age) becomes an issue. Some countries are even building new Coal plants sadly but I think at least every developed nation is urgently reducing/eliminating coal plants and no longer building new ones.

        • Ivor O’Connor

          How low does solar need to go before it can close an existing coal plant?

          • neroden

            In the US, coal plants are mostly being closed by mercury and other toxics regulation. This is probably the way forward in most countries, because mercury is understood by everyone to be terrible.

          • Ivor O’Connor

            Remember back a few hundred years ago when it was considered a medicine? Take a few pills to clean out your system from food poisoning. The Lewis & Clark expedition relied heavily on mercury pills.

          • Ronald Brakels

            Swallow some elemental mercury and hopefully extremely little of it will form biologically active compounds before it’s passed. (Just for the love of god avoid using trampolines while it’s still inside you.)

          • Ivor O’Connor

            I suppose the Lewis and Clark Expedition used mercury in its natural occurring calomel state. And as I understand it their trail was later verified simply by looking for the heavy metal, mercury, deposits they left every where they went.

          • JamesWimberley

            The damage solar and wind do to coal is through cutting the capacity factor: they always have despatch priority. German utilities filed a list of >50 coal plants they would like to close as uneconomic, even though wind and solar don’t supply half of German electricity. The government won’t allow that of course, and is negotiating a slower pace of rundown – still expensive.

          • Matt

            Germany is a big net exporter of electric, and the government has been trying to slow down PV. I bet if they close the dirtiest/most costly 25. That the demands to pay us not to close would lower. Of course the coal plant owners want the government to pay them money.

          • Bob_Wallace

            Wind is likely the main thermal plant closer. If wind can cause a coal or nuclear plant to lose a lot of money during nighttime hours then the thermal plant has to make more during other hours. Solar at 6c/kWh helps to set a ceiling for midday and CCNG at around 6c caps things off.

            I’d guess that if a thermal plant has operating costs around 4c/kWh then it’s in deep trouble. A major repair would likely mean that it gets closed rather than fixed. We’ve already seen on nuclear reactor closed because it needed 5c/kWh to stay in business.

          • neroden

            Hmmm. Coal is still incredibly cheap, and it’s getting cheaper as demand for coal drops. And burning it in a turbine costs almost nothing, but there are a couple of other things going on:

            (1) the older coal plants are very inefficient, wasting most of the energy in the coal; this is another reason the oldest coal plants are closing first

            (2) coal has transportation costs, and they’re around 40% of the cost of the coal-as-delivered.

            http://www.energybiz.com/article/12/11/eia-coal-transportation-costs-jump-50-last-decade

            I expect that the coal plants *furthest from the coal mines* are gonna close first!

    • Ross

      We need renewables to be the obvious choice in India when the alternative being considered is coal.

      • JamesWimberley

        India is getting new utility solar at about 7c/kWh. That is still well above the advertised price for new coal which is IIRC around 5c. What is very unclear is whether these quoted coal prices can actually be delivered. The failure if the Ultra-Mega coal plant programme suggests not.

        At 3c, solar would be the cheap option. At the historic 10% annual decline in panel prices (normally tracked by BOS, provided some of the price drop comes from higher efficiency) it’s five years away. My optimistic guess is that by the time of the first 5-year review under the Paris agreement, India will have abandoned coal expansion.

        • Bob_Wallace

          The external costs of coal are not included.

          The US and Europe have essentially ceased building new coal plants. China seems to be building only replacement plants, using supercritical plants which produce more electricity and less pollution per tonne. India is the main builder of new coal as far as I know.

          The air in Indian cities can be terrible. India must be losing hundreds of billions of dollars per year in lost workdays and health costs. The push on India, I think, should be to continually remind them of how much the lives of their citizens would be improved were they to forgo more coal plant construction and install renewables.

          • Kraylin

            Add Canada to your list, the last coal plant Canada built was unfortunately as recent as 2011 but non since and a strong opinion to never build another. Many coal closures in recent years as well.

          • neroden

            Apparently some of the Indian states are full gung-ho “get rid of coal”, but others are full gung-ho “build coal”. It would be worthwhile to actually do a state-level breakdown of the policies and practices in each Indian state.

          • Jouni Valkonen

            External costs are not included. Neither are avoided costs. For example, renewable energy needs more reliable grid, threrefore there is less black outs. This is especially important with microgrids and solar storage, because they can eliminate black outs even during extreme grid failures. Currently we do not have any market mechanisms that could properly value these avoided costs of black outs and other costs saving that are related to renewables, most prominently zero marginal cost of renewable electricity production that lowers the system price of electricity.

            External cost analysis can catch some benefits, such as less health issues, but by anymeans not all avoided costs.

        • neroden

          I don’t believe the advertised price for new coal can be achieved.

          Old coal is a hard target. If transportation costs are *zero* and the plant is maximally efficient, you can reach 1.36 cents / kwh. But transportation costs are enormous, and can bring the price of operating old coal up to 3.1 cents / kwh, or even more.

          New coal must cost more than those numbers. Which makes it a fairly easy target.

          • Ross

            As a matter of interest what sort of transport costs does a coal plant right on the coast with an integrated port for unloading the coal have assuming at the other side of the ocean there’s another port close to the coal?

    • Bob_Wallace

      We need to remember that wind and solar are not competing against new coal but against paid off coal plants, against the operating costs of a coal plant.

      We’ve stopped building new coal plants. The lower installed price of CCNG along with licensing difficulties basically stopped coal construction a few years ago. Now the task at hand it to close coal plants well before they reach the end of their natural lives and age out.

      As we near fifty cents for panels we’re “good enough” on panel costs. It’s the BOS prices that keep solar from massively replacing coal. Efficiency, I think, is the key here. Install fewer panels for the same output and almost all the BOS costs are automatically cut.

      Operating costs for coal plants can be low. It’s likely we need a price on carbon in order to speed up coal plant closures past what is being done through EPA regs.

      • neroden

        Germany already has much lower BOS prices, due to standardized racking and standardized installation procedures and, frankly, lower profits for the installers. Also less marketing expenditures.

    • Jamset

      Yes, more efficient panels would enable partially shaded homes to go off grid.

      I hope SolarCity has exports in mind with their NY factory!

    • Jouni Valkonen

      solar is already down to 3 cents or below if we consider also the Avoided Costs of fossil and nuclear power generation. Modern economic theories has this flaw that they cannot properly value the value of avoided costs. Even accounting the external costs is difficult for people.

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