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Published on December 5th, 2015 | by Zachary Shahan

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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.”

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About the Author

Zach is tryin' to help society help itself (and other species). He spends most of his time here on CleanTechnica as its director and chief editor. He's also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as an electric vehicle, solar energy, 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.



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