SunShot Beats Its Solar Cost Goal 3 Years Early
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According to Greentech Media, SunShot has shattered its 2020 goal of reaching $1.00 per watt for utility-scale solar utility costs 3 years earlier.
Founded back in 2011 when Stephen Chu was the US Department of Energy Secretary, the SunShot goal was to get utility-scale costs down to $1.00/watt.
Initial projections had the cost at $4.00 a watt in early 2011, GTM said.
Chu envisioned the SunShot initiative would cut 75% of the total costs of PV solar energy without subsidies before 2020, to reach cost competitiveness with other energy forms. Chu pointed to 4 key areas where SunShot would focus to bring solar costs down:
- Solar cell & array technology
- Power electronics to maximize installation performance
- Enhancements in solar manufacturing operations
- Design, permitting & installations for solar energy systems.
Other areas besides solar systems have benefitted the overall industry, including falling labor, inverter, and tracking costs, according to GTM, but as noted above, the target has already been achieved.
However, despite SunShot reaching its mission, various soft costs — including customer acquisition costs — increased.
The debate goes on regarding what impact the Department of Energy’s SunShot Initiative made on pushing prices down. Ben Gallagher, a GTM Research solar analyst said SunShot provided monetary and market signals to entrepreneurs and investors to “make the market” more efficient for them. He said SunShot boosted the solar industry by giving consumers and merchants the faith to endure more risk.
However, Gallagher pointed out that “pure market forces,” including an imbalance in global supply & demand and Chinese scaling also has played a part in the overall dramatic drops in solar system costs.
The US Department of Energy loans program also contributed to declining solar costs. This is because First Solar and SunPower used this program to create large-scale solar plants with cheap capital, which meant lower costs then and going forward.
The loans program provided $32 billion with a fail rate of 2.33%, which, according to former SunShot head Peter Davids, was better than most bank failure rates. This loan program has also created $1.65 billion in interest payments, according to Bloomberg.
SunShot and the US loans program made a great contribution in scaling solar power projects, cutting costs, and stimulating a brighter future (no matter what Trump tells you). Although, it is hard to tease out how much of the USA’s nearly 36 GW of solar capacity is because of these programs versus other domestic and global economic factors and initiatives. Nonetheless, these two programs provided much-needed support in getting an emerging industry off the ground in the 21st century. It is astonishing that total US solar capacity back in 2008 was 9.18 GW.
Given the ongoing falling costs (expected for decades without breakthroughs), solar will become more cost competitive with fossil fuels as utilities, businesses, and people see its economic benefits. Well, it’s already typically cheaper than fossil fuels, but it will become much, much cheaper. Gallagher said even renewable energy skeptics couldn’t deny solar’s compelling and improving cost competitiveness in today’s market.
This is important in an age where the Trump administration has denied climate change and is threatening to cut renewable energy investments, despite 2016 being the hottest year on the planet (after 2015 and 2014 were), and despite solar and wind energy creating 12x more jobs than the US economy as a whole in recent years.
Related: Energy Dept. To President Donald Trump: I’m Not Dead Yet!
Solar power plant photo via lbl.gov
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