Here is a worthwhile read from Forbes discussing how the costs to produce solar energy are decreasing as increased demand, and government subsidies are pushing down the cost of photo cells, installation, maintenance, etc.

 

(From Forbes): "Solar power is the Philadelphia Phillies of energy: perennially full of promise. Photovoltaic cells have been around since 1883 (the same year, coincidentally, that the Phillies were founded). But today the sun contributes only 0.03% of the electricity generated in the U.S., and this juice costs, on average, 27 cents per kilowatt-hour before subsidies. Absent those government handouts, the solar power industry would vaporize.

 

Now for the sunny news. Within seven years the cost of unsubsidized solar power could be down to 10 cents per kwh--what the average American consumer pays today for juice produced in power plants fed with coal, natural gas or uranium.

 

So say the Energy Department, McKinsey & Co. and Lehman Brothers among others. How can this come to pass? Silicon is getting cheaper, the cost of turning it into voltaic cells is also going down and rooftop installers are getting more adept. Abundant sunlight helps, too. "If you have those particular conditions in a given area, you're going to achieve grid parity first," says Vishal Shah, an analyst at Lehman. He says that in California a 300-kilowatt commercial system now costs $7.10 per watt, producing juice at 19 cents a kwh before subsidies, compared with 12 cents for the grid; those costs, Shah predicts, will drop to $3.45 per watt, or 9 cents a kwh, by 2015, without subsidies. Solar fans recite the capital cost per watt generated on a sunny midday; average wattage, night and clouds included, is (in southern California) scarcely a quarter of that.

 

The soaring popularity of solar cells has pushed short-term contract prices of polysilicon to $170 per kilogram from $30 three years ago. Suppliers like Hemlock and memc, along with Asian startups, are catching up. Total production will reach 90,000 metric tons in 2009, double the amount of 2007. That, predicts Shah, will push the prices down to $50 a kilo, making solar more competitive."

 

Graphic courtesy of Forbes

 

If the predictions are true and the cost to produce solar energy is on its way towards being on par (or cheaper) than the cost to produce electricity from coal, natural gas, et al, it would be far and away the biggest "win" for renewable energy to date. Even though this is possible without government subsidies, I think its vital that all subsidies are renewed (if not increased) in order to make sure that no momentum is lost. Considering what's at stake I think it's time for the government to puts its weight behind this in the same way they did public works projects like the Hoover Dam, the Interstate Highway System, etc.

 

If Germany can (in the future) potentially provide for 30% of its energy needs with solar energy there is no reason we can't do the same in the U.S., all that is required is the will to stand up and make it happen.  Politicians seeking to win voters with innovative energy programs need to start talking about solar energy, and other impactful technologies we already have at our disposable, instead of just offering us gas price placebos.

 

You can read the entire article in full here.

 

Sources:

 

Forbes: Sun Worshippers -- Andy Stone, August 11, 2008.