The Coming Solar Boom

22nd May 2013

Solar power has the potential to provide us with enough power to easily satisfy even our most extravagant needs. 12.2 trillion watt hours of solar energy fall on the earth each year, more than 20,000 times our actual needs, so harvesting just 0.005% of that solar potential would satisfy all our energy needs.

Yet solar power still struggles to gain a foothold in the energy market, and this is due to the costs.

The US Department of Energy estimates that on average solar power costs $156.90 per megawatt hour (MWh), which makes it economically uncompetitive when compared to; coal, which costs $99.60 per MWh; nuclear, which costs $112.70 per MWh; and natural gas which can range from $65.50 to $132 per MWh.

Electricity is also expensive to store, which increases solar’s price because energy storage is a vital part of solar power, due to the fact that the sun does not always shine.

But over the past few years giant advances have been made both in the solar cells technology, and also forms of energy storage.

Photovoltaic cell efficiency has grown from just eight percent in the mid-1970s, to as much as 44 or even 51 percent in the most efficient modern designs. Manufacturing costs have also plummeted as more and more companies enter the market, with costs in the region of just $0.58 per watt now, compared to $4 a watt in 2008.

If davances continue to be made at a similar rate, then it is not unrealistic to imagine US solar power costing $120 per MWh by 2020 or sooner, making it competitive with coal and nuclear, and then maybe reaching half the price of coal in the next 20 years.

The following graph is taken from Bloomberg New Energy Finance, and shows the fall in the cost of solar energy over the past 25 years.

Falling Price of PV Cells

By. Joao Peixe