Affordable solar power is on the horizon, says Michigan Tech’s Joshua Pearce, pictured here with a high-tech photovoltaic panel. Image: Sarah Bird |
It’s time to stop thinking of solar energy as a boutique source of power, says Joshua Pearce.
Sure,
solar only generates about 1% of the electricity in the U.S. But that
will change in a few years, says Pearce, an associate professor of
electrical engineering and materials science at Michigan Technological
University. The ultimate in renewable energy is about to go mainstream.
It’s
a matter of economics. A definitive new analysis by Pearce and his
colleagues at Queens University in Kingston, Ontario, shows that solar
photovoltaic systems are very close to achieving the tipping point in
many regions: they can make electricity that’s as cheap— sometimes
cheaper—than what consumers pay their utilities.
Here’s
why. First, the price of solar panels has plummeted. “Since 2009, the
cost has dropped 70%,” says Pearce. But more than that, the assumptions
used in previous studies have not given solar an even break.
“Historically, when comparing the economics of solar and conventional energy, people have been very conservative,” says Pearce.
To
figure out the true cost of photovoltaic energy, analysts need to
consider several variables, including the cost to install and maintain
the system, finance charges, how long it lasts, and how much electricity
it generates. Pearce and his colleagues performed an exhaustive review
of the previous studies and concluded that the values given those
variables were out of whack.
“It
is still a common misconception that solar PV technology has a short
life and is therefore extremely expensive,” he said. However, PV panels
are solid-state electronic devices with no moving parts and should last a
long time. “Based on the latest long-term studies, we should be doing
our economic analysis on a 30-year lifetime at minimum,” Pearce said.
In
addition, most analyses assume that the productivity of solar panels
will drop at an annual rate of 1 percent or more, a huge overestimation,
according to Pearce. “If you buy a top-of-the-line solar panel, it’s
much less, between 0.1 and 0.2%.”
Finally,
“The price of the solar equipment has been dropping, so you’d think
that the older papers would have higher cost estimates,” Pearce said.
“That’s not necessarily the case.” Equipment costs are determined based
on dollars per watt of electricity produced. Very recent studies set the
amount between $2 and $10. The true cost in 2011, says Pearce, is under
$1 per watt for solar panels on the global market, though system and
installation costs vary widely. In some parts of the world, solar is
already economically superior, and the study concludes that solar will
become an increasingly economical source of electricity over expanding
geographical regions.
In
regions with a burgeoning solar industry, thanks to government programs
that pay a premium for renewable energy, there are lots of solar panel
installers, which heats up the market. “Elsewhere, installation costs
have been high because contractors will do just one job a month,” says
Pearce. “Increasing demand and competition would drop installation costs
considerably.”
Furthermore,
economic studies like Pearce’s don’t generally taken into account solar
energy’s intangible benefits, reduced pollution and carbon emissions.
And while silicon-based solar panels do rely on a nonrenewable
resource—sand—they are no threat to the world’s beaches. It only takes
about a sandwich baggie of sand to make a roof’s worth of thin-film
photovoltaic cells, Pearce said.
Based
on the study, and on the fact that the cost of conventional power
continues to creep upward, Pearce believes that solar energy will soon
be a major player in the energy game. “It’s just a matter of time before
market economics catches up with it,” he says.
A Review of Solar Photovoltaic Levelized Cost of Electricity
