“We’ve never seen solar module prices so low. With the rebates still relatively high and the federal tax credit at 30%, there’s never been a better time to go solar,” said Scott Gordon, Vice President of Residential Sales at HelioPower.
According to a Yahoo! Finance report yesterday, August 10, “Technology, Tenacity Drive Down Solar Power Costs,” solar photovoltaic (PV) technology has changed little since the energy crisis of the 1970s, but it's finally getting cheaper.
The report goes on to say: Large-scale rollouts of solar farms in Europe in the past few years have virtually commoditized PV as an energy source, and huge installations on the way in the United States and China will cement that process.
Edison International (NYSE: eix) subsidiary Southern California Edison got the go-ahead last month from California's energy regulators to build and manage 250 megawatts of solar power generation and contract for another 250 MW from outside developers within the next five years, making it the largest solar PV program ever undertaken.
Independent solar industry consultants Solarbuzz estimates that worldwide solar PV installation hit almost 6,000 MW in 2008, nearly double the 3,000 MW of 2007.”
In its August review of solar photovoltaic modules, Solarbuzz states “This month we have good news for solar electricity consumers and also for the solar industry.
The first area of excitement for PV end-customers is the rapid fall in solar module prices. The August 2009 survey set two records - the largest number of price declines in one month and for the magnitude of the monthly decline in both the US and European price indices.
There were 176 price declines this month. In the eight years of this survey, there has never been anything close to this number of moves in a single month. The previous high was 126 declines in May of this year. In past times when prices were rising, the largest number of price rises in a single month was 142, back in August 2005.”
More from the Yahoo! Finance report: The economic downturn has lead to a collapse in the price of silicon, a key ingredient in the making of solar cells, and short-term drop in demand for modules.
State-level renewable portfolio standards (RPS) have mandated that an increasing amount of renewable energy be generated. There is also a national RPS-like mandate currently in the Markey-Waxman energy bill making its way through Congress. And an array of tax credits and renewable energy mandates have also subsidized solar PV to bring its cost per kilowatt hour more in line with that of "brown" power, usually coal-fired in the U.S.
Finally, the efficiency of the solar cells themselves has improved. Early this year, researchers at Germany's Fraunhofer Institute for Solar Energy Systems created a solar PV cell that's 41.4% efficient, beating the record held by the Colorado-based National Renewable Energy Laboratory by almost percent.
The cost of solar energy production on a kilowatt-hour (kwh) basis, with all government subsidies netted out, has dropped 8 percent from a peak of 22.04 cents/kwh in January 2002 to 20.40 cents/kwh in July 2009.
That efficiency is trickling down the supply chain to customers.
Solarbuzz estimates that the "customer price" of an average, flat-roof-installed, 500-kilowatt solar energy system - a size typically used by an industrial user that includes the panels, inverter and grid connection hardware - dropped by 0.7 percent alone from June 2009 to July 2009, to about $2.4 million.
Manufacturers and installers of solar modules are looking for new ways to decrease costs, lower prices and attract customers, at a time of rising demand; that race for profit could be seen at the second annual Intersolar 2009 trade show, was held in mid-July in San Francisco.
In addition to silicon ingot, wafer and solar cells makers like Canadian Solar, (NASDAQ: csiq) there were firms like Applied Materials (NASDAQ: amat ) and Alcatel (: aclu), which are intent on squeezing efficiency out of the process of making solar PV modules.
All of these gains in efficiency could see solar energy reach the key goal of parity with coal within the next few years.
Right now, consumers, businesses and community building owners can purchase solar power systems at an all time low.