Here Comes the Sun: Solar Energy Is More Affordable Than Ever
A recent study published September 30, 2015, reported that solar power is more affordable than ever before. For utility applications, solar power now costs an average of 5 cents per kilowatt-hour (kWh). The results of the study, conducted by the Berkeley Lab, shows that PPA prices for solar power have declined by 70 percent since 2009 – and that solar has become more efficient in recent years.
The Survey Results
The Berkeley Lab publishes an annual report, called the Utility-Scale Solar statement. By collecting enormous amounts of empirical data, the Berkeley Lab compiles the latest news in utility-scale solar projects. They define “utility-scale” as a ground-mounted solar project of more than 5 megawatts (MW).
The report is quite comprehensive, but there are a few important points that anyone can take away. Here’s a quick roundup:
- Installation costs for solar energy have decreased by more than 50 percent since 2009.
- While the solar energy market is primarily located in the Southwest United States, the new low average price of 5 cents per kWh has allowed other regions to affordably access the movement. Solar is now a more viable option than ever in the Southeast.
- New solar technology has drastically improved its efficiency. In 2011, the average capacity factor of completed projects was 24.5 percent. In 2014, the average capacity factor increased to 29.4 percent for completed projects. Future projects will likely show a furthering of this trend.
What This Means for the Rest of Us
The new low average price per kWh has come about because projects are performing better and installation costs are decreasing. However, this can also be attributed to a boom in project development. Technicians are now rushing to complete solar projects before the federal tax incentive falls from 30 percent to 10 percent, which is slated to happen in 2016. While utility-scale solar projects are the biggest competitors, residential and commercial solar technicians have also entered the race to install new projects before the deadline.
The environment stands to benefit enormously from the solar movement.
This is great news for the economy. With enormous and widespread solar projects, more and more Americans will have access to jobs and other economic benefits. Additionally, a nationwide investment in solar will help stabilize energy prices, which tend to otherwise fluctuate wildly depending on the time of year and availability of fossil fuels. While upfront installation costs can be high, the technology has a promising return on investment, as evidenced by the thousands of households and businesses that are saving money on their power bills.
Should You Make the Switch?
The advantages of solar power are clear, but it’s up to you to decide whether you’re ready for your home or business to convert either partially or completely to using solar power. A good first step is to become educated about how solar power works. Most smaller commercial and residential solar systems are tied to the larger power grid so that homes and businesses will still have access to backup energy at night or on rainy days.
There are a few factors to take into account as you deliberate. First, how much solar power will you need? If your location doesn’t receive a lot of sunlight due to surrounding trees and buildings, the efficacy of solar technology will be affected, so you may need to work with a contractor to figure out the best way to position solar panels. It’s also a good idea to learn about local and federal tax credits and other financial incentives so you can adhere to a timeline that works for you.
Ultimately, however, the stats are pointing toward a radical widespread shift to solar power – and now is a good time as any to join the movement.