What Is The Cost Of Solar Energy – This is part 1 of a series in which I will look at the future costs of clean energy and mobility technologies. This is a refresh and expansion of my 2015 series on the future of solar, wind, batteries and electric vehicles. Tune in again for more.

I’ve spent the last decade writing, speaking, and investing in clean energy and mobility. During that time, I made a number of predictions about the future costs of clean energy technologies, including solar, wind, energy storage, and electric vehicles.

What Is The Cost Of Solar Energy

What Is The Cost Of Solar Energy

My first forecast in 2011 was about the future costs of solar energy. It was a rather naive model, with mistakes that make me cringe today. At the time, she was also more optimistic about the rate of decline in solar energy costs than any other forecast I had seen. My 2015 update was more detailed and corrected some significant methodological errors in the 2011 forecast. It was also more optimistic about price declines than any other model I have seen.

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Both predictions were wrong. Solar prices have fallen faster than anyone – including me – predicted. Modeling this price decline leads me to predict that the price of solar will continue to fall faster than I previously expected and will ultimately reach lower prices than virtually anyone expects. Prices that are, by all accounts, insanely, incredibly cheap.

Before we move on to the future, let’s look at the last decade and what made it unique. To this end, it is tempting to look at the continued record breaking prices in solar auctions, such as bids at costs of 1.35 cents per kWh in Abu Dhabi or 1.6 cents per kWh in Portugal.

I love talking about these record prices, but they inherently reflect price outliers. Moreover, it often takes 2 or more years from the date of announcing the record price to the actual implementation of the investment. These prices reflect the costs of solar developers

Instead, let’s look at metrics for the average cost of projects actually built since 2010 and the averages (not just outliers) of bids for projects expected to come online in 2020. By the way, all of the costs below are unsubsidized, as are all of the costs used in this post.

What Is The Cost Of Solar Panels? (2023)

The data in the chart above comes from multiple independent data sources and includes three global measures, two US measures, one from China, and one from India. (More details on these data series and links to sources are provided in Appendix 1.) And while these data sets differ in places, together they paint an overwhelmingly consistent picture: the price of electricity from community-scale solar projects (unsubsidized cost) has increased since 5 to 8 in 2010–2020.

Additionally, if we look at the gray shaded area of ​​the chart above, showing the cost of electricity from fossil fuels (primarily coal and natural gas), we can see that building new solar power plants has begun to become competitive on feedstock costs in the mid-late decade and he is looking for more and more often

Than building new fossil fuel power plants. (Though solar still suffers from instability, the economics of which we will return to in a future post).

What Is The Cost Of Solar Energy

Solar energy costs, the decline in solar prices over the past decade has been faster than any credible forecast. Add to this the forecasts of the International Energy Agency (IEA) in its World Energy Outlook for 2010, along with the forecast I presented in 2011 in Scientific American. When we do this, using dashed lines for forecasts, we see that actual solar prices are well below those expected by the world’s most renowned energy analyst and forecaster (IEA), and even below the most optimistic forecasts made a decade ago (mine) .

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Another way to look at this is to ask: How many years are solar prices higher than expected? The answer is even more revealing. Let’s zoom out by extending the timescale to 2050 so we can see when previous projections predicted solar prices would reach their current levels. In addition, we will add the IEA’s 2014 forecast from its Solar Technology Roadmap and my more recent 2015 solar cost forecast.

Before the date expected by all but one forecast. Even the most optimistic forecast on this chart – my 2015 forecast – showed solar prices falling by about half from the rate at which they have actually fallen over the past five years.

– 50 to 100 years before the IEA forecast in its World Energy Outlook for 2010. (Depending on how you extrapolate the IEA’s 2010 forecasts. Indeed, the IEA’s 2010 forecasts could also be interpreted to mean that solar energy is currently cheaper than the IEA thought

In short, solar prices have fallen faster and lower than almost anyone expected. (In Appendix 2 I explain why these predictions were so wrong.)

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We can use the last decade to predict future solar energy prices. Not looking at the cost of solar as a function of time, but looking at the cost of solar as a function of cumulative

To do this, we can use Wright’s law, or “learning curve”. Wright’s Law states that for most technologies, each doubling of the cumulative scale of production will lead to a constant percentage decrease in the cost of the technology. This happens through

, a mix of innovations that improve the technology itself and innovations that reduce the amount of work, time, energy and raw materials needed to produce the technology.

What Is The Cost Of Solar Energy

While examining the costs of aircraft production, Wright first observed that each doubling of scale led to a constant percentage reduction in costs in 1936. Since Wright’s first observations, the same power-law relationship between cumulative production and costs has been found in other areas. For example, each doubling of total production of the Ford Model T led to a decrease in unit cost by approximately 16%.

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Wright’s Law is similar to Moore’s Law in some respects: the exponential decline in computational costs over time. Wright’s formulation is slightly different: exponential decline in technology costs as a function

Does Wright’s Law/Learning Curve Apply to Solar Energy Costs? It is common knowledge that this concerns the costs of solar energy

. The price of solar modules per watt of power falls by approximately 25% for each doubling of total production.

However, solar modules only account for about one third of the cost of solar power. The rest comes from associated hardware (inverters, trackers, cabling, mounting systems), land, labor, and other non-module costs. We need to check the cost

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From entire solar systems falls in this way. In 2015, I used data from a single source (Lawrence Berkeley Lab) in a single country (USA) to demonstrate a very consistent learning rate for electricity generated from utility-scale photovoltaics.

To make it more reliable, this time let’s use data from four different sources, covering both global averages and costs in three countries (US, India and China).

If we look at the price of solar power from each of these seven data series, it falls as a function

What Is The Cost Of Solar Energy

However, the graph above is on a linear scale and therefore does not tell us whether a learning rate applies. Learning by doing according to Wright’s Law works on:

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Change in costs. This means that the percentage of cost reduction through science requires twice as much cumulative industry scaling as last time.

Generally speaking, if a numerical phenomenon is exponential, it appears as a straight line on a logarithmic scale. It is an ascending straight line if it shows an exponential increase, or a falling straight line if it shows an exponential decline in some indicator (e.g. cost).

Scale, will only appear as a straight line if the x-axis (scale) is also exponential. Thus, if solar is undergoing a learning process (as expressed by Wright’s Law), we would expect the cost of solar to follow a straight line on a log-logarithmic scale (doubling prices at each tick on the Y-axis, and doubling the cumulative industry scale with each marker on the X axis.)

Indeed, this is what we see. And not just in one data set or from one country. All seven data series covering global, US, Chinese and Indian trends show that the price of solar power (on a logarithmic scale) declines smoothly with each doubling of the total amount of solar power deployed around the world (logarithmic scale axis).

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The numbers in the upper right corner, the “R Squared” value, reflect how well the raw data fits this straight line on the log-log plot. Fit is measured on a scale of 0 to 1, with 0 being no fit at all and 1 being a perfect fit, with each value being exactly where you would expect it to be. Of course, in the real world, observations never exactly match the data. Here, however, they fit exceptionally well: each of our seven data series has an R-squared well above 0.9, and most of them are 0.95 or higher. In short, sunny

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