Cheaper Solar Panels Are Causing a Solar Boom

As prices for solar panels have dropped, more companies and utilities in the United States have decided to invest in solar.

Solar power keeps getting cheaper, providing a real incentive for businesses to cut down on carbon emissions. As prices for solar panels have dropped, more companies and utilities in the United States have looked at their options and decided this could be a good time to invest in solar.

In the past couple of months, the falling price of solar panels has driven “a significant increase” in solar development across the U.S., according to Solarbuzz, which tracks solar projects in the pipeline. Two months ago, the group counted 17 gigawatts worth of solar projects; now, there are 24 gigawatts of solar projects either installed, being installed, or in the development phase.

Most of those gigawatts are just a glimmer in the eye of forward-thinking companies. At the end of 2010, the entire country had a total of just 2.6 gigawatts of solar capacity installed, according to the Solar Energy Industries Association. But in 2010 alone, companies installed almost a gigawatt, twice as much solar power as was installed in 2009. The industry projects that the country’s solar capacity will double again this year.

Meanwhile, solar projects in China are growing almost as quickly. China currently has less than a gigawatt of solar energy projects installed, but the government is working on a five-year renewable energy plan that would include 10 gigawatts worth of solar projects. That number would hit 50 gigawatts by 2020. The Center for American Progress’ Melanie Hart writes that politics have helped boost solar, as coal interests are pushing back against the government investing any more in wind. But the decline of the price of solar panels, most of which are manufactured in China, can’t hurt, either.

Five years from now, putting in a large-scale solar project should be significantly cheaper than it is now. The U.S. Department of Energy is working on an initiative called SunShot, which aims to cut the installed cost of a solar energy system by 75 percent before 2020, hitting the cost point the DOE thinks will launch solar into the mainstream. The department is already funding one solar company that could cut costs for manufacturers by 50 percent.

For most projects, however, the cost of manufacturing solar panels now adds up to less than half of the project’s total price tag. If solar panels keep getting cheaper, so will solar projects. But the industry needs to figure out how to make the rest of the process cheaper, too.

Photo via DOE's National Renewable Energy Laboratory


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