One of the most common criticisms levied against renewable energy earlier was the high price point. Naysayers were quicker to argue that renewables, while cleaner, were not affordable to people. However, the decrease in price has rendered this argument invalid. In fact, there are instances where the expenses associated with renewable energy are already on par with that of traditional power. Solar prices, in particular, have fallen precipitously. Even six years ago, the cost of a regular rooftop module was 75 percent more expensive than it is now. And all signs point to the fact that solar costs will keep on falling further because that is usually what happens to technologies as they mature. What does all this mean for the future? Let’s find out.
Solar Cost Breakdown
Already, the total installed costs dropped by five percent for rooftop residential systems while larger utility-scale solar farms are now 12 percent cheaper. The installed cost includes everything that a solar power system needs to become fully functional, such as power electronics, panels, mounting hardware, and of course, installation charges.
What makes the continued decrease in total installed cost all the more noteworthy is the fact that the price of solar modules or panels themselves has not changed that much since 2012. This indicates that the drop in installed cost has largely been influenced by the lower cost of inverters capable of converting DC power generated by the solar setup into AC power for the grid.
Other “soft” costs have gone down as well, including system design, permitting, customer acquisition, and installation.
Solar Energy Will Become a Common Utility
Solar energy is going to become more widespread in the next 30 years – at least that’s what the International Energy Agency predicts. According to their predictions, solar power will account for almost 16 percent of the entire energy on the planet. Right now though, it generates only one percent.
What Must Be Done
The decrease in expenses is going to increase the use of solar power. Achieving such a scenario will require three conditions to be fulfilled:
- Install more solar panels.
- Produce batteries or other means of energy storage so that solar panels can store intermittent energy.
- Increase transmission lines to facilitate the transport of energy from where solar energy is produced to where people live.
To accomplish all these points, economic efficiency is a must. Since solar has already achieved record low prices, the coming years might very well see utility-scale solar become cost efficient and a worthy competitor against electricity generation. If you want to get on board this phenomenon right now, get in touch with us here.