By Arman Kazemi
October 30, 2014
The U.S. Department of Energy (DOE) looks on track to meet its nation-wide pricing targets for solar energy before the end of the decade, a new report finds.
Released late last month, the Photovoltaic System Pricing Trends Report has found that the price for solar has declined across the United States, with prices for distributed photovoltaic (PV) in particular dropping by 12-19 per cent in 2013.
These findings keep the DOE on par with its national PV pricing goals as set out in the SunShot Initiative, which the DOE launched in 2011 as a way to keep tabs on solar PV trends throughout the States.
Through SunShot, the DOE “seeks to make solar energy cost-competitive with other forms of electricity by the end of the decade,” according to the Initiative’s website. This means a price drop of about 75 per cent in the cost of solar between 2010 and 2020.
The report’s other findings include a decrease in utility-scale PV costs to about $1.80 per watt in 2014, 59 per cent below 2010 levels. And this year will see another 3-12 per cent decline in the price for distributed solar systems, according to a news release from the National Renewable Energy Laboratory, a co-author of the report.
"There is still considerable uncertainty as to how low PV system prices will drop in the next five to 10 years," according to the David Feldman, senior financial analyst at NREL and one of the report’s lead authors.
“However, there appears to be an emerging consensus that the SunShot's price reduction targets are within reach and more and more likely to be realized.”
According to CanSIA, a non-profit trade association representing the Canadian solar industry, Canadian solar could reach market competitiveness along similar timelines.
CanSIA’s Solar Vision 2025 report predicts mainstream adoption of solar technology in Canada by 2025, by which time solar should be market competitive with incumbent energy producers, according to the report.
Yet CanSIA is a private firm that lacks some of the strong government backing that’s behind the SunShot Initiative. In reality, public sector support for Canadian solar is sporadic and varies from province to province.
This is one reason why Canada has been falling behind some of its international partners in the field, including the United States.
As previous reports have indicated, the Ontario government’s feed-in-tariff system (now up for debate in the legislature) is one reason that province’s solar sector has thrived, helping bump Canada among the top 10 countries in the world for amount of solar installed.
According to CanSIA figures, capital and project development costs for set to fall by more than half their current levels by 2025, to $146-$200 MWh.
For Canadian solar as a whole to meet these forecasts, however, there needs to be strong unified legislation at the federal level, such as that seen in Australia, Germany and the U.S., which has brought these countries’ solar sectors to the verge of sustained grid parity.
As Elizabeth McDonald, former president of CanSIA, says “government support will mean the difference between Canadian companies being the purveyors of new renewable energy technology or the residents of Canada simply becoming the buyers of someone else’s research and development efforts.”
Photo Credit: Mike Murphy