BOSTON — A new study predicts that by 2012 the price of solar power will match or be cheaper than the cost of grid electricity in a number of major markets.
Analysts at Photon Consulting, a Boston-based solar power consultancy, say fierce competition has the solar energy industry “racing to deliver $1 per watt solar [photovoltaic] modules that cost $1 per watt to install.”
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“The companies that win this race … will be able to provide large amounts of clean, competitively priced electricity,” Photon’s analysts said.
The new report, “The True Cost of Solar Power: Race to $1/W”, is scheduled to be released on Friday. Highlights were presented at Photon’s 7th Silicon Conference in Munich, Germany, last week.
“The ‘true cost’ of solar power is remarkably low even now,” according to Photon. In sunny areas, the firm estimates the cost of solar is already less than 25 cents per kilowatt hour, and will be under 10 cents per kilowatt hour by 2012.
If Photon’s estimates prove accurate, solar power soon could be cheaper than grid power in Rhode Island and Massachusetts. In 2007, the average retail price of electricity was 13.12 cents per kilowatt hour in Rhode Island and 15.16 cents per kilowatt hour in Massachusetts. However, in other parts of the country grid power prices are as low as 5 cents per kilowatt hour.
However, the analysts also warned that not all solar manufacturers will survive the brutal drop in prices. “By 2012, companies not able to achieve $1 per watt through the module level, $2 per watt through the system level and 10 to 20 cents per kilowatt hour for electricity are significantly at risk, because other companies will get there,” Michael Rogon, Photon Consulting’s managing director, said in a news release.
