GE sees solar cheaper than fossil fuels in 5 years

Solar power may be cheaper than electricity generated by fossil fuels and nuclear reactors within three to five years because of innovations, said Mark M. Little, the global research director for General Electric Co. (GE)

Of course, being cheaper than new nuclear isn’t hard when cost curves are moving in opposite direction (see “Does nuclear power have a negative learning curve?“).

Here is the solar cost curve (in blue) from the recent IPCC report on renewables:




Experience curve in logarithmic scale for the price of silicon PV modules [in blue]…. Reductions in the cost or price of a technology per unit of capacity understate reductions in the levelized cost of energy of that technology when performance improvements occur

This takes us through 2010. The Bloomberg piece on GE notes:

The cost of solar cells, the main component in standard panels, has fallen 21 percent so far this year, and the cost of solar power is now about the same as the rate utilities charge for conventional power in the sunniest parts of California, Italy and Turkey…..

So we continue to march down the cost curve, and not just in module cost but in every aspect of solar deployment, including financing and installation (see “Sungevity partners with Lowe’s: Innovative business models are bringing solar to the general public“).

“If we can get solar at 15 cents a kilowatt-hour or lower, which I’m hopeful that we will do, you’re going to have a lot of people that are going to want to have solar at home,” Little said yesterday in an interview in Bloomberg’s Washington office. The 2009 average U.S. retail rate per kilowatt-hour for electricity ranges from 6.1 cents in Wyoming to 18.1 cents in Connecticut, according to Energy Information Administration data released in April.

Solar-panel makers from Arizona to Shanghai are expanding factories to add more cost savings that analysts say will sustain the industry’s expansion. Installations may increase by as much as 50 percent in 2011, worth about $140 billion, as cheaper panels and thin film make developers less dependent on government subsidies, Bloomberg New Energy Finance forecast.

Leading experts and companies alike have all told me they think this price is doable in the 2016 realm — with continued price drops after that (see also Chu’s Department of Energy seeks to cut solar costs 75% by 2020 in its “Sun Shot” program). The future of PV is sunny!