When President Obama’s administration (D) unveiled the SunShot Initiative in 2010, it likened the goal of reducing the installed price of solar energy by 75 percent by 2020, to President Kennedy’s MoonShot Initiative. Now it appears at least one sector, utility-scale solar, is essentially at the cost level, $1.11 a watt, that the SunShot Initiative set out for it, making it cost-competitive with other energy sources. Moreover, the goal was achieved three years ahead of the initiative’s original goals.
That’s according to “The U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017,” a report from the National Renewable Energy Laboratory (NREL), which found that the levelized cost of electricity (LCOE) without subsidies for utility-scale solar power costs now range from 4.4 cents per kilowatt hour to 6.1 cents per kWh. The quarterly benchmarking report said the cost of utility-scale solar fell 29 percent from 2016’s first quarter. When the initiative began utility-scale solar power cost about 27 cents per kWh.
“The rapid system capital cost decline of solar PV systems, driven by lower module prices and higher market competition this year, demonstrates the continuing economic competitiveness of solar PV in today’s energy investment portfolio,” said Ran Fu, lead author of the report. His results also attributed price drops to higher solar panel efficiency, lower inverter prices and lower labor costs.
The report also found price drops in the residential and commercial solar sectors, albeit not as much as in the utility-scale segment. The LCOE cost for residential systems fell to between 12.9 and 16.7 cents per kWh and between 9.2 and 12 cents per kWh for commercial systems. That’s a price drop of 6 percent for residential and 15 percent for commercial, it found.
While the cost of utility-scale solar is now at the SunShot goal, the residential and commercial markets are more than 85 percent of the way toward achieving the initial 2020 cost targets. The biggest opportunity for continued price drops in residential solar and commercial solar continue to be found in reducing the soft costs of solar power, including labor and overhead costs. “In the first quarter of 2017, soft costs accounted for 68 percent of residential system costs, 59 percent for a commercial system, and 41 percent of a utility-scale system,” the report determined.
The early successes of the SunShot Initiative have been so positive that the Department of Energy revised its SunShot Initiative goals last year. Under the new stretch targets, the initiative aims to see the costs of solar power in the US fall to 2 cents per kWh for utility-scale solar, 5 cents per kWh for residential solar and 4 cents per kWh for commercial solar.Tweet