That’s the question asked in a new outlook from Wood Mackenzie. The outlook found that solar has the potential to upend the gas and power markets throughout the world.
In that way it likens solar to the next shale-type revolution. “Just as shale extraction technologies reconfigured oil and gas markets, no other technology is closer to transforming power markets in a similar fashion than distributed and utility-scale solar,” said Prajit Ghosh, research director for Americas Power & Renewables Research at Wood Mackenzie.
"Since the widespread collapse of solar module prices over the past six years, the role of solar in the North American power market has snowballed from a science experiment and a niche technology at best, to a key renewable competitor to wind power, a regional threat for non-renewable technologies, and a potential disruptor of utility business models and the power industry at large.”
Now solar modules comprise slightly less than 20 percent of a solar system’s costs, according to Wood Mackenzie. That’s a significant drop from the beginning of the decade when the solar panels comprised more than half the costs of a solar systems.
"With module costs at historical lows, efficiency improvement has become the next frontier as the best way to reduce balance of system and labor costs as less panels produce similar output levels," Ghosh said. "Thus, while more efficient solar technology may command a higher module price, the capacity gains per square meter usually make high-efficiency modules more economic on a $/W basis. That said, savings will also be driven by changes outside of manufacturing. Non-module costs will increasingly depend on heightened downstream competition, market structuring and regulatory redesign.”
Wood Mackenzie found that, by 2020, solar energy in expected to be at parity with other energy sources in 19 states and could be at parity in almost all states by 2030. Thought other anticipate solar will reach parity in the U.S. much faster, as soon as 2017. With the rapid drops in cost, increases in efficiency, as well as new materials and new ways of using photovoltaics will all contribute to it’s potential to revolutionize the energy sector much like shale technologies have.
The company anticipated that the U.S. will have more than 71 gigawatts of installed solar by 2035. It anticipated that 26 gigawatts will be in the form of distributed solar and 45 GWs will be in the form of large scale solar plants. The U.S. is already well on its way to meet that. At the end of 2014 it’s estimated that the U.S. already had 20 gigawatts of solar power online.Tweet