How long do you think it is before we see widespread use of solar across our towns and cities? Ten years? Twenty? Thirty? Most of us still consider solar power a pipe dream – something desirable and hugely beneficial, but still a long way off. In the past five years, however, that’s all changed. A technology that was once considered too expensive to be viable is getting cheaper at an amazing rate – and as solar power’s share of the market increases, the price is only going to keep getting lower. Read on to find out why.
What’s been wrong with solar until now?
Public perception of solar is that it’s pricey – and until the last five years or so, that was a fair assessment. But why? Well, the cost of solar panels is driven predominantly by materials and manufacturing processes. Silicon is the material most often used as a semiconductor in photovoltaic cells (see here to read more about the science) – and though it’s not in particularly short supply, the solar industry is forced compete with electronics for global supplies. In addition, it’s expensive to convert silicon from a raw material to a solar cell semiconductor – a process that solar industry experts have been working hard on improving.
How have prices changed in recent years?
Increased research and production levels have led to significant drops in the cost of manufacturing. Hindered by the cost of silicon processing, manufacturers have begun to turn to an alternative option known as thin-film solar cells: assortments of affordable materials that are arranged to form thin solar panels. Scientists have also developed special coatings to increase the efficiency (and therefore the return on investment) of modern panels. Alongside other initiatives to designed to boost the industry – including due diligence standards and easier ways of reaching deals – these technological developments have led the price of panels to sink 65 per cent in five years, to less than 70 American cents per watt. According to analysis by Cleantechnica.com, the cost of solar panels today is about 100 times lower than the cost in 1977 – bringing the cost of solar almost in line with the cost of retail electricity.
What’s going to happen in the future?
As more and more panel makers compete within the market, prices seem to set to fall further, while efficiency continues to rise. Pioneering solar panel makers such as First Solar are pushing ahead with their innovative cadmium-telluride solar panel, which recently proved itself the most efficient design in the world. If current trends continue, by the time solar capacity has increased to the equivalent of 16% of today’s demand, some analysts believe the price of solar could be less than half that of natural gas electricity (and that’s before even considering the added cost of air pollution!). It seems that alternative energy might not be alternative much longer – and that there might be serious consequences for traditional electricity-generating technologies. How this will play out in the business world is yet to be seen.