Nov. 17 (Bloomberg) -- Solar power may already be cheaper than electricity produced from coal or natural gas in some U.S. markets, and as panel prices continue to fall it may become cost-effective for at least 10 percent of the country.
The installed cost of residential solar power may fall as low as $3.00 a watt by 2016, said Richard Keiser, a former Sanford Bernstein analyst who’s now president of Keiser Analytics. At that price it will be competitive with utility- scale power plants that deliver more than 400 billion kilowatt- hours of electricity.
Solar energy doesn’t need to compete on price with electricity generated by large, fossil fuel-powered plants, the most common comparison, Keiser said. It just has to be less expensive than the electricity consumers buy off the grid, a point that’s quickly coming into reach. When it’s cheaper to install solar panels than to buy power from utilities, installations will surge.
“Demand for solar will rise exponentially,” Keiser said. “Just as Google was a disruptive technology in the advertising sector, solar will be for energy.”
Keiser estimates that there will be more than 100 gigawatts of solar panels in use in the U.S. in five years, roughly 25 times the current total. That’s more than the 21 gigawatts that the Solar Energy Industries Association expects will be generating power at end of 2015.
Keiser predicts the increase will be driven by residential- rooftop projects and may be aided by solar-leasing programs that are bringing the technology within reach for more homeowners.
Bloomberg New Energy Finance estimates that the installed cost will fall to about $2.38 a watt globally in 2015.
The declining price of going solar is being driven by falling costs for the raw materials as well as improved manufacturing processes. Solar modules now sell for about 99 cents a watt, down from $1.79 at the beginning of this year, according to New Energy Finance.
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