Solar Energy Cost and Economic Impact

Solar energy prices from last 10 to 15 years had declined an average of 4% per year. A lot of progress has been made for increasing the cell’s efficiency, and manufacturing economies of scale are the underlying drivers of this price decrease. The figures in the Solarbuzz Global Price survey clearly show that prices had declined consistently over the last two years.

A solar energy system for home usually cost almost $8-10 per Watt. If the government incentive programs exist and coupled with lower prices secured through volume secured through volume purchases then installed costs for solar panels can become as low as $3-4 watt, means that 10-12 cents per kilowatt hour can be achieved. If there is no incentive programs then solar energy costs range between 22-40 cents/kWh for very large PV systems.

Other system that is used in large power stations is the concentrating solar power (CSP) technology. It’s a large collection of mirrors or lenses which are used to produce heat or directed towards PV systems. CSP technology costs $2-$4 per Watt. Some had estimated that these types of solar arrays can produce 25% of the world’s energy needs by 2050. It’s expected also that CSP costs will become as low as 6-7 cents per kWh, which is almost equal to conventional energy production. CSP industry is growing rapidly in Spain and United States.

Solar energy already haves remarkable effect on the world economy. According to the Department of Energy in United States market for PV is expected to be around $ 27 billion dollars by 2020 and it will create 150,000 new jobs. As a matter of fact solar energy allows the countries without a grid infrastructure to power isolated areas, and no hurdle in receiving a free source of energy from sun. The distribution transmission lines are having life, which ends with passage of time. Even in the United States those distribution transmission lines are becoming critical due to aging infrastructure and local emission errors. That’s why solar energy in a way is free from such troubles, and it provides energy independence, for example in Hawaii’s Mauna Lani Bay Hotel’s had installed PV cells on the roof top, which produce 75kW of energy and this solar panel array is expected to pay itself off in 5 years.

It is calculated that 25,000 square kilometers of solar panels can produce all of the US electricity needs for one year, and obviously this amount of land is available in the United States. If we see the figures then we’ll know that more land is being used to grow ethanol currently.