Aligning Efforts for SunShot Success
The U.S. Department of Energy continues to make solar industry news by supporting their SunShot initiative, focused on bringing levelized costs of PV systems in line with other sources of generation before 2020.
A flurry of media activity has investigated the question, “Is it realistic to hope that solar can one day be installed for $1/watt or under?” which has sparked vigorous debate by commenters (see recent posts on Greentech Media and Renewable Energy World).
In collaboration with key DOE staff over the past year (namely RMI’s Solar PV Balance of System Charrette, DOE’s $1/W Workshop [PDF], and an ARPA-E workshop in Washington DC), RMI has helped convene diverse industry stakeholders to think through this very question.
The answer: a cautious yes. Although the $1/watt goal looks to be achievable, reaching it will be a significant challenge to industry leaders and policymakers alike.
With today’s installed system prices well above $3/watt and significantly higher for residential systems, there is a long way to go. Though some critics debate the specifics of the $1 goal, continued cost reduction is an imperative. At current price points, the industry would struggle to scale quickly without government and utility support.
Encouragingly though, over the years the solar industry has proven capable of delivering large cost reductions, and appears capable of continuing to do so through optimized manufacturing processes, increased cell efficiencies, durable components, and installation best practices.
However, technology optimization will only address part of the challenge. Solar cost reductions are also constrained by business and regulatory process requirements that contribute to installer overhead. In order to achieve major cost reductions and enduring growth, the complex tangle of utility interconnection requirements, financing expectations, local building codes, and incentive programs needs to be simplified, and made more transparent across the U.S.’s emerging local markets.
RMI is currently exploring the potential of consumer markets to drive solar industry growth. As costs come down and a commoditized product is marketed directly to homeowners, consumers represent a vast potential market, ultimately installing up to 350 Giga-Watts of solar panels on U.S. homes.These distributed systems can offer utility system, land use, and energy security benefits compared to conventional, highly centralized power systems.
There are many promising new photovoltaic technologies in various stages of commercialization, which will likely continue to gain market share over the course of the decade. But the urgency and scale of the challenges facing us are reminders that we cannot afford to wait. Real work is needed to develop a widely scalable solar product, open up markets, and bring investment capital to solar projects. A joint effort is needed across the value chain to achieve this vision.