Cost Of Solar Power Overestimated, Performance Understated

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One of the few remaining arguments about PV based solar power is its cost. It may have been a valid point just a few years ago, but many of today’s studies reiterating that claim may be well out of touch.

According to Professor Joshua Pearce from Canada’s Queen’s University Department of Mechanical and Materials Engineering, many analysts who prepare reports on solar photovoltaics that state the clean energy source is expensive may be basing their calculations on old data.

With solar panel technology evolving so rapidly, “old” can mean just a couple of years.

Dr. Pearce says there has been a 70 percent reduction in the price of solar panels in the last few years; a point that the Australian Solar Energy Society (AuSES) also made a couple of weeks ago. This price reduction is not being considered in some studies, nor is the improved performance of solar modules over the long term.

Dr. Pearce used the example of a study in 2010 that estimated the cost of PV solar power at $7.61 per watt – over 7 times the current cost of modules today in some markets when modules are bought in large quantities direct from the manufacturer.

A more recent and local example of analyses basing the cost or performance of solar on perhaps incorrect data came from the Australian Strategic Policy Institute in their paper entitled “Keeping The Home Fires Burning: Australia’s Energy Security” (PDF).

The study claimed 200m2 of solar panels per Australian would be required to meet all their energy needs – “about four times the average amount of roof area per person in Australia today”. A solar expert has refuted this, stating only 14m2 per person would be required – a huge difference.

Dr. Pearce believes that give the cost reductions, solar photovoltaic systems are closing in on the tipping point where they can generate electricity for the same price other traditional sources of energy. This tipping point is also known as grid parity.

The Professor received his Ph.D. in Materials (Engineering option) from the Pennsylvania State University and has also worked as a Physics professor at Clarion University of Pennsylvania, USA. The Queen’s study was co-authored by grad students Kadra Branker and Michael Pathak.

(Update December 13, 2011 – another Australian example of the cost of solar being overestimated may be found in the just-released and very important Australian Government’s Draft Energy White Paper. An article on Climate Spectator points out the white paper relies on modeling predicting solar PV will drop to a cost of around $220/MWh by 2035. However, according to CS, the International Energy Agency notes the cost of solar PV has already fallen to between $160-$230/MWh.)