Costs of Solar Power Falling

The cost of purchasing and installing solar panel systems in homes and businesses has been decreasing rapidly since a decade ago. That cost has dropped 27.6% from 1998 through 2007. In a study done by Lawrence Berkeley National Laboratory, the costs of 37,000 photovoltaic systems across the country were examined and it was found that the average price fell from $10.50 per watt in 1998 to $7.60 per watt in 2007. The study also revealed that the state in which the system is installed has an affect on the price of installation. Systems smaller than 10 kilowatts cost an average of $8.10 per watt in California, the second lowest average in the country next to Arizona. Maryland was found to have the highest average price at $10.60 per watt.

The solar panel industry is continuing to find new ways to drive costs of panels down by using new materials, new production processes, and streamlining installation techniques. The demand for solar energy is increasing as homeowners and businesses are looking to lower energy bills and leave a smaller carbon footprint. Economics is playing a major roll in the issue as photovoltaic solar energy still isn’t economical. It is said that this type of renewable energy needs to fall below $5 per watt in order to truly be competitive with other forms of energy production.

I believe that it is obvious economics will be the deciding factor with solar energy’s success or failure. Right now a small system for homeowners costs approximately $25,000. This price, roughly that of buying a new car, is not economical if a homeowner wants to recover their investment in a reasonable amount of time. The time it takes to recover expenses would also depend on the location of the home; closer to the equator would increase efficiency and shorten the time it takes to “break even”. I am totally interested in having a solar energy system on the house that I purchase in the future, if the cost declines or I stumble upon a large pile of money. Having household appliances connected to a solar power system would reduce energy bills significantly, however, a monthly payment for the solar power system would wipe out that affect and possibly cost more to the homeowner.
--Kevin Kelly