Solar Power MORE Competitive Than Decision-Makers Or Consumers Realize [View all]

[G_j]

http://www.forbes.com/sites/justingerdes/2012/05/24/solar-power-more-competitive-than-decision-makers-or-consumers-realize/


Solar Power More Competitive Than Decision-Makers Or Consumers Realize


Are the decision-makers entrusted with determining the future of energy infrastructure operating under an outdated understanding of the cost-competitiveness of solar power? In many cases, the answer is yes, according to a paper released last week by Bloomberg New Energy Finance (BNEF).

In “Reconsidering the Economics of Photovoltaic Power,” (PDF) BNEF CEO Michael Liebreich and nine collaborators document the precipitous decline in the price of solar power since 2009. “Average PV module prices have fallen by nearly 75% in the past three years,” they write, “to the point where solar power is now competitive with daytime retail power prices in a number of countries.”

Those facts so quickly upended what had been conventional wisdom (i.e., solar power is prohibitively expensive) that the new economics of solar power apparently caught decision-makers flat-footed. Here are the authors’ conclusions:


• The shift in prices of solar technology carries major implications for policy and investment decision-makers, especially when it comes to the choice of generating technology and the design of tariff, fiscal and other support policies.
• Many observers and decision-makers have yet to catch up with the improvements in the economics of solar power that have resulted from recent PV technology cost and price reductions.
• Recent reductions in PV prices are likely to be sustainable. While overcapacity has caused severe pain for manufacturers, the price falls are primarily a reflection of reductions in manufacturing costs, not solely a reflection of stock liquidation and other short-run factors.
• Commonly used estimates for PV power’s competitiveness – including the concept of “grid parity” – are often misleading, given the complex realities of the electricity system. [emphasis in the above mine]

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