The Department of Energy has just announced a new program to try to bring the cost of large-scale solar down to $1/watt, making it competitive with other energy sources without subsidies (ironic, since we’re subsidizing coal and fossil fuels).
The program will refocus part of its $200 million in solar technology R&D funding toward projects that will lead toward low-cost solar.
According to the DOE site, “the approach consists of two to three years of “horizontal” research and development (R&D) work focused on reducing PV modules, power electronics, and balance-of-system (BOS) costs. This will be followed by two to three years of intense “vertically integrated” systems-level demonstration projects that will demonstrate the commercial viability of the approach. ”
The chart below shows where the cost savings will come from:
At a total installed system cost of utility solar equivalent to the wholesale cost of electricity from fossil fuels — approximately $.05–$.06 per kilowatt-hour (kWh) — PV would be broadly competitive across the United States without any subsidies. At $.05–$.06 per kWh, the cost is approximately $1 per watt. Achieving this goal will require significant reductions and technological innovations in all PV system components. These components are broadly defined as modules, power electronics, and balance of systems (BOS), which includes all other components and costs required for a fully installed system. A rough breakdown of the $1 per watt installed cost would include $0.50 per watt for the module, $0.10 per watt for the power electronics, and $0.40 per watt for the BOS.