Public Power - July/August 2008 - (Page 26)

Solar Energy Rising are estimated to reach $3.50/watt, while residential rates are expected to increase 1.5 percent annually. In that case, photovoltaic energy would be cost-effective in 250 utility service territories across five southwestern states, eight in the northeast, Florida, and a smattering of other locations representing 37 percent of the county’s residential customers. An estimated 85 percent of residential sales would have a price dif- ference of 5 cents or less compared to the photovoltaic LCOE. If electric rates rise 2.5 percent annually, half the country’s residential customers would be better off with photovoltaic systems. The global average sales price in 2007 dollars for a peak kW photovoltaic module—which Navigant Consulting put at just under $4,000 in 2006—has systematically declined from about $75,000 over the past three decades. It dropped 80 percent between 1980 and 2000. The only serious exception was during the past five years when silicon prices rose due to a polysilicon shortage and artificial demand increases due to the explosion in incentives. The polysilicon supply has been restored. In fact, in a historic shift, more silicon is now used for photovoltaic manufacture than for integrated circuits. Virtually everyone thinks photovoltaic costs and prices will continue to decline. Most believe prices will reach grid-parity between 2015 and 2020, when subsidies will no longer be needed. The few people wary about the scale of further photovoltaic system cost declines still think they’ll reach viability because of rising retail rates. First Solar, the world’s largest thin-film manufacturer, reported production costs averaged $1.12/watt during the fourth quarter of 2007. It is targeting 70 cents/watt by 2011. “The potential to produce modules at less than $1/w using a variety of technology can more than offset the lower module selling price of the less efficient modules while creating much more unsubsidized demand as the system prices reach grid parity sooner,” according to Solar Energy Industries Association. Concentrating solar power economics are highly dependent on assumptions. “There is no good average. You will see a lot of numbers, but they never say what year dollars they are” or discuss how financing affects the figures, said EPRI’s Libby. She suspects some developers are taking lower returns in the early years to get their plants in the market. Advances in plant components, materials science, thermal storage and computer controls have reduced the wholesale cost of concentrating solar power power “to close to 10 cents/kWh for large plants under the most favorable conditions,” according to EPRI. It also said the difference between the LCOE of central-station photovoltaic and other generation options “will narrow over time, to the point where large-scale photovoltaic projects may also become PUBLIC POWER 26 JULY-AUGUST 2008 http://www.archcoal.com

Table of Contents Feed for the Digital Edition of Public Power - July/August 2008

Public Power- July/August 2008 Contents Perspective 10 Questions Solar Energy Rising Sacramento's Solar Shares Gainesville Crowns a Conservation Idol By the Numbers Curbing Costs of Outages Reliability Green Energy Hometown Connections Customer Service Parting Shot

Public Power - July/August 2008

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