A new report from the Chinese government notes that the cost of solar power in that country could drop below 0.80 yuan (12.5 cents) per kilowatt-hour by 2015. At that price, solar matches up favorably with the current go-to source for cheap energy, coal. How? Well, China already expects to double its solar-electric capacity by the end of the year and is providing incentives for further growth.
This follows a report issued last April in which Bloomberg New Energy Finance projected that solar power could be price competitive with coal around the world by 2020. Both large-scale installations and rooftop solar have seen a steady decrease in cost that is expected to continue for several years. According to Bloomberg's numbers, the true cost of retail electricity from solar may already rival that of coal.
Over the next two years, the rate of solar panel installation is expected to surge as prices continue a steady decline while performance and availability improve. For decades, coal has been cheap to use, but the high initial cost of constructing coal plants, the current low cost for natural gas, and plunging prices for renewables have made building new coal plants a risky proposition. As a result, many proposed coal plants in the United States have been canceled. China has constructed hundreds of new coal plants to feed that nation's rapidly increasing demand for electricity, but the result has been high levels of pollution (and high numbers of mining deaths). With the parity in prices, China may now move its power demand toward solar.
Earlier this month, the United States DOE authorized a new 290 megawatt photovoltaic system in Yuma County, Arizona. Worldwide manufacturing capacity for photovoltaics has jumped to 27.5 gigawatts, a nearly 400 percent increase in three years.
When you put all these items together, the future looks pretty bright for the sun's energy (pun intended). Market forces, which have long supported increased use of fossil fuels, may have already shifted to the side of solar, and that's a good thing for everyone, but especially for those with plug-in vehicles.