For many of us, solar energy seems like the way of the future, an inevitable solution to our global reliance on dwindling sources of fossil fuels for our growing energy needs. On the other side of that coin, though, is the widespread perception that solar is expensive, that it is a luxury people with the money can opt for in order to reduce their carbon emissions without making much economic sense. Technology is doing away with this perception.
As solar power technology continues to progress, the nature of the debate will change altogether. Yes, solar has the potential to be more sustainable than fossil fuels, but it is also growing more cost efficient. That’s right, solar energy is becoming less expensive.
How the Costs of Solar are Decreasing
There are a few primary reasons the costs of solar power are coming down. The first reason is that solar energy cells are becoming more efficient, producing more energy as can be seen in this industry expert report by Lazard and other industry reports. Solar cells today produce more energy than panels twenty, ten, and even just a few years ago. That means a house or commercial facility needs fewer panels to produce the same amount of electricity than it did in the past. Fewer panels means lower cost.
On top of that, the panels themselves are becoming less expensive to produce. This is true for two major reasons. First, innovations in design and technology mean that each solar cell requires smaller amounts of materials to be built. Expensive inputs like silicon can be produced in thinner wafers, which means less silicon is needed for each solar cell produced.
In addition to lower input costs, the costs of production have gone down significantly. This can be attributed to the fact that solar panel production facilities have grown in size and capacity. This has led to economies of scale that can produce many more solar panels than facilities could in the past.
Growing Market Share
Solar energy still comprises a relatively small portion of the energy market as was discussed by Business Insider by industry experts. Coal and gas remain the major sources of power for much of the country. While there are environmentally conscious ways to access these sources of power, much is being done to increase the use of solar energy. States are looking at incentives like tax breaks to encourage consumers to explore solar. Some are even looking at mandates that newly constructed houses and buildings incorporate solar power in their design.
The decreasing cost of solar energy provides further motivation. While costs and issues with storing solar energy remain a challenge in the field, overall solar energy growth projections are strong. As production costs continue to drop, this trend is likely to continue.
The Solar Boom
Demand for solar energy has been somewhat restricted in the past due to limited supply and capacity. High costs have dissuaded many from pursuing solar energy as a realistic alternative to fossil fuels. The perception of the high cost of solar energy has remained. But as costs go down, the balance is shifting. More people will become aware of the lower cost of solar energy, which is leading to greater demand among consumers. Combined with incentives for installing solar systems in existing and new homes, greater availability will help steer more consumers and builders toward solar energy.
To speed along solar energy growth projections is the increasing cost of fossil fuels. As global supplies dwindle, costs will continue to rise. Alternative sources of fossil fuels often bring with them higher extraction costs. These sources mean more fossil fuels in the short term but at higher costs.
The landscape of the energy industry is changing. Industry realities like production costs and the availability of resources are shifting consumer preferences. Consumer preferences for cleaner fossil fuels and renewable sources of energy are contributing to more efficient production of solar energy and lower costs.