Solar energy may finally get its day in the sun. The high costs that for years made it impractical as a mainstream source of energy are plummeting. Real-estate companies are racing to install solar panels on office buildings, utilities are erecting large solar panel “farms” near big cities and in desolate deserts and creative financing plans are making solar more realistic than ever for homes. Solar power installations doubled in the US last year and are expected to double again this year. More solar energy is being planned than any other power source, including nuclear, coal, natural gas and wind. “We are at the beginning of a turning point,” says Andrew Beebe, who runs global sales for Suntech Power Holdings Co (尚德), a manufacturer of solar panels.
Solar’s share of the power business remains tiny, but its promise is great. The sun splashes more clean energy on the planet in one hour than humans use in a year, and daytime is when power is needed most. Moreover, solar panels can be installed near where people use power, reducing or eliminating the costs of moving power through a grid. Solar power has been held back by costs. It’s still about three times more expensive than electricity produced by natural gas, according to estimates by the US Energy Information Administration. However, the financial barriers are falling fast. Solar panel prices have plunged by two-thirds since 2008, making it easier for installers to market solar’s financial benefits and not simply its environmental ones. Homeowners who want to go solar can do so for free and pay the same or less for their power.
Last month, two of the nation’s biggest utilities, Exelon Corp and NextEra Energy Inc, each acquired a large California solar power farm in the early stages of development. Another utility, NRG Energy Inc, has announced a plan with Bank of America and the real estate firm Prologis Inc to spend US$1.4 billion to install solar systems on 750 commercial rooftops. Nationwide, solar power installations grew by 102 percent from 2009 to last year, by far the fastest rate in the past five years. Making solar affordable still requires large tax breaks and other subsidies from federal and state governments. The main federal subsidy pays for 30 percent of the cost of a residential system. When state and other subsidies are added, as much as 75 percent of the cost can be covered.
However, prices of solar panels, the squares of crystalline silicon or thin layers of metal films that turn the sun’s rays into electricity, are falling so fast that its advocates now credibly claim that solar will be able to compete with fossil fuels even when the federal solar subsidy shrinks by two-thirds in 2016. The falling prices have made it easier for solar installers to raise the money needed to grow. And they’ve made solar power systems so affordable they can appeal to homeowners who want to save on their electric bill, not just reduce their environmental impact. Some installers are teaming up with big hardware chains Home Depot and Lowe’s in an effort to expose solar to customers who might not otherwise consider it.