Costs of Solar Power from Photovoltaics

The cost of electricity from photovoltaic (PV) systems has dropped 15- to 20-fold; and grid-connected PV systems currently sell for about $5-$10 per peak Watt (20 to 50¢/kWh), including support structures, power conditioning, and land. They are highly reliable and last 20 years or longer.

Hundreds of applications are cost-effective for off-grid needs. However, the fastest growing segment of the market is grid-connected PV, such as roof-mounted arrays on homes and commercial buildings in the United States. California and other states are currently subsidizing PV systems because it is considered cost-effective to reduce their peak daytime loads for air-conditioning, which matches PV output.

This trend graph compares the efficiency of converting sunlight into electricity for thin-film, crystalline silicon, and concentrator PV systems, starting in 1995 with projections to 2020. Thin-film PV has the lowest efficiency, starting at 5 percent in 1995, increasing to 8 percent in 2005 and to 13 percent in 2020. Crystalline silicon falls in the middle, starting at 12 percent efficiency in 1995, increasing to 14 percent efficiency in 2004 and to 16 percent efficiency in 2020. Concentrator systems are the highest efficiency, starting at 14 percent in 1995, increasing to 17 percent in 2005 and to 24 percent in 2020. This trend graph compares the capital cost in dollars per kilowatt for thin-film, crystalline silicon, and concentrator PV systems, starting in 1995 with projections to 2020. Thin-film and concentrator systems both start at about 7.6 dollars per kilowatt and drop to 2.2 dollars per kilowatt for thin-film and 2 dollars per kilowatt for concentrator sytems in 2005. By 2020, the two technologies change places, as thin-film costs 1 dollars per kilowatt and concentrator systems cost 1.1 dollar per kilowatt. Crystalline silicon started as cheapest in 1995, at 6.5 dollars per kilowatt, but its cost only declined to 3.9 dollars per kilowatt in 2005 and is projected to hit 1.9 dollars per kilowatt by 2020.

This trend graph shows the cost of photovoltaic energy starting at 98 cents per kilowatt-hour in 1980, dropping to 2.9 cents per kilowatt-hour in 2005, then gradually decreasing to 2.2 cents per kilowatt-hour in 2020.