An economic analysis of photovoltaics versus traditional energy sources: Where are we now and where might we be in the near future?

A precipitous drop in the price of the crystalline silicon solar photovoltaic (PV) modules typically employed for residential applications has recently been observed: The typical sales price for modules was around $4/W_{P DC} in 2008 but could easily approach $1.50/W W_{P DC} by the end of this year. As module price declines continue, and as gains are also realized in balance-of-system costs, the economics of PV systems for power generation become increasingly competitive. In this presentation, we will examine whether solar will reach grid parity in the United States if monocrystalline silicon modules achieve an optimistic-case scenario in efficiency and cost. The analysis suggests that PV systems are already economically viable in select markets, but further cost reductions and efficiency improvements above and beyond the monocrystalline optimistic-case scenarios are necessary in order to be competitive against incumbent electricity production in most markets across the United States.