How Fast Are The Costs Of Solar Really Coming Down? Recent Gains Do Not Promise Sustained Growth

Despite the long-standing assertion by proponents that solar energy is nearing a breakthrough, the failure of solar energy to achieve significant market penetration despite heavy and sustained public subsidies over the last two decades is no mystery. The costs of scaling solar remain reliably higher than not only fossil energy but also other non-fossil alternatives, most notably nuclear. Continued growth of solar will require continued heavy subsidies for the foreseeable future.

(…snip…)Bottom line, even cherry-picking best case solar facilities, ignoring heavy subsidies, ignoring artificially low module prices, ignoring costs of backing up solar and balancing intermittency, and assuming the worst case for nuclear in terms of cost overruns, scaling solar still costs substantially more than scaling nuclear today. While nuclear has displayed negative learning rates in many countries, recent nuclear deployment efforts have achieved substantial reductions in upfront capital costs over time, including in South Korea and China. Moreover, due to the difficulty of exporting soft cost gains and to enduring austerity, solar cost declines experienced recently will likely prove difficult to sustain and replicate globally in the coming years.

The Breakthrough Institute published a new report on low-carbon energy options on July 3, 2013. The reports tackles the question “Can solar electrical generation realistically scale to displace coal and gas-fired plants?”. This is a complex issue which definitely does not lend itself to sound-bite media appetites. I found the report to be objective and well-supported by suitable citations.

The conclusions will offend solar fans – especially those who are also anti-nuclear. I hope that those readers will not reject the report without first studying the linked citations. I will be watching for reasoned criticism of the report. Meanwhile, here is an excerpt from the conclusions:


Recent relative gains in solar costs and deployment provide a highly questionable basis for sustained progress over the coming decade. Costs remain high and are declining significantly more slowly than proponents suggest. Module costs will continue to decline over the long term, as solar efficiency improves and manufacturing efficiencies are realized. However real module costs have not come down as quickly as proponents claim. Nor do module costs represent the primary barrier to low costs.

Balance-of-system and other soft costs now represent the lion’s share of installed solar costs, particularly for rooftop solar, which cannot benefit from economies of scale, as large industrial solar installations can. Lacking some major breakthrough in solar installation technologies, solar deployment is likely to remain costly and labor intensive. Reductions in cost will come incrementally, in response to the scale up of domestic solar industries and will continue to require heavy, sustained subsidies in order to realize.


Scaling solar without heavy subsidies will require bringing both module and installation costs down dramatically, significant breakthroughs in electricity transmission and storage, and perhaps greater pursuit of centralized solar plants that can benefit from economies of scale and superior citing. As a long-term strategy to develop better and cheaper technologies, continuing and even expanded solar subsidies may be justified. But heavily subsidized solar does not represent a serious short-term strategy to replace either fossil energy or nuclear.

Please read the whole report.

2 thoughts on “How Fast Are The Costs Of Solar Really Coming Down? Recent Gains Do Not Promise Sustained Growth

  1. About an hour ago, I watched a PBS program about renewables in Deutschland. The program included statements by some German citizens. The impression that the program tried to convey was that Deutschland is well on the road toward getting most of its power from renewable sources with only a tiny amount coming from lignite. They expect to be setting an example for the rest of the world.

    Interestingly, when a solar PV installation was shown, all the panels were covered with show.

    I have my doubts. I strongly suspect that within a few years, after spending oodles of billions of dollars, they will reluctantly conclude that they are on the wrong track.

    Following is a letter which I just mailed to my U.S. representative:

    Friday, July 5, 2013

    The Honourable Michelle Lujan Grisham
    214 Cannon House Office Building
    Washington, DC 20515


    Dear Representative Grisham:

    Attached is an e-mail I received from you; it did not address the subject. It did not even mention nuclear power.

    As I stated when I contacted you via e-mail, we must greatly increase the use of nuclear power to solve the problem of global warming. Wind and solar energy are in-termittent and diffuse sources of power; they cannot do the job. Improving energy efficiency will help only slightly. Moreover, as developing countries demand more and more power, global demand for power will, by the end of the century, be three to four times greater than it is now.

    Although there are problems with our current nuclear power technology, its risks are insignificant compared with the problems that would result from global warming. Until we develop a better nuclear technology, and we can, we should rapidly expand our use of the current pressurized water reactor technology.

    To phase out both our current nuclear technology and fossil fuel usage, we should go onto a crash program to prepare a better nuclear technology for implementation. The better nuclear technology should be safer, more economical, and greatly reduce nuclear waste. One promising nuclear technology, which has been successfully tested in prototype form, is the liquid fluoride thorium reactor (LFTR). Unfortunately, R & D funds for it were prematurely withdrawn; the funds should be immediately restored. Also, other nuclear reactor technologies should be considered.

    You can do what seems to be politically correct at the moment and be excoriated in the future, or you can do the right thing and push for greatly expanded R & D to replace our current pressurized water reactor technology. Which will it be?

  2. >>when a solar PV installation was shown, all the panels were covered with show.

    Heh, snow indeed. I wonder if that demonstrates just how clueless the TV journalists are?

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