The study, compiled by clean-tech research and publishing firm Clean Edge and green-economy non-profit Co-op America, predicts that the cost of energy produced from solar photovoltaic cells will decline from today's average of $6 per peak watt to an average of just $1.5 in 2025. This, together with the advantages of solar energy (zero carbon-based emissions, energy delivered at source, zero fuel costs), should make solar a "ubiquitous" energy source in the future, says the study.
The EU has set itself a target of producing 20% of its energy from renewable sources by 2020, although no specific commitments on solar have been included. Studies indicate the contribution made by solar to be modest, with the European Renewable Energy Council suggesting it will contribute little more than 1% by 2020 (EurActiv 20/06/07).
But Alisa Gravitz, Co-op America's executive director and the project director of the study, believes that as "capital and fuel costs have doubled or tripled for coal, natural gas and nuclear power over the past few years, solar power costs are coming down". She adds: "For the first time in history, cost-competitive solar power is now within the planning horizon of every utility in the nation."
Based on findings, it calls on the US to reach a standard of 10% solar by 2025. It sees a need for action to be taken by utilities, solar companies and regulators alike.
It suggests utility companies should take advantage of solar energy to ease grid congestion at peak hours and adapt to new market realities with new business models. Additionally, it calls for solar companies to scale down solar system costs to around $3 per peak watt by 2018 (currently at around $6) and streamline installations by making them a "plug-and-play technology".
Regulators and policymakers should implement long-term investment and "production tax credits" for the renewables sector, it says. Utility companies should be given the opportunity to rate-base solar energy and set up open standards for solar interconnectivity.
However, the cost of achieving the stated goal of 10% solar by 2025 "is not small", according to the report. It calls for $560 billion to be invested in that time period, equalling around $33 billion a year.