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Cai Steger’s Blog

Solar Powers Ahead With Record 2012 Numbers

Cai Steger

Posted August 13, 2013

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August is turning out to be quite the month for clean energy. Last week, the U.S. Department of Energy (DOE) released a report showing that, in 2012, the American wind power market continued its impressive growth, with wind developers installing enough turbines to power almost 4 million homes.)

Yesterday, the DOE released another report on U.S. solar PV installations in 2012. In Tracking the Sun VI, there’s a another batch of especially good news. Some highlights:

  • In 2012, the nation installed enough solar PV to power more than 540,000 homes. By contrast, in 1998, the first year for which the researchers have data, all the grid-tied solar installed in the U.S. amounted to 33 homes-worth (not a typo). Solar is coming of age…

Solar PV.jpg

This Tracking the Sun VI chart graphs the exponential growth of solar PV in the U.S. over the last 15 years.

  • In 2012, the U.S. climbed into fourth place in solar installed, behind only market-leader Germany, Italy, and China.
  • Solar prices continued to fall.  For typical home-sized systems, prices fell by 14 percent; for systems sized for an average office building, the price drop was 13 percent; for larger commercial-sized systems, say on a Wal-Mart, 6 percent. In fact, since 2008, prices have fallen a mind-blowing 40 percent.   And prices should fall further in 2013, based on data from the first half of the year. 
  • Public policies and incentives offered by utilities, as well as by local, state and federal government are working as planned, cutting prices and speeding deployment.

If there’s any room for improvement identified in Tracking the Sun VI at all—it’s that non-hardware costs, often called “soft costs,” are higher than in many other developed countries. Therein lies an opportunity, though. The price of solar, which is already cost-competitive with fossil fuels in several localities, still has a lot of room to drop. If we put additional pressure on these types of soft costs, solar’s many benefits can become even more affordable to the many Americans who want it. In fact, if our soft costs, for things like customer acquisition, permitting and interconnection fees, and taxes, fell to German levels, we’d pay half as much for solar as we do now, and, in many places, pay less than the retail utility price for electricity.

The researchers who compiled Tracking the Sun VI have, impressively, monitored 72 percent of all grid-tied solar systems installed over the last 15 year—more than 200,000 arrays. Those systems range in size from ones smaller than a single kilowatt all the way up to utility-scale projects of 10 megawatts and more.

What these researchers have observed speaks to the popularity and increasing affordability of solar PV. Installations were once largely concentrated in California and New Jersey, thanks to market-leading incentives and pricing structures there. Now, increasingly, solar is diversifying geographically, so that it’s found more and more often in other states as well. (A recent Environment America report observed that 85 percent of American solar systems are clustered in the 12 states with the best solar policies and incentives.) “Financial incentives provided through utility, state and federal programs have been a driving force for the PV market in the United States,” the authors, based at Lawrence Berkeley National Laboratory, note.

To propel solar prices down further, the researchers recommend “some combination of incentive policy designs that provide a stable and straightforward value proposition, targeted policies aimed at specific soft costs (for example, permitting and interconnection), and basic and applied research and development.”

Luckily, many such efforts are already underway, through innovative programs like the DOE’s SunShot Initiative. It aims to make solar cost-competitive with other forms of electricity by the end of the decade. Other undertakings are designed to streamline the solar permitting process and cut its sizeable costs. (Check out these accomplishments in California’s East Bay and New York State.) Advocates are getting in on the action, too, through campaigns like Project Permit, which aims to help lower the too-expensive cost of solar permitting in municipalities nationwide. (Bad permitting processes can add more than $1,000 to the cost of an average home solar system.)

This August has brought us much good news about renewable energy growth across the U.S. Our elected officials should take note. By supporting the clean energy growth and policies that the overwhelming majority of Americans want, they can help build on technological and market innovations that are driving down the cost of technologies like solar PV. With their support, in future Augusts and all year-round, we can look forward to more good news, like that reported in Tracking the Sun VI.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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