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Solar grows, with government help

Energy Secretary Bodman Opens Solar Power System On Energy Dept. Build

In 2008, the U.S. Department of Energy unveiled 891 photovoltaic modules on the roof of the the department's Forrestal building roof in Washington, DC. 

The White House announced new initiatives to support more solar development this week. But the Department of Energy’s inspector general cast a cloud, with a report slamming a $68 million loan guarantee gone wrong—shades of the Solyndra failure.  

However, solar has actually been growing by leaps and bounds. It provides a little less than 1 percent of U.S. electricity— enough to light more than two million households. Other numbers sound even more impressive.

"More solar has been installed in 18 months than in the previous 30 years combined," says Ken Johnson, vice president of communications for the Solar Energy Industries Association.  "The cost of installed solar systems have dropped 50 percent since 2010."

"Over the last five years, costs have come way down, particularly for large-scale solar installations," says Severin Borenstein of the University of California's Haas School of Business.  "They are almost competitive in some areas now with regular fossil fuel power."

Home installations, he says, are more qualified.

"Some people can save money by putting in solar on their house," he says. "Most people still won't save money."

Solar is competitive only because of government subsidies— many in the form of tax breaks. Borenstein says the calculations are complicated, but federal tax breaks alone can give back almost 45 percent.

That investment is paying off, says Shayle Kann, senior vice president of research at Greentech Media. "It's created a market that has driven costs down year over year," he says. "And why the drop in price accelerates is because there's learning that is done from all these installations. There are economies of scale. 

"There's been a huge storyline about panel prices falling," he says. "Actually, in 2013, the price of panels rose a little bit, and despite that, system prices fell. And that’s where learning from increased deployments makes a huge difference."  

About the author

Dan is a sustainability reporter for Marketplace.

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