For all the talk about solar, the US market for solar power still has a long way to go before it makes a real dent in the country’s overall power capacity.
On Monday morning, Bloomberg New Energy Finance, a major aggregator of green industry data released a few key projections: the US solar market is on track to grow 30x to 44 gigawatts by 2020 and could make up 4.3% of America’s total power capacity. Of this fraction, the bulk (or approximately 68%) will be in photovoltaics with solar thermal making up the remainder. Furthermore, Bloomberg predicts that consumer traction will also move noticeably higher, with 2.4% of homes solar-equipped by 2020.
Of course, that path to 4.3% of national power capacity is not cheap. In order to get there, the US market will need to attract $100 billion in investment dollars.
The possible leap from 1.4GW to 44GW is an impressive growth curve, but these figures certainly highlight the simultaneous growth and challenge of solar installation.
As Bloomberg New Energy Finance points out, the surge in solar capacity has been supported by two crucial trends: the drop in prices (the price of photovoltaic modules has tumbled from roughly $300 per watt in the mid-20th century, to less than $5 per watt today) and the heavy hand of government support. And yet, even as solar becomes more affordable, it’s still playing catch up to other sources of energy. That may be a well known fact but it often gets muffled in the bucolic vision for solar panel farms as far as the eyes can see.
“The group’s latest analysis places the unsubsidized cost of best-in-class photovoltaic and solar thermal electrivity generation at just below $200/megawatt hour— nearly four times the equivalent cost for a coal-fired power plant ($56/megawatt hour)— and between two and four times the cost of onshore wind power, ” according to the Bloomberg report.
On the investment front, it will be interesting to see how the solar industry fares in the money race. Overall, the sector has been a major beacon for investment dollars but momentum has recently waned. According to a Mercom Capital report for the third quarer, VC funding for the solar sector was $169.35 million on 11 deals, versus $922 million for 18 transactions in the prior quarter. On the flip side, there was strength in other funding sources (including credit lines from banks), which totaled a healthy $20.7 billion for the quarter.
(Image: Flickr/Warm N’ Fuzzy)