26 February 2009

Solar power costs going down

Solar power has plenty of supporters, and why not, generating power from the sun seems to be a no brainer. But the problem always comes down to cost. Why pay more for solar power?

First Solar, a Tempe, Ariz.-based maker of photovoltaic cells said government subsidies from Germany are helping to make the solar industry competitive.

That is why the global photovoltaic cell maker said it had reached an industry milestone by reducing its production costs from $3 to just under $1 for making solar cells that produce one watt of power.

First Solar, which has produced modules for solar installations in Europe, brought costs down to $.98 over the past four years through economies of scale by increasing its production capacity by 50 times, and by passing those savings on to customers and consumers.

“This achievement marks a milestone in the solar industry’s evolution toward providing truly sustainable energy solutions,” said Mike Ahearn, First Solar chief executive. “Without forward-looking government programs supporting solar electricity, we would not have been able to invest in the capacity expansion, which gives us the scale to bring costs down.”

Much of that investment has come by way of tariffs, which allow solar operators, large and small, to earn a higher price for each unit of energy they produce for a grid than utilities reliant on electricity from dirtier sources like coal. The higher tariffs help operators to cover the comparatively higher cost of production.

“This represents a major milestone for the solar industry,” said Ken Zweibel, director of the Institute for the Analysis of Solar Energy at The George Washington University and former Program Leader for the Thin Film Partnership Program at the National Renewable Energy Laboratory in Golden, Colo. “In order to address climate change in a meaningful way, we need energy technologies that are affordable, scalable, and have a low environmental impact on a life-cycle basis.”

For related information, go to www.isa.org/manufacturing_automation.