My previous post showed a chart of the falling price of photo-voltaic (solar) cells. This shows the same data, but plotted with a log scale, which helps you see the percentage moves more clearly. I've added the forecast for 2014 (50 cents!) which I got here. The cost per watt has fallen at 18% per annum for the last 10 years, and extending that trend forward will bring the cost down to roughly 40 cents by the end of 2015.
Note that this cost is the cost of the panel. In other words, in 1977 a 1 kW panel cost $76, 670 and will by the end of this year cost just $500. It is not the cost of the electricity generated. With solar panels which require no maintenance and last 25 years, you have to take the hours and the angle of sunshine and depreciation/interest charges to work out what that cost is. As the cost of solar panels themselves falls, then solar power from photovoltaic cells will also fall, until it reaches what is called grid parity, where it's cheaper to add a solar system than build a new power station. In the whole of the southwest US, southern Europe, Japan, Southern China, Africa, South America and of course Australia, PV electricity has already reached grid parity or will this year or next. This is true even even at the much lower wholesale cost of electricity. But the beauty of solar panels is that you can put some on your own roof. Which means that you save yourself the retail cost, usually 2 -4 times higher than the wholesale price. This pretty much makes most of the world at grid parity or below, except for Canada and Northern Europe.
This website is helpful calculating how much you will save/make depending on where you live. In the case of Oz, the price used in the calculation is close to the feed in tariff (8 c per kWh) But the cost of electricity in Victoria is around 30 c/kWh, and to the extent you're saving yourself that, a one kW panel even including installation and inverter will pay for itself in 2 years.
What is clear is that for most of the world between, say, 45 N and S, electricity generated by PV cells either is or will soon be cheaper than coal-powered electricity. Of course, there is the problem of "base load" (the power you need when the sun isn't shining) but wind power is also falling in cost as are batteries. In fact a newly discovered electricity storage technique is "over two orders of magnitude" (i.e., more than 100 times) as efficient as previous capacitors. Of which more later.
Despite the climate change denialists and powerful coal and oil lobby groups, CO2 emissions will peak soon and start falling fast. Oil and coal will become feedstocks for plastic. And the world will go electric.
The best news I've had in ages.
[Update: The European Community has forced Chinese PV panel exporters to set a minimum price on PV exports to the EC. That has temporarily stabilised the price fall, so we less likely to see $500 per kW by the end of this year]
Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. While I do make mistakes, I try hard to do my analysis thoroughly, and to make sure my data are correct (old habits die hard!) Also, don't ask me why I called it "Volewica". It's too late, now.
BTW, clicking on most charts will produce the original-sized, i.e., bigger version.