Here in Australia, we tend to think of solar as rooftop solar, because our retail electricity costs are so incredibly high (roughly 30 cents per kWh), and so solar is already cheaper than retail electricity, and has been widely adopted. But in the US, utility-scale, i.e., very large projects have been much more important.
The chart shows the price on the left, time on the x-axis, while the size of the circles shows the size of the contracts. The average yearly compound decline has been about 16%; the decline between 2013 and 2014 about 18%. ($50 per MWh = 5 cents per kWh) .
Now these costs are reduced because of an investment tax credit. That's worth about 2 cents per kWh. So when (if) the tax credit expires in 2017, new contracts will be more expensive. But by then the average cost will have fallen to about 4 cents per kWh, in another 2 years to about 2.5 cents per kWh. So the expiry of the tax credit will cause at worst a brief pause in the uptake of utility solar before the switch resumes. But I suspect that the tax credit will be extended, because it has become obvious to everybody who isn't a coal mine shill that global warming is real and continuing and that a switch to renewables is extremely urgent. This year is likely to be the warmest ever recorded, and since the PDO (Pacific Decadal Oscillation) should have been bringing falling global temperatures over the last decade, while temps have actually risen, even the blindest and most biased of observers must be starting to worry. More of that in another post soon.
[Read more of the article here]
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. I do make mistakes, but I try hard to do my analysis thoroughly, and to make sure my data are correct. Remember: the unexpected sometimes happens. The expected does too, but all too often it takes longer than you thought it would.
The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.
BTW, clicking on most charts will produce the original-sized, i.e., bigger version.