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. But I can't by law give you advice, and I do make mistakes. Remember: the unexpected sometimes happens. Oddly enough, the expected does too, but all too often it takes longer than you thought it would, or on the other hand happens more quickly than you expected. 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.

Monday, April 6, 2015

Cost of installed solar over time

Another chart showing how installed solar panels costs (i.e., all costs; the panels themselves, installation, inverters, connection to the grid, finance, etc) are falling  over time.

Note that this is the cost per kilowatt of capacity, not per kilowatt of output.  At peak output, on the solstice, with the panel precisely aligned at 90 degrees to incoming solar rays it will produce close to nameplate capacity, for a couple of hours.  But obviously, at night it's not producing, on rainy days its output is less, etc.  Still, those factors are stable from year to year for each location, so the fall in cost of the electricity produced will have declined pari passu.  Note also that it is not a log scale, and since the decline over the period in arithmetical terms is broadly constant, it means that the rate of decline has speeded up.  On a log scale, the downward slope would have increased.  Solar is already similar in cost to coal and natural gas.  And the cost of solar power will almost certainly go on sliding.  The decline in the total cost of installed solar (i.e., all costs) has fallen about 8% per year over this period.  My guess is that as we get used to solar and move down the learning curve, everything will get a lot cheaper: panels, installation, connection, permitting, inverter, finance, and so on are a declining curve.


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