On Tuesday Biden administration hinted at Solar Energy potential in supporting a huge chunk of US power consumption. They said that solar could provide 40% of the country’s electricity by 2035 if the government enacts supportive policies.To meet this target, the Department of Energy said that Solar Energy growth rate will need to triple or even quadruple by 2030. That means costs will have to keep dropping.
The cost of the solar system depends on variables including size, whether it’s purchased outright or leased and power prices in the specific location. The Levelized cost of Solar Energy allows it to be compared to other forms of power generation and has fallen more than 70% over the last decade. The costs will need to continue to decline to meet these growth goals. The Department of Energy’s goal is for the Levelized cost of energy for a solar residential system to reach 5 cents per kilowatt-hour by 2030, down from 50 cents in 2010.
Commercial costs are assumed to fall from 39 cents in 2010 to 4 cents by 2030, while utility-scale solar needs to decrease from 27 cents last decade to 2 cents by 2030. U.S. solar installations hit a record high in 2020 as falling costs and supportive policies boosted demand, and the industry is expected to post another banner year in 2021.
The Department of Energy pointed to several actions that could stimulate solar buildout, including clean energy tax credits. The Investment and production tax credits, which were extended on a short-term basis in December, have been instrumental to solar’s adoption.