Study says solar power now cheaper than what analysts think

Solar power is much cheaper to produce than what most analysts would have us think, finds a new study from Queen’s University which states that few recent studies consider recent technological developments and price reductions.

According to Dr. Joshua Pearce, adjunct professor at department of mechanical and materials engineering, the real cost of solar in 2011 is $1 per watt for solar panels, bringing solar photovoltaic systems near the point where they can produce energy for about the same price as other traditional sources of energy.

Joshua Pearce, a professor in the department of mechanical and materials engineering at the university in Kingston, Ont., says solar power has reached the point where it can be produced for about the same price as more traditional forms of energy.

"Many analysts project a higher cost for solar photovoltaic energy because they don’t consider recent technological advancements and price reductions," says Pearce. "Older models for determining solar photovoltaic energy costs are too conservative."

When estimating the cost of solar energy for consumers, analysts factor in a number of variables including installation, maintenance, finance charges, life expectancy of the system and the amount of electricity that it will generate.

The cost of solar panels has dropped 70 per cent since 2009, Pearce says. The cost of solar power equipment is based on dollar per watt of electricity produced. While a 2010 study pegged the cost at $7.61, and a 2003 study set it at $4.16, Pearce puts the price in 2011 at under $1 per watt when solar panels are bought in bulk on the global market, though he acknowledges that system and installation costs can vary widely.

Pearce, who leads a project studying the effects of weather conditions on the output of 95 different types of solar panels, says research shows that the productivity of the top-of-the-line panels drops between 0.1 and 0.2 per cent a year -far less than the factor of one per cent used in most estimates.