Rhein on Energy and Climate

The leading Norwegian manufacturer of photovoltaic cells and panels expects PV power generation costs to decline to only 8 cents/kWh as of 2010, provided installations benefit from at least 1800 hours/year of sunshine. That is the case in the countries around the Mediterranean, the southern parts of the USA, India, China, Australia and many other parts of the planet.

This concurs with the view of major international competitors who also forecast substantially lower electricity costs from PV, due to economies of scale and technical innovations.

A cost of 8 cents/kWh will be a huge jump forward from more than 50 cents some 25 years ago, when few people believed that PV would ever be able to compete with what then appeared as the more advanced solar-thermal technology. It is still about twice as high as the cost of electricity generated in modern coal-fired power plants. However, considering that PV constitutes a technology designed to generate electricity in office buildings, factories or residential buildings without transmission costs, the cost differential is less than 4 cents/kWh and bound to shrink further in the coming decades due to rising costs of fossil fuels and further economies of scale for PV cells and panels.

Those visionary European dreamers who have relentlessly pleaded for decentralised PV power generation can mark a point. In the Mediterranean, their vision may become true in the medium-term future: each household will generate its own electricity, after providing already – at least in Isreael, Cyprus and Greece – for its own solar-heated water.

It will be a long march though. In 2007, the additional PV capacity world-wide hardly exceeded 4000 MW, the equivalent of three modern coal-fuelled power plants. But PV power generation is the fastest growing segment in the world-wide electricity business, faster than wind, solar- thermal, nuclear, geothermal, let alone gas- or coal-fired power plants.

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