Finally, the efficiency of the solar cells themselves has improved. Early this year, researchers at Germany's Fraunhofer Institute for Solar Energy Systems created a solar PV cell that’s 41.4% efficient, beating the record held by the Colorado-based National Renewable Energy Laboratory by almost percent.
The cost of solar energy production on a kilowatt-hour (kwh) basis, with all government subsidies netted out, has dropped 8 percent from a peak of 22.04 cents/kwh in January 2002 to 20.40 cents/kwh in July 2009.
That efficiency is trickling down the supply chain to customers.
Solarbuzz estimates that the “customer price” of an average, flat-roof-installed, 500-kilowatt solar energy system — a size typically used by an industrial user that includes the panels, inverter and grid connection hardware — dropped by 0.7 percent alone from June 2009 to July 2009, to about $2.4 million.
Manufacturers and installers of solar modules are looking for new ways to decrease costs, lower prices and attract customers, at a time of rising demand; that race for profit could be seen at the second annual Intersolar 2009 trade show, was held in mid-July in San Francisco.
In addition to silicon ingot, wafer and solar cells makers like Canadian Solar, there were firms like Applied Materials and Alcatel, which are intent on squeezing efficiency out of the process of making solar PV modules
“Everyone’s looking for any way they can reduce pricing,” says Jefferies cleantech analyst Paul Clegg. “Everyone wants to drive a market without subsidies.”
Clegg sees more vertical integration, with firms offering everything from silicon ingot production, to module manufacturing, to solar PV project planning and development services. He says creating a larger footprint, even as a defensive move in this economic climate could be the norm.
Eric Roiter, president of Framingham, MA-based Baker Solar, a maker of wet process equipment critical to solar cell manufacturing, says the market appears to be coming back to life after financing first froze last year
He says that puts Baker in a good position, because his firm can help clients reduce costs. “There’s a lot of pressure on CAPEX [capital spending] and it’s helping us.”
All of these gains in efficiency could see solar energy reach the key goal of parity with coal within the next few years.
Boston-based solar consultants Photon Consulting expects solar production in Spain, a key European solar energy market, to fall to 10 cents/kwh in 2010 — roughly the same as the cost of building a new coal-fired plant.