The Obama administration says that SunShot, the R&D program aiming to bring down the cost of solar-generated electricity to where it’s competitive with conventionally sourced electricity, is 60 percent of the way toward its goal, at least when it comes to big solar.
Citing levelized cost of energy data from the National Renewable Energy Lab, the Department of Energy said last week that “the average price for a utility-scale PV project has dropped from about $0.21 per kilowatt-hour in 2010 to $0.11 per kilowatt-hour at the end of 2013.”
Source: U.S. Department of Energy
The DOE noted that the average retail price of electricity in the U.S. is 12 cents per kilowatt-hour. That said, utility-scale solar electricity doesn’t really compete with retail electricity (whereas distributed, or rooftop solar, does) -- which is why SunShot has a 2020 goal of getting solar down to 6 cents per kilowatt-hour, in the neighborhood of the cost of new natural-gas-fired generation.
The administration didn’t point to specific SunShot investments that have impacted the cost of utility-scale solar, but the program has supported a wide range of research and development efforts, typically with six- or seven-figure awards, though occasionally larger. Many of the funding opportunities have been applicable to distributed solar, but an example of a SunShot program aimed at utility-scale solar would be the $25 million grant to Soitec to open a plant in San Diego. The company makes concentrating photovoltaics panels that are used in utility-scale plants in sunny areas like the U.S. Southwest.
Surely a much bigger factor has been the precipitous and fortuitous decline (well, maybe not for Solyndra) in the price of solar PV, so steep that power plants that had envisioned using solar thermal have switched to PV. The factors there have been a host of market forces: demand slipping from high growth rates, polysilicon plunging in price, and the overextended Chinese manufacturing sector dumping cheap panels all over the world. The administration’s loan guarantee program has helped utility-scale solar, as well, by getting several big plants launched and demonstrating their viability, and the administration can also take credit for aggressively permitting large amounts of big solar on public lands.