PV Costs Dropping in 2010

With New Jersey, California and other heavy alternative energy states causing PV installations to double and triple over the last five years, the US is poised to take the lead in the race for the most solar power produced. Costs continues to be an issue, but new grants from the federal government make initial setup a viable investment for many – and more financial relief is on the way.

In 2005, it was predicted that the solar industry would see a rapid decline in costs by 2010, making PV a mainstream power option. *

Global production of solar photovoltaic (PV) cells doubled almost twice between 2000 and 2005, and grew an additional 41 percent in 2006 alone. Grid-connected solar capacity provides less than 1 percent of the world’s electricity, but this figure is set for rapid expansions as the US surges to the forefront making PV easier and more cost effective to obtain.

US federal incentives, loans and grants along with state funded rebates for homeowners and businesses which install photovoltaic systems have boosted the country’s move towards alternative energy sources, with states like New Jersey leading the way.

Those who install photovoltaic systems can now see their costs cut up front by both loans and tax breaks, allowing them to set up systems with little cost up front. Solar Renewable Energy Certificates, or SRECs, can further defray the cost, paying down the loans and providing a free and clear system in less than five years in some cases.

At that point the SRECs become a source of income (they trade on the open market for prices ranging from $585 to nearly $700 in New Jersey) – plus electricity costs continue to be largely defrays be the energy output of the system. The benefit to business owners is tremendous – a one time investment can yield up to 20 years of service from a dependable PV system that actually earns money.

All of this has led to the rising number of business owners who opt to install PV systems, and the cost as defrayed by the many incentive programs has effectively dropped approximately 40% as detailed by the 2005 report.

(*Assessments made by the Worldwatch Institute in Washington, D.C., and the Prometheus Institute in Cambridge, Massachusetts).

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