Economics

Economics

The U.S. Energy Information Administration calculates that, all-told, electricity from a Solar PV plants costs 4 times that of conventional coal.^[67] Bloomberg New Energy Finance in March 2011, put the 2010 cost of solar panels at $1.80 per watt, but estimated that the price would decline to $1.50 per watt by the end of 2011.^[68] Nevertheless, there are exceptions-- Nellis Air Force Base is receiving photoelectric power for about 2.2 ¢/kWh and grid power for 9 ¢/kWh.^[69][70] Also, since PV systems use no fuel and modules typically last 25 to 40 years, the International Conference on Solar Photovoltaic Investments, organized by EPIA, has estimated that PV systems will pay back their investors in 8 to 12 years.^[71] As a result, since 2006 it has been economical for investors to install photovoltaics for free in return for a long term power purchase agreement. Fifty percent of commercial systems were installed in this manner in 2007 and it is expected that 90% will by 2009.^[72]
Concentrated Solar Power (CSP) facilities produce power more cheaply than photovoltaic systems and may eventually be price-competitive with conventional power plants. The Ivanpah Solar Power Facility is expected to produce power at costs comparable to natural gas.^[73]
Additionally, governments have created various financial incentives to encourage the use of solar power. Renewable portfolio standards impose a government mandate that utilities generate or acquire a certain percentage of renewable power regardless of increased energy procurement costs.