Installation cost, solar systems

The key is a reduction of costs. Solar panels are expensive since photovoltaic technology is still in its infancy. Although the price of PV cells has fallen significantly, PV electricity is still not without a subsidy. As more PV systems are built and installed, the market should result in solar electricity becoming more and more competitive. 

One problem has been the cost of the solar panels. Los Angeles began its solar program after state legislators mandated that utilities spend about 3% of their revenue on efficiency, conservation and renewable energy. For solar, the power department had 75 million to spend over a five year period. The power department would pay 5 for each watt of solar installed on a residence or business. Homeowners typically purchase a 1-or 2-kW system meaning that the municipal utility paid between 5,000 and 10,000 of the cost. The systems that are eligible for rebates must be... 

A solar photovoltaic system contains, in addition to solar cells and module(s), an array structure to support the modules, power-conditioning circuitry for control and modification of the output, and a means of storing energy if required. All elements beyond the module are referred to as balance-of-system (BOS) components. The cost of BOS items is nominally about equal to the cost of the PV module. However, the BOS fractional cost contribution can vary from one- to two-thirds of the total installed cost of a system, depending on application. 

In addition, solar panel installation is becoming more efficient as are cell and panel processing. According to analysts at the now defunct Lehman Brothers, costs for rooftop solar systems are likely to fall from 7.10 per watt in 2008 to 3.45 per watt in 2015. Some roof tile manufacturers are starting to incorporate solar cells into their roofing materials. 

A number of new solar power plants are under construction. In 2007, First Solar signed a contract to produce 685 mW of solar collectors over 5 years for 1.28 billion, or at a unit cost of 1.87/W. This might correspond to a 3/W installed cost. Southern California Edison is erecting a 500 mW plant designed by Solel Solar Systems of Beit Shemesh, Israel. It is scheduled to start up in 2009. 

In 2006, the unit cost of solar electricity from a typical 5 kilowatt (kWp) rooftop system was 30c /kWh in Germany, 19c /kWh in Spain and 22tf/kWh in California. By 2010, Photon Consulting estimates that solar electricity will be produced for 18c /kWh in southern Germany, 12c /kWh in Spain, and 13( / kWh in California. In the United States the typical capital costs including system installation were approximately 3,600/kWp in 2007, with some installations costing only 3,000/kWp. These prices are expected to drop further as government subsidies rise and mass production starts. 

If the solar system is less ambitious and designed to provide only part of the heat, the cost of the solar collecting system is less. In this case, the cost of the solar harvesting system must be added to the cost a second heating plant to heat the house when solar heat is inadequate. With the combined costs of solar and conventional heating systems, the dual system requires 15 to 20 years for the savings in conventional fuel costs to equal the cost of the solar collectors. Because of the complexity, maintenance problems and costs there is little incentive to install solar heating in homes. 

Installation costs are also likely to be high at this time. Initially, it will be a specialty product and sold like solar systems. 

As of this writing (1996), 354 MWe of privately funded, paraboHc-trough electric generating capacity was operating in California. These trough systems operate in a hybrid mode, using natural gas. Collectively they accounted for more than 90% of worldwide solar electric capacity. The cost of these systems fell steadily from 0.24/kWh for the first 14-MW system to an estimated 0.08/kWh for the 80-MW plant installed in 1989 (5). 

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