Solar energy costs plummeting in USNovember 30, 2012
Report highlights the growing affordability of solar energy
The cost of solar energy installations continues to decline in the U.S. The Department of Energy’s Lawrence Berkeley National Laboratory has released a new report highlighting the price of conventional solar energy systems throughout the country. The report shows that prices have been dropping, making solar energy more viable for homeowners and businesses in the U.S. The report also notes that some government incentives, mostly those offered by state governments, have also helped drive down the cost of solar energy installations.
Installation costs drop 14% in 2011
According to the report, the cost of solar energy dropped significantly in 2011, a trend that has carried over into this year. The report shows that the average cost of solar installations fell by 14% in 2011, with California seeing the most significant price reductions in the first six months of 2012. While the federal and state governments have had some role to play in the falling prices of solar power, the report suggests that there is a much larger contributing factor.
Supply cited as major contributor to declining costs
The report attributes the falling prices of solar energy installations to the declining cost of the technologies that are used in these systems. Solar panels and other technologies are becoming much less expensive, largely due to the fact that the market is being saturated with affordable products. Most of these products come from China, which has committed a sizable portion of its industrial strength to the producing of solar technologies. The country has been keen to inundate the global market with these products, a practice that has sparked trade disputes with the U.S. and some European countries.
Incentives help, but some are disappearing
Government incentives have also played a significant role in increasing the demand for solar energy systems. More consumers have been adopting solar energy because it has become more affordable to do so, backed by government incentives that reward them for generating clean electricity. The report notes, however, that as solar energy becomes more successful, the incentives being provided by federal and state governments is also dropping.