For decades, solar energy has been touted as an alternative energy source. However, increasingly, solar energy is being compared to traditional energy sources as a viable and cost-effective option for electricity.
When solar power burst onto the scene in the 1980s, no one was economically advocating for its inclusion in America’s utility fleet. The argument in favor of solar energy was mainly environmental. Photovoltaic (PV) panels generate energy without carbon emissions and without constant need for fuel. However, since 1998, the cost of the panels has been reduced by approximately 8% each year. Now, it is reaching what is known as “grid parity,” which means that the electricity produced by photovoltaics is competitive in costs per kilowatt with electricity from natural gas or coal plants. At the point of network parity, tech advocates can use both pure cost analysis and environmental benefits to make the case. Recently, the EPA published its Clean Power Plan, which is likely to define the Obama administration’s environmental legacy. The plan calls for a 30% national reduction in carbon emissions by 2030. While environmental benefits were certainly part of the motivation behind the plan, the feasibility largely depends on the affordability of renewable energy technology.
Traditionally, America’s electric companies are vertically integrated monopolies. Vertical integration means that a company produces and delivers a product to consumers. Solar power, however, is already breaking that vertical model. While it doesn’t make sense for everyone to have their own coal plant, photovoltaic electricity gives all Americans the opportunity to produce their own energy. This is known as energy democratization. Today, people have an unprecedented level of choice. With this choice, many homeowners are working the numbers and realizing that an investment in their own electrical production can save them thousands of dollars over the life of the system.
It’s not just people taking advantage of falling prices on their own rooftops. The utilities themselves have seen the writing on the wall and started investing in large-scale solar systems. There are now several solar energy farms located throughout the United States. They are strategically built in areas with high solar resources, such as the Mojave Desert. The largest of these farms has a production capacity of more than 500 megawatts.
Americans are increasingly aware of the need for a clean energy future and the economic benefits of producing electricity at home. Solar energy is becoming the economic and environmental choice of the future.