Astute observers in the power industry say that in the next 20 years, the United States will meet its electrical energy needs from solar energy in full.
They based this projection on the fact that a 30 per cent increase in solar energy production every year means that an increase of 1 per cent today will result in a growth of 1.3 per cent in 3 years. If this projection hits the mark, the United States will see a 128-fold increase in their solar energy production within 20 years. American solar energy industry analysts believe that there are key factors why this projection can be achieved. One of the reasons is the cost of falling prices of solar panels. At the moment, the cost of producing photovoltaic cells is dropping exponentially. Over the past few decades, the cost per watt of silicon PVs is continuously falling. From a high of $76 in 1977, the cost of an average photovoltaic cell today is less than $0.36. Because of their falling prices, there is now an upswing in solar power in the United States. There are six times more installations of American solar power systems than the installations made in 2010. The cost of a solar installation has also gone down by about 60 per cent. Considering this upward trend, analysts are now confidently predicting that by the end of 2014, there will be a 29 per cent rise in solar system installations in the United States.
So What are the Influencing Factors?
Solar power is indeed on the rise, but the question is how will the United States be able to capitalize on this market growth? As it now stands, most of the solar panels used all over the world, about 60%, are made in China. Only a dismal 5% is produced in the United States. One individual who wants to change that imbalance is Elon Musk of Solar City. He bought Silevo, a company producing American solar panels, to drive down the production costs in the United States.
The second influencing factor is the technology of satellite-Earth imaging. It enables solar companies to make quick and accurate decisions on solar installation. By using this technology, a company can check out a prospective customer’s rooftop on Google Earth and ascertain in a short time if he is a good solar installation candidate.
The third reason for the positive solar power projection is the improvement in the technology of battery storage. More and more companies now have the ability to collect solar energy during the day, and time-shift their use into the night.
There has been a very significant reduction in the cost of battery storage, about 50% in the past four years. If this trend holds up, the world can expect an additional 50% reduction by the year 2020. Apart from this cost reductions, battery production is also projected to dramatically increase. For instance, Tesla’s Gigafactory is poised to produce 35 Gigawatts of batteries by 2020. This is more than the world’s total production capacity in 2013.