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With government incentives, solar power gets cheaper, more popular

With government incentives, solar power gets cheaper, more popular

Posting in Energy

Incentives for solar energy have encouraged an increase in the number of solar installations in the U.S. and reduced the initial cost of them, according to a new report.

Incentives for solar energy have encouraged an increase in the number of solar installations in the U.S. and reduced the initial cost of them, according to a new report.

After a three-year plateau, solar costs decreased by 3.6 percent from 2007 to 2008, according to a report (.pdf) released Wednesday by the Lawrence Berkeley National Laboratory.

According to the report, the cost of installing photovoltaic solar systems -- excluding tax credits or other financial incentives -- was $10.80 per watt in 1998 versus $7.50 per watt in 2008.

With incentives and tax credits factored in, the average cost of installation was $2.80 per watt for residential photovoltaic in 2008. The average cost of commercial applications was $4.00 per watt.

Rising fuel prices since 1998 and increasing government incentives for alternative energy helped lower prices, according to the report.

Since 2007, photovoltaic installations in the U.S. have been on the rise. In fact, an estimated 293 megawatts of photovoltaic was added in the U.S. in 2008 alone. That's more than half of the 566 megawatts of solar power added in the nation since 1998.

More favorable federal investment tax credits were adopted for commercial photovoltaic systems in 2006. Figures from the report refer to grid-connected systems only.

The report estimated the cost outlay for 52,000 residential and commercial installations -- roughly 71 percent of all grid-connected photovoltaic systems installed in the U.S. between 1998 and 2009. No data for systems off the grid was included in the report.

Interestingly, solar's taking off overseas, too: 5,948 megawatts of photovoltaic were installed worldwide in 2008. That's in contrast to 2,826 megawatts in 2007.

In terms of photovoltaic installation, Spain leads the way, followed by Germany and the U.S., according to the report.

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Andrew Nusca

Editor Emeritus

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He is based in New York but resides in Philadelphia. Follow him on Twitter. Disclosure