The big number is 50. When companies can produce solar photovoltaic modules for less than 50¢ per watt, solar energy will be able to compete directly with coal. Right now, the cheapest solar cells are being produced for as little as 70¢ per watt. They are selling for about $1.26 per watt, with prices expected to drop to $1.17 next year. Most anticipate they they will hit 50¢ per watt within four or five years.
To get a sense of just how much prices have declined, one of the biggest manufacturers, Tempe (Ariz.)-based First Solar (FSLR), was selling solar power panels for $3 a watt in 2005.
As prices fall, demand is growing. Total solar installations in the second quarter grew by 69 percent over the same period in 2010. The number of Americans working in the solar industry more than doubled, to 100,000, from 2009 to 2011, according to the Solar Energy Industries Assn. That’s considerably more than the 80,600 coal miners working in the U.S., according to the Bureau of Labor Statistics.
“At the point where you say, ‘It’s cheaper to use solar than natural gas or coal,’ that’s when you’ll really see a rush,” says Jeff Siegel, managing editor of Green Chip Stocks, a research firm that focuses on alternative energy.