Forecast: Cost Of PV Panels To Drop To $0.36 Per Watt By 2017

Credit: Solar Reserve

by Nicholas Brown via Clean Technica

The cost of photovoltaic solar panels is expected to drop to 36 cents per watt by 2017, according to new research by cleantech market research firm GTM Research.

While this drop in solar panel prices will help to make solar affordable to more people, which will increase the size of the solar market, this ongoing cost reduction means much more than that.

Currently, solar panels are backed up by natural gas and various other types of power plants on the electricity grid. However, solar panel costs of $0.36 per watt make it more feasible to install additional solar panels to back each other up instead of using any other type of power plant (for off-grid setups), reducing the need for batteries.

For example: If you need 1,000 watts of power, and your 1,000 watt solar panel generates only generates 50 percent of its capacity (500 watts) due to cloudy weather, that can be compensated for by using two of those 1,000 watt panels instead of one, so you could still draw 1,000 watts from that 2,000 watt (nameplate capacity) array.

As long as the solar panel array is generating more current than is being drawn from it, there is no power disruption or power fluctuation (provided that voltage regulation is used).

Each 1,000 watt panel would cost $360 without factoring in installation costs, but they would last about 6 times longer than batteries.

Assuming the batteries required are charged at their recommended rate, they would end up costing $1,980 and they would have to be replaced more frequently than the extra solar panel — plus, there is an installation fee for the batteries as well, except for DIY people.

Suddenly, that $360 sounds good. Even after factoring in the fees required to install that extra panel, it is likely still much cheaper than expensive batteries.

Anyway, we can’t be certain about anything yet. We will have to wait and see. And these are simply market projections.

“Yesterday’s PV cost reduction roadmaps are no longer relevant today,” said Shyam Mehta, Senior Analyst at GTM Research and the report’s author. “Three or four years ago, the industry was targeting one dollar per watt costs in 2013; today we are at 50 cents per watt, and there is currently little consensus on what is a realistic goal for the module supply chain to set for itself over the next three to five years. This is not only important for these manufacturers and their investors, but for installers and project developers across the globe.”

Reprinted from Clean Technica with permission.

25 Responses to Forecast: Cost Of PV Panels To Drop To $0.36 Per Watt By 2017

  1. fj says:

    Very encouraging.

    We are truly in the age of technological metamorphosis where mechanics is changing into electronics.

  2. Omega Centauri says:

    I think we are moving the other direction with respect to storage being provided/mandated with renewables. GE is marketing a storage option with its new Brilliant wind turbine, because being able to buffer unexpected output variations doesn’t require a lot of capacity, and it allows renewables to play better with the grid. Similarly for PV. On party cloudy days PV output can vary dramatically in seconds. The more penetration PV and wind have, the more important buffering of power flows will be.

  3. Bob Maginnis says:

    My experience is that PV output drops to about 5% during cloudy days, so PV can’t really back up PV. Lots more comments at

  4. fj says:

    Yes, it seems local buffering can be good stuff as it seems high differentials can be more lossy.

  5. fj says:

    Maybe it is better to think like a tree?

  6. I don’t really understand what is meant by PV backing up PV. You still need storage for the times when the sun isn’t shining–it doesn’t matter how many panels you have at night! Can anyone else explain what this article is saying?

  7. Dr.A.Jagadeesh says:

    Good post. There are two ways of improving the economics of PV Power production,One is cost reduction of Solar Cells and another is increasing the efficiency of solar cell. In recent times we are hearing about the former but I am more concerned to see the latter.

    Dr.A.Jagadeesh Nellore(AP),India

  8. Leif says:

    The solar array that I have has been weather tested to a 60 year similuation by the government and has shown zero defect loss. There is no reason not to expect longevity to increase as well as efficiency.

  9. Timothy Hughbanks says:

    This article would be more helpful if it gave cost estimates for all the other components of various solar power systems. What fraction of solar power costs still reside in the cost of the panels? Are other installation costs now limiting? And how do the answers to these questions depend on the kind of system you’re talking about? (e.g., large commercial arrays vs. rooftop systems.)

    Stephen Lacey was better at putting these kinds of things in context – he still hasn’t been adequately replaced here at CP.

  10. Omega Centauri says:

    To some extent you can back up variable power by other variable power. It helps if you can store the excess and use it later. So he is advocating that overbuilding is a useful way to go, and to some degree that is correct.

    There was a study done about the German grid, which has a combination of wind and PV and hydro, claiming that with only modest overbuilding it could be 99% renewable -with the remainder made up of natural gas peaking plants. In any case, its possible to do better than naive intuition would imply.

  11. Omega Centauri says:

    Unfortunately the BOS (Balance Of System, costs are now dominating. The quoted GTM article, also makes the point that these are manufacturing costs -not sales price. The Germans are doing much better with BOS than the US. It is because of BOS costs, that I think utilityscale ground mounts are so important.

  12. Mark Shapiro says:

    Yes. Look at Alta Devices claim of 28% for thin GaAs.

  13. Mark Shapiro says:

    PV at less than $1/Watt opens three huge opportunities:

    1. Building integration, to lower the BOS costs.
    2. Relearning how to use and distribute the low voltage DC from PV. All electronics, and LED lighting uses low voltage DC. Can USB 3.0 become a widespread standard?
    3. PV is the only power plant that scales down perfectly to be accessible to the poorest billions. A PV cell, battery, and LED (plus cell phone charging!) is now cheaper than kerosene light, and far superior.

    This is astonishing!

  14. John Pettitt says:

    Low voltage distribution isn’t really a good plan. The trend seems to be towards much higher DC voltages from strings of panels so that the transmission losses from the panels to the inverters are minimized and the inverters can operate without large step up transformers.

    I ran 11kw of panels on my house for a net zero bill, I’m not convinced that over provisioning will help that much withe the cloudy day issue – a 90% loss when cloud cover hit was typical.

    PS pro tim for home owners – wash your panels regularly – you can lose 10-15% of output if they are dirty.

  15. fj says:


    We dont need no fossil fuels.

  16. fj says:

    And, poor people first is truly Capitalism At The Crossroads.

  17. KBVE says:

    The best part of the solar panels dropping in price is the fact that it will drastically increase the demand, which will help create new jobs, lower dependency on foreign oil and give investors more reasons to approach green projects. In addition, the solar panel business has not reach its climax, I can not wait until more manufactures start to produce effective solar panels (of course, research into how effective these panels would be is a whole nother ball park)

  18. Michelle E says:

    I don’t understand the obsession with PV generating all of your power. It is my understanding, that in the US we are mostly attached to the grid anyway, so it becomes a non issue. The systems have value with a grid connection. Mine will have paid for itself in about 8 years… and as it is 110 outside, my house is a frosty 73 degrees….I could probably have my ROI in even less time if I was more thrifty with the AC.

  19. Greg vP says:

    Timothy, google for “NREL Sunshot 2012”.

    It’s a report (PDF) by the US National Renewable Energy Laboratory that discusses these issues.

    IIRC, for residential-scale systems modules were about 22% of the installed cost, and for utility-scale systems, about 25% (despite the price per module to utilities being roughly half the price to homeowners).

    “Sunshot” is a bit less hyperbolic than this piece, but still positive. Recommended, if you’d like a few details.

  20. From Peru says:

    The word “revolution” come to my mind.

    The steam engine (late 1700s) was the first one. It led to an industrial development made from steel and coal. Capitalism was born.

    Electricity and oil (late 1800s) were the second one. Electricity first made posible to separate the places of power generation and the factories, eventually to power cities and all electric and electronic devices. Oil permitted to power personalized transport (cars), conquer the air (planes)and produce a petrochemical industry that made fertilizers (permitting to explode the agricultural production) and plastics.

    However all this progress was done at the expense of producing a equally big amount of waste, the worst of them, CO2. (along with air pollution, tons of scrap and plastic garbage, chemical liquid effluents, all all the kind of poisons you could imagine). We constructed progress at the expense of the suffering and death of millions of people due to pollution poisoning and many more by climate disruption.

    Now at the early 21st century, we could have something even more revolutionary: cheap energy produced not at power plants, but on everyone’s roof. A clean power that at the same time can re-distribute this precious commodity called energy to almost everyone.

    Now someone is talking about a “Shale oil revolution”?

    Nope,that is just a boring replay of the 1800-1900 industrial development. It was a revolution then but today is just a distraction from the true extraordinary event.

    Long live renewable energy, the Third Industrial Revolution!

  21. Zach says:

    We have done so in countless other articles on CleanTechnica. Given that our focus is cleantech, we write several times a day about solar power, so we don’t stick that context in every time. Sometimes we just focus on a segment of the story.

  22. Gingerbaker says:

    “I don’t understand the obsession with PV generating all of your power. It is my understanding, that in the US we are mostly attached to the grid anyway, so it becomes a non issue. The systems have value with a grid connection. ”

    I agree wholeheartedly. It matters not where the electricity is generated when we have a grid.

    So why not erect PV where the sun shines intensely every day – the American desert Southwest?

    And why not erect as cheaply as possible? Which means very large installations, to make use of the huge economy of scale.

    The dogma that solar needs to be decentralized, erected on rooftops, is a fetish. A fetish that will leave us insisting on an approach that has not had much success, an approach whose price tag is not borne equally, an approach which is not conducive to national strategic planning, and an approach that is much, much more expensive than large-scale installations with perfect siting.

  23. Spec says:

    I’m not sure if I believe that . . . but even if it does happen, it doesn’t mean all that much. The PV panel is already now a small part of a PV installation cost. The inverter and (mostly) the design/permits/installation are the big costs.

  24. Spec says:

    The nice thing about rooftop solar is that home-owners can do it themselves and they are replacing energy purchased at (higher) retail prices rather than wholesale prices. It also eliminates the need for transmission lines because the energy is largely consumed right where it is produced.

    Large installations in the desert will require large transmission lines which are expensive to obtain permits for. But there are advantages and disadvantages to both rooftop and large-scale solar. Do both of them.

  25. Michael Crumpton says:

    “Each 1,000 watt panel would cost $360 without factoring in installation costs, but they would last about 6 times longer than batteries.”

    This article makes very little sense to me. The reason to have batteries is to have power at night, which no increased amount of solar panels is going to give you. Also to discard the importance of installation costs is nuts, since installation is a major cost of a solar installation at $.36/watt.