Rooftop solar’s 2030 price could be $0.05/kWh and drive 30 GW/year of new capacity, DOE finds
Uility-scale wind and solar generation is now putting coal and nuclear plants out of business and is price-competitive with natural gas plants — but what would happen if rooftop solar was that cheap?
The retail residential electricity price varies regionally, but the national average in November 2017 was $0.13/kWh. There are ways to bring the cost of rooftop photovoltaic (PV) solar to $0.05/kWh by 2030, according to a new Department of Energy (DOE) paper. That value proposition could be appealing enough to change the already falling demand for grid-supplied electricity noticeably.
Getting to that low cost would require major business model innovation by solar installers. It would also require significantly more use of “integrated” solar roofing products still being developed. But if the solar industry makes those changes, it will offer electricity customers big new opportunities to which utilities may be forced to respond.
Rooftop solar is already growing fast and these projected low prices can only accelerate adoption. High penetrations can create challenges for utilities because of midday over-generation and an accentuated evening demand peak. But policies that encourage the use of battery storage and smart technologies can turn those challenges into opportunities.
The rise of solar
The levelized cost of energy (LCOE) for residential PV declined from $0.52/kWh to $0.15/kWh from 2010 to 2017, according to “Cost-Reduction Roadmap for Residential Solar Photovoltaics (PV), 2017–2030” from the DOE’s National Renewable Energy Laboratory (NREL).
Effective partnerships between solar installers and roofers, now only beginning to emerge, could, at scale, bring the 2030 LCOE for PV on new roofs to $0.055/kWh. Similarly efficient and scaled up hypothetical partnerships between new home builders and installers could bring the 2030 new home LCOE for PV to $0.05/kWh.
NREL Solar Analyst and paper lead author Kristen Ardani said this thought exercise was to explore how solar’s 2030 LCOE could get to the target $0.05/kWh recently set by the DOE Solar Energy Technologies Office. The potential is there, but it would require significant changes in the solar installation, home building and roofing industries, she told Utility Dive.
“Between 2017 and 2030, an average of 3.3 million homes/year will be built or require roof replacement,” NREL estimated. Capturing even a small part of that technical potential of approximately 30 GW per year of rooftop PV “could have a significant impact on the evolution of the U.S. electricity system.”
Vikram Aggarwal is CEO for EnergySage, which offers a version of its solar market data and online marketplace to utilities. They are beginning to realize that “solar is disruptive, customers are looking to utilities for guidance with solar, and other companies are going after their customers,” he told Utility Dive.
The numbers in the NREL paper will only accelerate the utilities’ reaction, he said. “It could be a classic case of ‘if you can’t beat them, join them.’”
Get electric utility news like this in your inbox daily. Subscribe to Utili