Solar electricity costs trending far from bottom

After falling from more than $9 per watt in 2007 to less than $5 in 2013, prices of solar electricity systems fell another 12 percent in 2014. And they’ll fall farther faster as manufacturers increase economies of scale, less-painful financing options spread through the consumer market, and “yieldcos” – huge, centralized solar-energy farms – draw billions of dollars into downstream technologies.

Canadian Solar, among the world’s three largest makers of photovoltaic panels, sees a price drop of 25 percent before 2019. In May, the Saudi Arabian power company ACWE predicted that prices could fall as much as 40 percent by 2018, forecasting that half of new power generation in North Africa and the Middle East over the next 10 years will be solar.

These predictions align with Deutsche Bank’s analysis that solar-generated electricity could cost the same as grid-generated power in 80 percent of the world within two years.

TRENDPOST: Returns on solar-energy investments will run laps around those from the petroleum industry. This – as much, if not more, than moral suasion – will accelerate the divestment movement among institutional and private investors from oil and gas.