Cost of Solar Is 2–100 Times Cheaper Than You Think

What’s the cost of solar today? Well, it depends a great deal on where exactly you are located, but no matter where you’re located, I’d bet that most of you have a cost of solar in your head that’s 2–100 times greater than the actual cost of solar power. Read on for an explanation….

One of the things I majored in for my bachelor’s degree (a long time back) was sociology. I think one of the key lessons I learned in those four years was that we are not exactly rational beings (okay, I guess I had a sense of that beforehand). Societal theories and economic models based on the idea of humans making completely rational decisions simply don’t work. There are a lot of different reasons for this, but one huge one is that we often don’t have all the information we would need in order to make a rational decision.

In a related manner, something I’ve learned in my several years reading and writing about clean energy is that the average person has a price of solar power or price of wind power in their heads that is at least a few years old, sometimes even many years old.

No criticism from me — I know how busy modern life is! It’s often hard to make time even for the essentials. If you’re not working and living in the clean energy arena, you probably don’t feel like you have time to practice your clean energy free throws (i.e. keep up with the price of different energy technologies).

But energy is a huge deal. It’s most likely a big portion of your monthly expenditures. And it has a transformational effect on the world we live in. But we won’t get into all that today — let’s get into the fun stuff! I’m going to catch you up on some tremendously awesome news about solar power.

First, however, to make one of my points, I need to give you a short briefing on some wind power facts. (I know, this is getting complicated — just stick with me.) On average, a Bloomberg New Energy Finance study has found that people think wind power is about twice as expensive as it actually is.

Unfortunately, I’m not aware of a similar study on solar power. But I think this is still very useful for solar power for a few reasons. To get to those, we have to ask, “Why do people think wind power is so much more expensive than it is?”

From my experience covering this topic for years, I have a few ideas:

  1. Wind turbine prices have fallen 29% since 2008, and about 50% since 1990. Very possibly, people simply have an outdated price of wind power in their heads. It’s quite logical — if they heard the price of wind power 10 years ago but haven’t kept up with changes in the industry, they simply have that one price in their heads.
  2. There’s a lot of bashing of renewable energy by certain politicians and media agencies. In particular, one of the most repeated claim is that “renewable energy is too expensive.” For those tied to the coal, natural gas, and nuclear industries, this falsehood is key to their own financial success, because everyone knows that wind and solar power are popular with the masses, and almost everyone knows they’re clean and good. The only hope for these dirtier industries is to try to convince people that clean energy is more expensive… even when it’s not.

However, the even bigger news is that the two points above apply to solar power even much more than wind power!

Solar power prices have fallen off a cliff in recent years. Check out these graphs:

price of solar power drop graph Cost of Solar Is 2  100 Times Cheaper Than You Think

Image Credit: Unknown. Data Credit: Bloomberg New Energy Finance (BNEF)

Yep, if you have a 1977 price of solar panels stuck in your head, you think solar panels are 100 times more expensive than they actually are. If you have a year 2000 price of solar panels stuck in your head, you think they’re about twice as expensive as they actually are. Even if you have a 2008 price of solar panels stuck in your head, that’s about 80% too high. And, actually, even if you have an early 2012 price of solar panels in your head, that’s about 20% too high!

Did you get a solar quote back in 2008? If so, it’s probably quite a bit higher than it would be today. Maybe it’s time to check again?

But while we’re at it, let’s not forget the political and media coverage. Either through simple lack of awareness, or something more nefarious, many politicians and members of the media repeatedly assert that solar power is “so expensive.” They’ve got outdated information in their heads. Don’t listen to them. Check the numbers for yourself. And, very importantly, share this information with your friends and family so that they are not tricked by outdated information and misinformed media professionals and politicians.

I think the points above are quite interesting and informative. But there’s a lot more to say about the cost of solar. Stay tuned to our site (Cost of Solar), as we’ll be delving into that much more in the days and weeks to come.

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