Solar power is becoming a viable, price competitive clean energy source for many applications. And although we will continue to need large power plants fired by coal, natural gas or nuclear energy for many more years, significant amounts of electricity are starting to be generated using solar power. And much more will be produced in the coming years.
McKinsey has a good produced a overview of the two major solar technologies- photovoltaic and concentrated solar thermal - including their solar energy cost estimates out to 2020. McKinsey is forecasting a 53% decline in solar generation costs over this period.
This is the power (pun somewhat intended) of technology and manufacturing at work. Because solar panels and solar thermal units are manufactured, they benefit from learning curve and scale effects. In other words, their costs tend to drop over time and with increased use.
Extracted energy sources, like coal and oil, benefit from learning curve effects. But these benefits tend to be outweighed by higher marginal costs of supply. For example, a giant oil field was recently discovered off the coast of Brazil. But it is going to be very expensive to get that oil to market because of the deep water drilling required.
The result is electricity generated using extractive energy sources tend to rise over time and with increased use.
McKinsey includes a price forecast that has the cost of solar power dropping to the 4-6 cent range per KWH by 2020. DOE's Energy Information Administration's 2020 forecast for the U.S. average electricity price is around 9 cents per KWH. The cross over price point based on these forecasts is around 2012.
This is before adding additional costs for greenhouse gas abatement to the extractive energy source costs.
Put simply, solar wins.
And as a distributed, decentralized power source - so will the growing number of small businesses that design, build, install, monitor and maintain residential, commercial and industrial solar power sites.