[Answer content currently under review - 11/25/2011]

The so-called “cost-barrier” to PVs is overstated. Costs are not a barrier to large systems, remote systems, systems where competing costs are high (e.g. Japan), or when environmental costs are given any consideration at all.

• Many in the solar community would (if predictably) say “What cost hurdle?”  And they have a point.  Japan has removed all incentives as of Jan. 06 and the orders are still very strong.  Of course, electricity prices are not subsidized as they are here, so they tend to be higher.

• Solar is now cheaper than conventional electricity in most of the rest of the world.   Electricity like oil is subsidized in the US . Japan ’s retail electric rate is $0.25 / kWh (about 3 times Arizona ’s average rate)

• Many recent studies have pegged the per kWh cost at below $0.10/kWh.  The recent spot market cost for PVNGS is over $0.10/kWh.  It is widely known that the estimated cost per kWh is thought to be 6-8 cents per kWh for large-scale systems in the 100 MW range.

• Tucson Electric Power generates currently at 9.9 cents/kWh, albeit their system is adjacent to their existing coal-burning Springerville power plant, obviating the need for the usual infrastructural costs (transmission, land, etc.).  Their site might be a ideal site for additional large-scale centralized installations.

• Many of my solar friends would (albeit predictably) say “What cost hurdle?”  And they have a point.  Japan has removed all incentives as of Jan. 06 and the orders are still very strong.  Of course, electricity prices are not subsidized as they are here, so they tend to be higher.  A 30% Fed tax credit will, as I mentioned yesterday, make PV competitive in 2006 in the US .

• Stirling Energy Systems (SES) of Phoenix , which uses a dish-like concentrator  arrangement, recently signed a power purchase agreement with So California Edison and San Diego Gas and Electric.

• “The new federal energy bill also includes an important component for the current discussion. Beginning in 2006, residential solar systems are eligible for a 30% tax credit to a maximum of a $2,000 credit.[“Residential Solar and Fuel Cell Tax Credit,” Database for State Incentives for Renewable Energy, http://www.dsireusa.org/library/includes/incentive2.cfm?Incentive_Code=US37F&State=Federal&currentpageid=1, accessed September 30, 2005 . This web site is an amazing collection of state and federal policies concerning renewable energy. The database is updated almost daily. ] The tax credit is allowable on the installation price less the state tax credit. So in this case, the allowable credit is $1,800 based on the $6,000 net after the state tax credit ($7,000 – 1,000 = $6,000 X .30 = $1,800).” Out of pocket expense is $700 for a one kW system (most people around here have been installing 2-3 kW)  (n.b. This paragraph and the table below come from: Dean Howard Smith and Gary Tallman’s new study Investing in Your Future: With Current Arizona Policy, a Solar Panel is a Good Investment.  Northern Arizona University.)

Table 1: Net cost of a 1kW system

• It should also be said that the use of PV is an economic choice right now for off-grid and remote locations, including many Indian reservations.   If one were to give any value at all to the environmental benefits of using solar, there would be no question that it was economic. The economic argument may well be the most compelling, as solar emits no greenhouse gases after manufacture and a infinitesimal amount when compared to coal.