The road ahead for solar PV power

Abstract

Over the past decade, solar photovoltaic (PV) power has experienced dramatic deployment growth coupled with substantial decreases in system prices. This article examines how solar PV power is currently positioned in the electricity marketplace and how that position is likely to evolve in the foreseeable future. We first assess the current cost competitiveness of solar PV in select U.S. locations and industry segments using the levelized cost of electricity (LCOE) metric. This framework enables us to quantify the effects that supportive public policies, time-of-use pricing, and anticipated future technological improvements have on the cost of solar PV. We also build on recent analytical work that has identified circumstances under which it becomes financially attractive to add behind-the-meter batteries to an existing PV solar system. Taken together, our findings suggest that solar power, by itself and in conjunction with low cost storage, is positioned to account for a significant and growing share of the overall energy mix.