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Here Comes the Sun

A report on Solar Power states that the cost of solar panels (photovoltaic) had come down to $4 per watt by 2005. So, a $4000 panel will produce a kilowatt of power. I’ve read that, while it varies by region, 1600 hours of good sun is an average annual number to use. In my area (outside of Boston), electricity cost is about 17 cents per kilowatt-hour. This is a value of $272 of electricity for our $4000 panel or 6.8%/yr. No need to do too much further analysis here, it would seem obvious that with the cost of electricity going up with inflation, and the cost of Solar Panels coming down in cost per unit of power, we will soon approach the tipping point where the return on one’s investment is “an offer you can’t refuse.” What is the return required for this to happen? 10%? 15%? I do not know. But with the production cost coming down at a fast pace, that point is likely no longer than 5-10 years. We will then see a cycle where this new demand helps to bring down production costs down even further as economies of scale kick in. All this thinking about low cost electricity gives me one thought: “I want my electric car.”

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