The solar photovoltaics (PV) industry has seen remarkable cost reductions over the past 35 years. Silicon module production costs have been cut in half with every tenfold increase in cumulative production. These dramatic cost reductions have been driven by a combination of economies of scale, technological and manufacturing advances, and more efficient use of manufacturing inputs. PV module prices have declined so much that today non-module costs are the majority of total installed cost for utility-scale PV projects. These “balance of system” costs are also primed for major reduction through smarter and smaller power electronics, streamlined installation technologies and processes, and project development approaches that leverage low-risk capital and better customer education.
Though not at the same pace as solar, windpower has a similar trend of falling costs. Windpower cost reductions have been and continue to be driven largely by technology improvements that allow turbines to capture energy from higher hub heights and larger swept areas, and to do so more efficiently. In 1999--2009, the average rotor diameter and hub height of new U.S. wind turbines increased by 69% and 39%, respectively. Growing industry knowledge of operations and siting practices also boosted average wind capacity factors. Technological developments are continuing rapidly, with a plethora of innovative new companies designing wind systems and components that cut blade stress, raise capacity and energy capture, and cut windpower cost. The declining cost of windpower (especially considering its relatively short commercial lifetime) is expected to continue in coming years. A recent price bulge, as soaring demand stressed the supply chain, has already disappeared.
Bony, Lionel, Newman, Sam, and Doig, Stephen. 2010. Achieving Low-Cost Solar PV: Industry Workshop Recommendations for Near-Term Balance of System Cost Reductions. RMI. link
Kota, Sridhar. 2011. personal communication with author. January 31.
Terra Magnetica. 2010. “Siemens Launches Permanent Magnet-Based Gearless Wind Turbine”. April 25. link
Wiser, Ryan, and Mark Bolinger. 2011. 2010 Wind Technologies Market Report. Lawrence Berkeley National Laboratory, June. link