Could The Cost Of Solar Power Fall By 75% By 2020?

Writing in The Telegraph last week, Ambrose Evans-Pritchard cited theU.S. Department of Energy as the basis for a prediction that the cost of solar power would drop by 75% between 2010 and 2020.

Evans-Pritchard writes:

The US Energy USEG +2.12% Department expects the cost of solar power to fall by 75% between 2010 and 2020. By then average costs will have dropped to the $1 per watt for big solar farms, $1.25 for offices and $1.50 for homes, achieving the Holy Grail of grid parity with new coal and gas plants without further need for subsidies.

Evans-Pritchard mentions several development projects sponsored by the U.S. Department of Defense as representative of the broader research effort that will drive costs down costs and drive efficiencies up.

Over the past few years, the cost of solar power systems has plunged as the result of what some folks have characterized as Chinese “dumping.”

For better or worse, I am among those “folks” who suspect that anti-competitive trade practices have fueled overly optimistic forecasts of future costs reductions.

Excluding these trade-induced (and temporary) cost reductions, is it possible that solar costs could reduce costs 75% by 2020?

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