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Washington, D.C., June 18, 2008 -- A new study makes the case that solar power is emerging as a cost-effective hedge against fossil fuels and is likely to reach cost parity with retail-electricity rates in most regions of the U.S. in less than a decade.
The Utility Solar Assessment (USA) Study, produced by Clean Edge and Co-op America, provides a roadmap for utilities, solar companies, and regulators to reach 10 percent solar in the U.S. by 2025.
The study finds that significantly scaling solar power in the U.S. will require the active involvement of utilities. The study delivers a to-do list for the three key stakeholders in the nation's solar industry. Among others, the recommendations include:
* For utilities: Take advantage of solar for peak generation and alleviating grid congestion; implement solar as part of the build-out of the smart grid; and adapt to new market realities with new business models.
* For solar companies: Bring installed solar systems costs to $3 per peak watt or less by 2018; streamline installations; and make solar a plug-and-play technology.
* For regulators and policy makers: Pass a long-term extension of investment and production tax credits for solar and other renewables; establish open standards for solar interconnection; and give utilities the ability to "rate-base" solar.
The study also reports that:
* For the first time solar power is beginning to reach cost parity with conventional energy sources. As solar prices decline and the capital and fuel costs for coal, natural gas, and nuclear plants rise, the U.S. will reach a crossover point by around 2015.
* Installed solar PV prices are projected to decline from an average $5.50-$7.00 peak watt (15-32 cents kWh) today to $3.02-$3.82 peak watt (8-18 cents kWh) in 2015 to $1.43-$1.82 peak watt (4-8 cents kWh) by 2025.
* The investment to arrive at 10 percent solar in the U.S. is not small, reaching $450 billion to $560 billion between now and 2025, an average of $26 billion to $33 billion per year. However, the study said, given utilities' existing capital costs, such an investment is not prohibitive.
The study, written by Pernick and Clean Edge contributing editor Clint Wilder, is based on interviews with more than 30 solar, utility, financial, and policy experts and uses proprietary Clean Edge data on solar PV market size, cost and pricing history and projections, and other key market factors.
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