Building Operating Management

Solar Panel Efficiency Going Up as Costs are Falling

By Greg Zimmerman, Executive Editor   Energy Efficiency

OTHER PARTS OF THIS ARTICLEPt. 1: This PagePt. 2: PPAs and Other Ways to Pay for PV Systems

Right now, despite the ongoing renaissance of all things sustainable, the power produced from photovoltaic (PV) panels makes up less than 1 percent of all the power produced in the U.S. By most accounts, the two biggest hurdles to wider scale adoption of solar electricity are the perception that PV panels are way too expensive to justify on a payback basis and the notion that outside of super-sunny areas like Florida and Arizona, not enough solar electricity would be produced to make PVs worthwhile at all, even if cost wasn't a factor.

To start with the second: Analysis by the National Renewable Energy Laboratory shows that even in Alaska, the average annual irradiation (the amount of the sun's energy hitting the panels) is about 1,100 kWh/m2 of panel per year. To calculate the energy produced, multiply by the efficiency of the PV panels — say, conservatively, 11 percent. So, even in arctic Alaska, a square meter of PV panel can produce 110 kwh per year. By way of comparison, in parts of Arizona, the average irradiation can be as high as 2,500 kWh/m2 per year.

That Alaskan total is actually more than the average amount of power produced by PV panels in most parts of Germany, a country with the highest PV adoption rate in the world. So those numbers should dispel the myth that electricity produced by PVs in northern climates can't be significant, says Gary Gerber, president and CEO of Sun Light & Power, a PV design and installation firm. "Remember, no matter where you are, solar is paying for itself every day," he says.

But at what cost, skeptics still ask. Yes, on a kilowatt-hour basis, solar power is still more expensive than fossil fuel power. And yes, PVs can still have a payback in excess of 10 years, making the justification argument difficult. But as manufacturing technology is improving and panels are being produced more cheaply, and as the panels themselves are becoming more efficient, both expense and payback numbers are coming down. According to the 2009 Solar Industry Year in Review report from the Solar Energies Industry Association, the price per watt of PV modules dropped 40 percent — from $3.50 to $4.00 a watt in mid-2008 down to $1.85 to $2.25 per watt in 2009. And average installed cost of a PV system fell 10 percent from 2008 to 2009.

What's more, as states are ramping up their renewable portfolio standards, they're also increasing tax incentives for PV installations. And utilities are chiming in with rebate programs as well.

For a frequently updated list of state incentive and utility rebate programs, visit

For more information on property assessed clean energy (PACE) programs, including a list of states with PACE-enabling legislation, visit

Continue Reading: Photovoltaics

Solar Panel Efficiency Going Up as Costs are Falling

PPAs and Other Ways to Pay for PV Systems

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  posted on 9/28/2010   Article Use Policy