Smaller, Faster, Cheaper: Solar Power's "Moore's Law"

Ramez Naam's picture

The sun strikes every square meter of our planet with more than 1,360 watts of power. Half of that energy is absorbed by the atmosphere or reflected back into space. 700 watts of power, on average, reaches Earth’s surface. Summed across the half of the Earth that the sun is shining on, that is 89 petawatts of power. By comparison, all of human civilization uses around 15 terrawatts of power, or one six-thousandth as much. In 14 and a half seconds, the sun provides as much energy to Earth as humanity uses in a day.

The numbers are staggering and surprising.  In 88 minutes, the sun provides 470 exajoules of energy, as much energy as humanity consumes in a year.  In 112 hours – less than five days – it provides 36 zettajoules of energy – as much energy as is contained in all proven reserves of oil, coal, and natural gas on this planet.

If humanity could capture one tenth of one percent of the solar energy striking the earth –  one part in one thousand –  we would have access to six times as much energy as we consume in all forms today, with almost no greenhouse gas emissions.  At the current rate of energy consumption increase – about 1 percent per year – we will not be using that much energy for another 180 years.

It’s small wonder, then, that scientists and entrepreneurs alike are investing in solar energy technologies to capture some of the abundant power around us.  Yet solar power is still a miniscule fraction of all power generation capacity on the planet.  There is at most 30 gigawatts of solar generating capacity deployed today, or about 0.2 percent of all energy production.  Up until now, while solar energy has been abundant, the systems to capture it have been expensive and inefficient.

That is changing.  Over the last 30 years, researchers have watched as the price of capturing solar energy has dropped exponentially.  There’s now frequent talk of a "Moore’s law" in solar energy.  In computing, Moore’s law dictates that the number of components that can be placed on a chip doubles every 18 months.  More practically speaking, the amount of computing power you can buy for a dollar has roughly doubled every 18 months, for decades.  That’s the reason that the phone in your pocket has thousands of times as much memory and ten times as much processing power as a famed Cray 1 supercomputer, while weighing ounces compared to the Cray’s 10,000 lb bulk, fitting in your pocket rather than a large room, and costing tens or hundreds of dollars rather than tens of millions.

If similar dynamics worked in solar power technology, then we would eventually have the solar equivalent of an iPhone – incredibly cheap, mass distributed energy technology that was many times more effective than the giant and centralized technologies it was born from.

So is there such a phenomenon?  The National Renewable Energy Laboratory of the U.S. Department of Energy has watched solar photovoltaic price trends since 1980.  They’ve seen the price per Watt of solar modules (not counting installation) drop from $22 dollars in 1980 down to under $3 today.


Is this really an exponential curve?  And is it continuing to drop at the same rate, or is it leveling off in recent years?  To know if a process is exponential, we plot it on a log scale.


And indeed, it follows a nearly straight line on a log scale.  Some years the price changes more than others.  Averaged over 30 years, the trend is for an annual 7 percent reduction in the dollars per watt of solar photovoltaic cells.  While in the earlier part of this decade prices flattened for a few years, the sharp decline in 2009 made up for that and put the price reduction back on track.  Data from 2010 (not included above) shows at least a 30 percent further price reduction, putting solar prices ahead of this trend.

If we look at this another way, in terms of the amount of power we can get for $100, we see a continual rise on a log scale.


What’s driving these changes?  There are two factors.  First, solar cell manufacturers are learning – much as computer chip manufacturers keep learning – how to reduce the cost to fabricate solar.

Second, the efficiency of solar cells – the fraction of the sun’s energy that strikes them that they capture – is continually improving.  In the lab, researchers have achieved solar efficiencies of as high as 41 percent, an unheard of efficiency 30 years ago.  Inexpensive thin-film methods have achieved laboratory efficiencies as high as 20 percent, still twice as high as most of the solar systems in deployment today.


What do these trends mean for the future?  If the 7 percent decline in costs continues (and 2010 and 2011 both look likely to beat that number), then in 20 years the cost per watt of PV cells will be just over 50 cents.


Indications are that the projections above are actually too conservative.  First Solar corporation has announced internal production costs (though not consumer prices) of 75 cents per watt, and expects to hit 50 cents per watt in production cost in 2016.  If they hit their estimates, they’ll be beating the trend above by a considerable margin.

What does the continual reduction in solar price per watt mean for electricity prices and carbon emissions?  Historically, the cost of PV modules (what we’ve been using above) is about half the total installed cost of systems. The rest of the cost is installation.  Fortunately, installation costs have also dropped at a similar pace to module costs.  If we look at the price of electricity from solar systems in the U.S. and scale it for reductions in module cost, we get this:


The cost of solar, in the average location in the U.S., will cross the current average retail electricity price of 12 cents per kilowatt hour in around 2020, or 9 years from now.  In fact, given that retail electricity prices are currently rising by a few percent per year, prices will probably cross earlier, around 2018 for the country as a whole, and as early as 2015 for the sunniest parts of America.

10 years later, in 2030, solar electricity is likely to cost half what coal electricity does today.  Solar capacity is being built out at an exponential pace already.  When the prices become so much more favorable than those of alternate energy sources, that pace will only accelerate.

We should always be careful of extrapolating trends out, of course.  Natural processes have limits.  Phenomena that look exponential eventually level off or become linear at a certain point.  Yet physicists and engineers in the solar world are optimistic about their roadmaps for the coming decade.  The cheapest solar modules, not yet on the market, have manufacturing costs under $1 per watt, making them contenders – when they reach the market – for breaking the 12 cents per Kwh mark.

The exponential trend in solar watts per dollar has been going on for at least 31 years now.  If it continues for another 8-10, which looks extremely likely, we’ll have a power source which is as cheap as coal for electricity, with virtually no carbon emissions.  If it continues for 20 years, which is also well within the realm of scientific and technical possibility, then we’ll have a green power source which is half the price of coal for electricity.

That’s good news for the world.

Sources and Further Reading:

Key World Energy Statistics 2010, International Energy Agency

Tracking the Sun III: The Installed Cost of Photovoltaics in the U.S. from 1998-2009, Barbose, G., N. Darghouth, R. Wiser.,  LBNL-4121E, December 2010

2008 Solar Technologies Market Report: January 2010, (2010). 131 pp. NREL Report TP-6A2-46025; DOE/GO-102010-2867

About the Author: Ramez Naam is a computer scientist and entrepreneur. He is the author of More Than Human (Broadway Books, 2005), which the LA Times called "a terrific survey of current work and future possibilities in gene therapy, neurotechnology, and other fields." For More Than Human, Naam was awarded the 2005 H. G. Wells Award for Contributions to Transhumanism.

Naam is a Fellow of the Institute for Ethics and Emerging Technologies and blogs at Unbridled Speculation. He lives in Seattle, where he is currently working on his next book The Infinite Resource: Human Innovation and Overcoming the Challenges of a Finite Planet. You can see Naam speak at a special event at the World Future Society 2011 conference in Vancouver, B.C.

This post originally appeared at Scientific American.  Reprinting here with permission.