Solar 'competitive with coal' by 2010

London, 5 April: The cost of the cheapest solar power could be on par with that of electricity from coal plants by 2010, according to Photon Consulting.

The Boston, Massachusetts-based firm predicts that solar electricity will cost $0.18/kWh in Germany, $0.13 in California and $0.12/kWh in Spain by 2010 – while industry leaders will be able to bring that latter price down to $0.10/kWh, equivalent to the retail cost of electricity from a new coal-fired power plant.

"These economics could quickly result in a very large market opportunity for solar energy," the company said, estimating that, by 2010, solar electricity will cost less than the retail electricity price for 50% of residential customer in OECD countries.

However, the study – The True Cost of Solar Power – suggests that the makers of solar photovoltaic systems are not likely to pass the full cost reductions through to customers, offering "an excellent opportunity to expand their earnings in the coming years".

"Prices for solar electricity [systems] in 2004 have become disconnected from costs. Because the demand is much greater than the supply, a reduction in cost will not automatically trickle down to the consumer," said Michael Rogol, one of the study's authors.

"This scenario will likely continue for several years, with solar prices remaining strong due to very large demand," he added.

The summary findings of the report can be found be clicking here