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Dow Chemical, DOE aim for Solar at $2 a watt

Dow Chemical, maker of the Solar Shingle, has been awarded a $12.8 million, 3-year grant from the Department of Energy to fund building integrated solar products program. The aim of the funding is clear in the name of the DOE program “Extreme Balance-of-System Hardware Cost Reductions.” [note: Maybe not quite clear enough - I added the hyphens to help you figure out what Extreme is supposed to refer to.]

Dow's Solar Shingles. Credit: Dow Chemical

In short, DOE wants to bring down the installed cost of solar power to $2 per watt – without subsidies. Currently, it’s the upfront cost of installing solar panels that puts the breaks on the amount of installed solar in the U.S. Most solar systems are designed to last upwards of 20 years (most experts say you can count on your panels to work for 25 years), but the costs can mean the payback period can stretch out to more than 15 years, depending on where you live.  

Sharp offers an awesome and slightly addicting solar cost/payback/savings calculator on its website. Drop whatever you are doing right now (it’s the Friday before Labor Day, people, no one expects you to do real work anyway) and go here: http://sharpusa.cleanpowerestimator.com/sharpusa.htm

All you need to do is put in your zip code and the amount of your electricity bill and then you can spend a while fiddling with the variables. The default cost per watt of solar power is $7 per watt (or $7,000 per kW as shown in the calculator).

With my particulars, a 3,000 kW system would trim my power bill enough to pay for itself in a bit over 16 years. I’d only pay about 1/3rd the full cost of the system (or over $7,000) due to state and Federal tax rebates. So that shows two things: government subsidies are required to make solar even sort of make sense at current prices, and that $2 per watt sounds like a reasonable price target. If you lived in Arizona your calculation would likely be different.

Give it a try!

7 Comments

  • Sep 2nd 201112:09
    by John Spevacek

    $2 a Watt? What a deal. Considering I currently pay about 7 cents for a full Kilowatt, I don’t think I’ll invest anytime soon. (Me thinks you have a few typos.)

  • Sep 2nd 201115:09
    by Melody Bomgardner

    While it is true that 7 cents a kilawatt is pretty darned cheap, eventually the installed solar capacity would pay for itself, though the time horizon may be impractically long in places where people pay little for electricity. It’s just the difference between renting and owning. Pay only once or pay forever.

  • Sep 2nd 201119:09
    by Chad

    John, you seem to be confusing watts with watt/hours. You can’t compare things with different units like that. Which is greater? Two kilograms or a meter?

    Also, your $0.07/kwh is way below the norm and heavily subsidized (mostly by free-public-garbage-dump policies). The average electricity price in the US is over $0.11/kwh, and with externalities included are over $0.20/kwh with our current electricity source mix. Solar is already below the cost point at industrial scale. For example, the recent round of feed-in-tariff related bidding in China easily sold out with a purchase price between $0.17-0.18, implying investors could make a good ROI at this price level.

  • Sep 3rd 201104:09
    by Chad

    I just ran some quick calculations. Even if John really does have mid-day electricity available to him at 7 cents a kwh, and that price only increases along with inflation, a $2/W solar panel has an ROI of 6% if the life time is 20 years and 7.5% if the lifetime is 25 years, with a high level of predictability. There aren’t many better investments that could provide these returns and certainty. A $2/W installed system would be a game changer.

  • Jan 13th 201219:01
    by SolarUniverseCal

    Solar power is really the only way to go. We all need to do our part to spread the word. It’s just about getting the word out that solar and going green takes “just about the same effort”.

  • Feb 13th 201320:02
    by Santo Lezak

    I agree, but people need to appreciate that adding Solar in their property is an asset which could increase the longer term valuation of their home if / when they make a choice to sell. With the environment the way it is going we cannot underestimate any item that gives totally free energy at no cost to both the consumer and more significantly the environment!

  • Mar 7th 201401:03
    by Brisbane Solar

    I have to agree with the comments above, people need to wake up to the idea that solar energy is going to become the norm as fossil fuels continue to dwindle.
    Installing a solar system is just common sense these days.

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