WASHINGTON and PORTLAND, Ore. - Solar energy currently provides less than 0.1 percent of the electricity generated in the United States, but a new report says that solar power’s contribution could grow to 10 percent of the nation’s power needs by 2025.

The report, prepared by Clean Edge and the nonprofit Co-op America, projects nearly 2 percent of the nation’s electricity coming from concentrating solar power systems, with solar photovoltaic systems providing more than 8 percent of the nation’s electricity. Those figures correlate to nearly 50,000 megawatts of solar photovoltaic systems and more than 6,600 megawatts of concentrating solar power.

As noted in the report, solar power has been expanding rapidly in the past eight years, growing at an average pace of 40 percent per year. The cost per kilowatt-hour of solar photovoltaic systems has also been dropping, while electricity generated from fossil fuels is becoming more expensive. As a result, the report projects that solar power will reach cost parity with conventional power sources in many U.S. markets by 2015. But to reach the 10 percent goal, solar photovoltaic companies will also need to streamline installations and make solar power a “plug-and-play” technology, i.e., it must be simple and straightforward to buy the components of the system, connect them together, and connect the system to the power grid.

The report also places some of the responsibility with electric utilities, which will need to take advantage of the benefits of solar power, incorporate it into future smart grid technologies, and create new business models for building solar power capacity. The report also calls for establishing long-term extensions of today’s investment and production tax credits, creating open standards for connecting solar power systems to the grid, and giving utilities the ability to include solar power in their rate base.

Publication date: 07/14/2008