- Working Paper
Solar electricity generation is one of very few low-carbon energy technologies with the potential to grow to very large scale. As a consequence, massive expansion of global solar generating capacity to multi-terawatt scale is very likely an essential component of a workable strategy to mitigate climate change risk. Recent years have seen rapid growth in installed solar generating capacity, great improvements in technology, price, and performance, and the development of creative business models that have spurred investment in residential solar systems. Nonetheless, further advances are needed to enable a dramatic increase in the solar contribution at socially acceptable costs. Achieving this role for solar energy will ultimately require that solar technologies become cost-competitive with fossil generation, appropriately penalized for carbon dioxide (CO2) emissions, with — most likely — substantially reduced subsidies.
This study examines the current state of U.S. solar electricity generation, the several technological approaches that have been and could be followed to convert sunlight to electricity, and the market and policy environments the solar industry has faced. Our objective is to assess solar energy’s current and potential competitive position and to identify changes in U.S. government policies that could more efficiently and effectively support the industry’s robust, long-term growth.
We focus in particular on three preeminent challenges for solar generation: reducing the cost of installed solar capacity, ensuring the availability of technologies that can support expansion to very large scale at low cost, and easing the integration of solar generation into existing electric systems. Progress on these fronts will contribute to greenhouse-gas reduction efforts, not only in the United States but also in other nations with developed electric systems. It will also help bring light and power to the more than one billion people worldwide who now live without access to electricity.