RamezNaam

UBS has done some modeling on this for their clients. They believe utility-based solar will take a hit for a 2-3 years and then rebound. The Fed ITC will drop from 30% to 10%. Making up that 20% cost change will take a little over one doubling of solar scale.

Rooftop solar will probably also take 2-3 years to make up for the cost lost to the subsidy reduction. It may even be 4. So after 2016, I'd expect rooftop prices to rise before slowly dropping, and getting back to 2016 levels around 2019 or 2020.

The graph doesn't have an 2015 data on it, but the average in 2015 has dropped further.

I initially set out to model soft costs on their own, separate from module costs. However, that effort revealed other factors. Solar capacity factor is rising and operational costs (which are not included in soft costs are dropping. There are more variables at play. For some of those variables, there isn't robust data available over lon times.

All of those variables ultimately feed into electricity prices, in the end, which is why I chose that modeling approach.

It's difficult to say. Solar thermal is not dropping in cost the way that solar PV is. For now, at low penetrations, solar PV is a far better bet.

But solar thermal has the advantage of integrated storage. When solar overall is at some reasonably high penetration (say, 10-15%) storage will become important. At that point, it depends on the cost curve of storage technologies.

If batteries or other energy storage technologies have gotten cheap enough, PV + storage will be cheaper than solar thermal. If batteries haven't dropped in price enough, solar thermal may see a resurgence.

My bet is on PV + storage, though there is no certainty here.

Two things have happened in this area recently.

1. The grams of rare earths required per watt of solar have been dropping steadily. And Solar PV panels with no rare earths at all have been developed, though they are not yet common.

2. "Rare earths" are not so rare. Their prices have tumbled substantially as new mines have opened up and substitutes have been found.

Hi. I'm the author of the original post. The amount of solar installed in the world is going to scale by more than 10x in the coming decades. There will be more than a trillion spent.

If you pick the winners, investment will have huge return.

Most solar companies, however, will be casualties in the fierce competition to come.

The other area to look at is energy storage. More renewables will increase the demand for energy storage. And it's early days in that field. Again: Huge returns for the winners. But most companies will be shaken out of the field.