Last year, the U.S. Department of Energy (DOE) announced its SunShot Initiative. The goal? Make solar energy cost competitive in the market by 2020— without a subsidy. It’s a highly ambitious goal that has never been achieved for any other electricity source.
The initiative aims to push production and installation costs further along solar’s extremely steep downward cost curve while continuing to increase technological efficiency.
One of the goals of the initiative is to fund work across the country that reduces the “transaction” costs of installing solar projects. These are costs that come from things like local permitting, utility interconnection, operation, price and rate procedures, and inconsistent or nonexistent land use and zoning guidance. (They’re mostly related to inexperience with modern solar technologies.) Out of the $5-6/watt installed costs of a grid-connected rooftop photovoltaic system, the DOE estimates that of as much as $1/watt could be saved in unnecessary transaction costs. That would equal a huge leap down solar’s already decreasing cost curve.
Source: U. S. Department of Energy, Energy Efficiency and Renewable Energy
Currently, the DOE is reviewing applications for partners in this part of the initiative. They’ll award funding soon—to the tune of $25 million (over $145 million has already been awarded). The Twin Cities have been part of DOE’s Solar America Communities program for the past few years and we partnered with Minneapolis, St. Paul, and the Minnesota Department of Commerce to apply for a SunShot grant. If funded, we’ll rely on the excellent progress that has been made so far in order to
- work on a regional and statewide basis to make sure that solar installation processes are as efficient as possible,
- make sure utility rates and prices are set appropriately,
- ensure the financial community understands opportunities in solar energy and access to financing becomes regularized and consistent, and
- make sure land use and zoning guidance becomes more consistent, relevant, and readily available to solar businesses.
So, is it possible for solar to become the first unsubsidized energy source in U.S. history? Yes, but it will take coordinated efforts to make sure costs do not become so embedded that subsidies will always be needed, as has happened with so many other energy sources. In the end, if ongoing subsidies are required, the SunShot Initiative, along with present market forces, technological innovations, and a host of other cost-reducing activities, will result in keeping those subsidies very low in the future.