|In the past, you've read our forecast: solar will become the predominant source of energy in the next decade. We're beginning to see that others (especially investment bank analysts) are recognizing just how strong this trend is becoming.
After years of struggling against cheap natural gas prices and variable subsidies, solar electricity is on track to be as cheap or cheaper than average electricity-bill prices in 47 U.S. states --- in 2016, according to a Deutsche Bank report published this week. That's assuming the U.S. maintains its 30 percent tax credit on system costs, which is set to expire that same year.
Even if the tax credit drops to 10 percent, solar will soon reach price parity with conventional electricity in well over half the nation: 36 states. Gone are the days when solar panels were an exotic plaything of Earth-loving rich people. Solar is becoming mainstream, and prices will continue to drop as the technology improves and financing becomes more affordable, according to the report.
The chart below shows how far solar will come out ahead in each state in 2016, assuming a worst-case scenario of lower tax credits. The blue bars show the anticipated cost of solar energy (assuming a conservative 20-year lifespan for the panels) minus average electricity prices. Positive numbers indicate the savings for every kilowatt hour of electricity.
This chart should be a wakeup call for consumers. Electricity prices continue to fall in America and the decline is due mostly to solar. Fossil fuel prices are falling, too, but the long term trend there is for higher prices. Only solar will be able to counteract this long term inflationary trend.