Professor Stefan Reichelstein

The Rapidly Changing Economics of Solar PV Power

This talk examines the economics of solar photovoltaic power both from the perspective of investors in solar installations and from the perspective of solar panel manufacturers. For investors, the key consideration is the cost competitiveness of solar PV relative to other electricity sources. The model calculations Prof. Reichelstein will present focus on commercial – and utility scale installations, highlighting the importance of geographic location and the role of federal tax subsidies.

To project the economics of solar PV in coming years, Prof. Reichelstein will summarize some recent work that examines changes in the manufacturing costs of solar panel manufacturers. These findings suggest that the dramatic reductions in module prices over the past few years are partly attributable to cost reductions, but also to massive additions of manufacturing capacity that arguably left the industry with excess capacity. The talk will present a methodology for quantifying the magnitude of these two effects in order to make predictions about the future price trajectory of solar panels and, by implication, the competitiveness of solar power.

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