The State of the PV Industry Lane S. Garrett The decade of the 80's saw price reductions faster than expected by industry "experts" in the sales of Photovoltaics ( PV for short). Costs of a PV module or a certain amount of power is normally measured in terms of dollars per peak watt or, $/Wp. This is the output of a module, with an ideal load, in Watts under full sunlight defined at a strength of 100 milliWatts per square centimeter. PVs sold in the early '70's were over $50/Wp and had dropped to $12 - $15/Wp by 1980. By the end of 1989, a shopper could buy quality PV power for just under $6/Wp. This is equivalent to over a 5% drop in price per year; if inflation is considered, this amounts to about 10% per year in real dollars! 1989 was a first for the PV industry, when average selling prices from the manufacturers actually increased slightly! This stabilized prices in the industry and brought most factory costs to a break-even or profitable level. With demand currently outstripping capacity, most of the manufacturers are backlogged up to 3 months delay for some products. Manufacturers are rapidly expanding facilities and even planning new plants. With this significant improvement, the financial community is beginning to look favorably on the PV industry. Maybe the banks will learn how to pronounce Photovoltaics, and make loans available at good rates. After all, a PV system costs about the same as a new car, and lasts a few times longer. PV system sales went from several million dollars a year starting 1980 to an estimated .5 billion dollars in 1989. If the industry can hold last years growth rate, (about 35% to 37%), system sales will reach 20 billion dollars by the turn of the century. What does all this mean for us as potential users? Simply, as industry volume increases average selling prices will continue to drop to about $3.50/Wp in constant 1989 dollars. On the other hand, utility prices will continue to increase at an estimated 6% per year. Thus $.10 per kW-Hr climbs to $.18/kW-Hr in 1999. Compared to gasoline generators, PV has been considerably more cost effective over the last decade. Total costs of PV, including all maintenance costs, are now about 25% of fossil fuels over a 15 year period. Also PV has been the choice for over all reliability from mountaintop communications to water pumping for cattle. In the next decade, you will see PV power inside the utility grid in numerous applications. Reasons for this new PV territory are numerous. Powering your pool circulation pump with PV, for example, gives an after tax return on system cost of 12% to 14%. This is a better use of money than available elsewhere. Intercity street lights, bike path lighting, bus shelters, etc. are often lower in cost using PV than connecting to the utility. Also PV costs are now such that a well designed solar home employing high efficiency appliances is cost effective. Electrical independence requires an increase of about 15% in the mortgage payment. (Many families already have Utility bills exceeding 15% of their mortgage). An increasing number of families are desiring to own rather than rent their electricity. Europe has become fed-up with the disastrous results of acid rain and is moving rapidly toward renewable energy sources (especially PV). This trend should move to the U.S. over the next year or two as the public becomes more environmentally aware. Experts state that the true cost of our electricity is 50% to 100% higher when we assess the true environmental impacts of pollution, acid rain, and the warming trend due to the Greenhouse Effect. We have an important role to play in getting the word out to the general public; that photovoltaic power when coupled with reasonable conservation is a viable alternative to using fossil fuels; that PV is already cost effective in many applications; and PV does not pollute our environment. Many don't realize that PV modules now have a life-time equivalent to the windows in their homes. The PV will still be making power long after the mortgage is paid off. By working together we can make a difference through our purchasing vote and helping to educate our friends and acquaintances. Access Lane S. Garrett, P. E. C.E.M., SunAmp Power Company, POB 6346, Scottsdale, AZ 85261 ¥ 602-951-0699.