NewEnergyNews: TODAY’S STUDY: SOLAR RIGHT NOW

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

Every day is Earth Day.

YESTERDAY

  • THE STUDY: WORLD WIND’S GROWTH GOES ON
  • QUICK NEWS, April 23: MONEY COMING BACK TO NEW ENERGY; CELLULOSIC BIOFUELS FROM CORN STOVER STUMBLE; SUIT AGAINST WIND FOR BAT IMPACTS THROWN OUT
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    GET THE DAILY HEADLINES EMAIL: CLICK HERE TO SUBMIT YOUR EMAIL ADDRESS OR SEND YOUR EMAIL ADDRESS TO: herman@NewEnergyNews.net

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    THE DAY BEFORE

  • THE STUDY: THE ECONOMIC ADVANTAGES OF NEW ENERGY – THE NORTH CAROLINA CASE
  • QUICK NEWS, April 22: ON EARTH – A QUICK LOOK BACK; OBSERVATIONS FOR EARTH DAY (continued); OBAMA ADMIN UPS BACKING FOR NEW ENERGY
  • THE DAY BEFORE THE DAY BEFORE

  • THE STUDY: THE U.S. NEW ENERGY MARKET NOW AND AHEAD
  • QUICK NEWS, April 21: OBSERVATIONS FOR EARTH DAY; BACK TO OWNERSHIP IN SOLAR; 15X GROWTH FOR ASIA PACIFIC MIDROGRIDS
  • THE DAY BEFORE THAT

  • Weekend Video: Happy Birthday Solar Cell
  • Weekend Video: Offshore Wind As A Hurricane A Wall
  • Weekend Video: Get On The Climate Policy Train
  • AND THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE-THE SOLAR CELL TURNS 60, Part 5 (continued from yesterday)
  • FRIDAY WORLD HEADLINE-THE SOLAR CELL TURNS 60, Part 6
  • FRIDAY WORLD HEADLINE-THE SOLAR CELL TURNS 60, Part 7
  • FRIDAY WORLD HEADLINE-THE SOLAR CELL TURNS 60, Part 8
  • THE LAST DAY UP HERE

    THINGS-TO-THINK-ABOUT THURSDAY, April 17:

  • TTTA Thursday-THE SOLAR CELL TURNS 60, Part 1
  • TTTA Thursday-THE SOLAR CELL TURNS 60, Part 2
  • TTTA Thursday-THE SOLAR CELL TURNS 60, Part 3
  • TTTA Thursday-THE SOLAR CELL TURNS 60, Part 4
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

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  • Wednesday, August 15, 2012

    TODAY’S STUDY: SOLAR RIGHT NOW

    The State of the Solar Industry

    August 2012 (The Solar Foundation)

    Local governments are becoming an increasingly crucial part of solar’s success story. Unfortunately, a recent focus on an international solar trade dispute and federal support for Solyndra, a bankrupt solar company, may have many wondering if solar technology is worth supporting. This issue brief provides readers with an up-to-date assessment of the state of the solar industry and of the policies supporting it, and connects readers to resources they can use to promote a healthy local solar market.

    Industry Growth

    Though solar energy still represents a relatively small portion of the U.S. energy mix (less than one percent of electricity production1), domestic installations have grown rapidly over the past five years, helping solar become the fastest growing electricity source for utilities.2 Since the federal Investment Tax Credit for solar went into effect (see page 2), solar electric installations have increased at a 77% compound annual growth rate (CAGR).3, 4 Domestic installed photovoltaic (PV) capacity in 2011 grew 109% over the previous year.

    One result of this stunning growth in solar installations has been the huge increase in the number of Americans employed by the solar industry. As of the end of August 2011, there were over 100,000 solar workers (covering both solar electric and solar thermal technologies) in the U.S.5 This figure represents a 6.8% growth in employment over the previous year, made even more impressive when compared to the national average employment growth rate of 0.7% for the same period. The installation subsector accounts for over half (52,503) of the jobs in the domestic solar industry, with manufacturing (24,064), sales and distribution (17,722), and other (5,948) jobs making up the remainder. At the time of its publication, the National Solar Jobs Census 2011 projected the total number of solar workers would increase by 24% over the next twelve months. With any industry, however, continued growth depends on the existence of a stable policy environment. For example, the National Renewable Energy Laboratory estimated that solar projects funded by the 1603 Treasury Program (see page 3) supported as many as 10,000 jobs.6 At the end of 2011, Congress allowed this program to expire. It has been estimated that a one-year extension of this program would have added over 18,000 jobs to the solar industry and firms that support it.

    Falling Costs\ This impressive industry growth has translated into plummeting costs for solar customers. For the first quarter of 2012, the installed cost for a PV solar energy system, averaged across all sectors, was just $4.44/Watt (W). As illustrated in the chart at the right, installed costs for residential and commercial systems averaged $5.89/W and $4.63/W, respectively.8 Such dramatic declines in installed costs have brought solar’s levelized cost of electricity, a metric that considers lifetime costs associated with energy technologies, down to between $0.11/kilowatt hour (kWh) and $0.25/kWh.9 These prices are bringing solar closer to becoming competitive with electricity generated from conventional sources. This “grid parity”i already exists under specific circumstances in some U.S. markets and is expected to spread quickly over the next decade, with some projections indicating that, by 2021, one in three Americans will be able to “go solar” for less than the cost of electricity generated from conventional fuels.

    Policies Supporting Solar

    Federal Policies

    The precipitous growth of the solar industry in recent years can be attributed, at least in part, to the support solar energy has received from the federal government. As one might expect, industry growth has been commensurate with the growth of these incentives and subsidies. In a report published in July 2011, the Energy Information Administration estimated federal subsidies and support for solar energy totaled over $1.1 billion in 2010 – only 3% of total federal energy support that year. However, as the report’s authors note, providing a single year snapshot of the energy subsidy landscape “does not capture the imbedded effects of subsidies that may have occurred over many years across all energy fuels and technologies.”11 Properly understanding solar energy subsidies requires placing them in the proper historical context.

    Federal support for solar has primarily taken the form of tax incentives. Since this intermittent support began in the late 1970s, federal tax preferences for solar energy technologies totaled approximately $15 billion through 2010. In contrast, conventional energy sources have received much more federal support over their lifetimes: nuclear energy has received nearly $70 billion in incentives, coal has received just over $100 billion, and oil has benefitted from over $350 billion in federal support.12 The main forms of federal support for solar energy are listed below. Note that many of these provisions have already expired; by contrast, federal support for fossil fuels and nuclear energy is currently set to continue indefinitely.13

    Federal Tax Policies

    • Residential and Business Investment Tax Credits (ITC) – Provides an income tax credit equal to 30% of qualified expenditures on solar energy equipment. Expires 12/31/2016.14 This policy has proven useful for not only stimulating investment in solar energy systems, but in delivering a positive net benefit to the federal government and taxpayers. In a paper recently published by the U.S. Partnership for Renewable Energy Finance (U.S. PREF), it was found that the ITC can yield a 10% internal rate of return for the federal government.15

    • Modified Accelerated Cost-Recovery System (MACRS) – Allows businesses to take depreciation deductions for their investments in solar energy property and other renewable energy systems. This depreciation is “accelerated” in that, rather than taking place over the entire useful life of the system, these deductions are taken in the first five years after the equipment is placed in service. Eligible equipment placed in service before 12/31/2012 is entitled to “bonus depreciation” of 50%, allowing system owners to deduct half of the equipment’s cost basis in the year the system is placed in service.16

    • 1603 Treasury Program – Provided cash payments in lieu of the Business ITC. Expired 12/31/2011.17

    • 48C Manufacturing Tax Credit – Provided a tax credit equal to 30% of a business’s investment in clean energy manufacturing.18 Funding for this program was capped at $2.3 billion, which was fully allocated in November 2011.

    Federal Financial Support

    • U.S. Department of Energy Loan Guarantee Programs19 – Consists of three programs, two of which provide support for solar and other renewables:

    o 1703 Program – Provides loan guarantees for innovative technologies that “avoid, reduce, or sequester” air pollutants or greenhouse gases. The cost of this guarantee (known as a “credit subsidy cost”) is paid by the applicant.

    o 1705 Program – Provided loan guarantee for renewable, biofuel, or electric transmission projects. Credit subsidy costs were covered by an appropriation from the federal government. All loan guarantees under this program were issued by 9/30/2011.

    State Policies

    Many states across the nation offer incentives similar to those available at the federal level (such as income tax credits), as well as a number of additional tax and financial incentives. Additionally, states can enact mandates addressing certain energy-related activities within their jurisdiction, altering the manner in which energy is generated and transmitted to promote renewable energy development within their borders. States can also offer tax incentives or grants to companies that establish facilities associated with certain economic activities within their borders.

    State Tax Policies

    • Income Tax Credits – Many states offer personal and/or corporate tax credits equal to a certain percentage of system purchase and installation costs.

    • Property Tax Incentives – State property tax incentives can take many forms:

    o Exemptions of some or all of the value added to property by solar energy improvements

    o Special Assessments that value the system at less than its actual value for the purposes of calculating taxes

    o Abatements that reduce the amount of tax owed on appraised property by a certain percentage

    • Sales Tax Incentives – States can provide additional incentives for the purchase of solar energy equipment by exempting these purchases from all or a portion of state sales taxes, providing tax credits for sales taxes paid, or by taxing this equipment at special rates.

    State Financial Support

    • Loans and Rebates – The majority of states offer financial support through state loan programs. Loan amounts, interest rates, and terms vary by state. In addition, utilities in 13 states offer their own loan programs.20 Fewer states offer rebates for solar PV and/or solar water heating systems. Such rebates are typically issued on the basis of “dollars per watt” or a certain percentage of installed costs, often within certain incentive limits.

    Utility Mandates and Incentives

    • Renewable Portfolio Standards (RPS) with Solar Provisions – Renewable Portfolio Standards, a mandate from the state directing utilities to obtain a certain percentage of the electricity they sell from renewable sources by a target year, have been adopted in 29 states and the District of Columbia. Of these states, 16 (along with DC) have specific targets for solar.21 Despite assertions to the contrary, data from RPS states show no direct connection between these policies and electric rate increases.

    • Net Metering - Net metering allows utility customers to receive credit for unused electricity generated by their solar energy system. These credits are used to offset the utility-provided electricity customers consume when their solar energy systems are not producing their own electricity.

    • Performance Based Incentives – Such incentives provide payments to system owners based on the solar installation’s energy output. A Feed-In Tariff is a specific type of performance based incentive under which energy suppliers purchase a set amount of renewable-generated electricity at fixed rates through long term contracts with terms of 5 to 20 years.

    State Economic Development Incentives

    • Job Creation Incentives - States can promote the growth of manufacturing employment within their borders by offering a variety of job creation incentives. These incentives can be tax credits based on the number of employees hired or on company payrolls or can be grants to companies for each job created in the state. One example is Georgia’s Job Tax Credit (JTC), a state income tax credit of between $750 and $3,500 per job created. The amount for which an employer is eligible depends on both the level of economic development of the county in which the new jobs are located and the number of jobs created.23

    • Workforce Training Support - In order to further spur economic development, some states offer businesses support for developing a skilled and qualified workforce. Such support often takes the form of workforce training grants or reimbursements for certain percentages of training costs or wages paid for on-the-job training. The state of Arizona, for example, offers employers who create new jobs grants of up to 75% of the cost of training these new employees, or grants of up to 50% of eligible training costs for training incumbent employees.

    • Manufacturing Tax Credits and Exemptions - Finally, state governments often incentivize economic growth by relieving qualifying businesses of some or all of their income, property, or sales tax burdens. For three years, up to the end of 2011, Michigan offered its Refundable Photovoltaic Manufacturing Tax Credit to businesses establishing PV manufacturing facilities in the state. This credit was equal to 25% of the capital costs associated with constructing such a facility, up to $15 million per credit.25

    Local Policies

    Though federal and state policies provide strong support and incentives for solar energy, there are a number of key actions only local governments are able to take to promote and remove barriers to solar development, such as those listed below. In addition to adopting new (or modifying existing) policies that impact solar development, local governments are also uniquely poised to promote solar by other means. Counties and municipalities can lead by example by having solar energy systems installed on government buildings or land, demonstrating the long-term economic and environmental benefits of going solar. Furthermore, a growing number of local governments have sought to catalyze strong local solar markets through “solarize” programs, designed as concerted, limited-time programs that connect homeowners to solar installers.26 By negotiating group discounts, vetting and selecting contractors through a competitive process, and conducting outreach and education on the economic and environmental benefits of going solar, local governments can jump-start strong solar markets in their areas.

    Local Tax Policies

    • Property Tax Incentives - While many states provide property tax incentives for solar energy systems, others leave the decision to do so up to local governments. In these cases, local officials can choose to provide exemptions, special assessments, or abatements that do not exist at the state level, opt-out of exemptions that do exist on the state level, or target sectors other than those covered by state incentives. Additionally, some jurisdictions offer homeowners tax credits to reduce tax liability for the buildings on which solar energy systems are installed.

    • Sales Tax Incentives - Several states exempt purchases of solar energy equipment from state sales taxes. Only two states, Colorado and New York, take the extra step of allowing local governments to exempt such purchases from their portion of the sales tax as well.

    Local Financial Support

    • Loans and Rebates – Local loan and rebate programs may exist in addition to those offered at the state level, or in some cases where state incentives aren’t available. Examples of local financial policies that are especially innovative and those that cover very large populations are available online at www.dsireusa.org/solar.

    • Property Assessed Clean Energy (PACE) - PACE programs allow homeowners to finance renewable energy or energy efficiency upgrades through special property tax assessments. Over half the states in the nation have passed legislation authorizing local governments to institute such programs. However, most of these programs remain in limbo while the Federal Housing Financing Agency promulgates rules governing the purchase of mortgages for properties with PACE liens.

    Local Government Ordinances

    • Permitting - Streamlining the application process for solar building and/or electrical permits and establishing fair and consistent permitting fees can help reduce the time, money, and effort required to go solar.

    • Planning and Zoning - Local governments can remove barriers to solar development by updating planning and zoning ordinances related to solar. By protecting homeowners’ rights to install solar energy systems, ensuring their access to sunlight is not unreasonably restricted, and encouraging developers to build homes with solar in mind, cities and counties can promote local solar development.

    Local Economic Development Incentives

    • Job Creation Incentives - Some local governments (typically large counties or municipalities) have been able to offer direct cash incentives for job creation, usually in the form of a fixed number of dollars provided for each job created. In late 2010, the City of Goodyear, Arizona offered the solar manufacturer Suntech job creation incentive payments of over $6,000 per job created

    • Workforce Training Support - Cities and counties can provide additional incentives to solar firms seeking to relocate to these jurisdictions by offering payments or other incentives to help offset the costs of training new employees.

    • Manufacturing Tax Credits and Exemptions - As with state governments, local governments can exclude certain purchases or manufacturing activities from some or all of the taxes under local control (i.e., sales and property taxes). The City of Austin, Texas provided such support to Heliovolt, a manufacturer of solar modules, offering the company grants equal to 60% of the property taxes associated with a new facility planned for the area. 28

    • Loans and Grants - Finally, some local governments have been able to provide companies with low interest loans or grants to cover a portion of capital expenditures (such as equipment, buildings, infrastructure improvements, or materials) associated with establishing a local presence.29, 30 As part of a package to attract solar panel manufacturer Twin Creeks Technologies to its area, the City of Senatobia, Mississippi partnered with the state to provide $4 million in infrastructure upgrades to the site of the proposed facility.31

    Future Growth

    The long-term outlook for solar is quite positive. Analysts predict further dramatic decreases in the price of solar within a decade. For large-scale solar farms, unsubsidized electricity prices are expected to drop from $0.11 - $0.18/kWh to $0.09 - $0.15/kWh by 2014, falling to $0.04 - $0.07/kWh by 2020. Rooftop solar is expected to experience similar cost declines, making it competitive without subsidies in areas with high electricity rates and an above average solar resource.32 Despite such positive long-term projections, the current strength of solar markets still relies strongly on public support. Achieving these cost reductions, along with a four-fold increase in solar installations by 2016,33 requires a sustained policy commitment at all levels to developing our cleanest and most abundant energy resource.

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