Solar power will be competitive with mainstream electricity generation method in five years according to Cypress Semiconductor, which has a solar cell manufacturing subsidiary, SunPower. Norm Taffe, executive vice president of Cypress, said that "We're four to five years away from the point at which solar is cost-effective with traditional electricity generation without any subsidy."
SunPower has a higher conversion efficiency of 20%, the highest in the industry and doesn't see much improvement in that, rather sees cost savings coming from increasing production efficiencies.
Cypress's forecast of when solar PV costs will be competitive with traditional electricity generation is optimistic by my usually optimistic estimates, at least for silicon PV cells. SunPower, because of its affiliation with Cypress doesn't have to worry nearly as much about silicon supplies, but that doesn't mean that their cost will be any less. According to forecasts I have seen, we will have a silicon shortage until 2009. Until then cost reductions, for the most part, will come from using less silicon by making the cells thinner and recycling scrap silicon more efficiently. The thin-film PV suppliers will, in the meantime, be ramping up their production, so that by 2009 a couple of them should be among the top ten suppliers at a lower cost than conventional silicon PV suppliers, but not competitive with conventional electricity. I believe that solar PV will eventually be competitive with traditional electricity production, but not for 7 to 10 years. The volume of solar cell production required to make a dent in the market for electricity is so great that production rates of several gigawatts a year will be required from several suppliers - that is a difficult feat to accomplish in a short time. It is likely that gigawatt production quantities are required to get the production costs down to a competitive level. Silicon, or for that matter supplies of raw materials for thin-film manufacturers, will be pressed to keep up with that demand. That is what I see as the Achilles heel of PV solar and why thermal and concentrating PV will be in the mix for a long time and may be the winner in the long term because of their dominant position.
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The Energy Blog: Cypress: Solar Power to be Competitive in Five Years
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