The (Slow) Rise of Solar

Within the field of electricity production, solar power is one of the most popular topics. Surveys show that Americans are very supportive of solar, and investments in solar are rising. Despite all the hype, solar energy represents less than 1% of U.S. electricity production. Why is solar so big, yet so small?

A Slow Rise

The status of solar energy in the U.S. can be represented by two different graphs. The first, illustrated by the bar plot below, shows solar’s small percentage of grid electricity production. At 0.9%, solar’s electricity generation in 2016 was very low compared to the likes of coal – at 31% – and natural gas, at 32%. 


Another way of viewing solar energy is by its recent growth. The second graph, shown below, shows a remarkable rise in the amount of grid electricity produced by solar power since 1984. Specifically, solar grid electricity production has increased from 5.248 thousand megawatthours in 1984 to 36,157.12 thousand megawatt hours (3.6 million) in 2016. Just in the period between 2012 and 2016, solar electricity generation rose 768%.


Both graphs are important to analyze because they point to the reality of solar energy in the U.S.: the energy source is still generating a low amount of electricity but the number is increasing fast. Competing against the likes of fossil fuels like coal and natural gas was never going to be easy but at least solar is getting its foot in the door. 

What Levelized Cost of Electricity Can Tell Us

According to the Environment Information Agency, the Levelized Cost of Electricity (LCOE) refers to the “per-kilowatthour cost (in discounted real dollars) of building and operating a generating plant over an assumed financial life and duty cycle.” In other words, the LCOE is the total of all costs (construction, fuel, operational costs, etc.) divided by the expected life-time energy output. The lower the LCOE is, the more value the energy source has. While the LCOE of solar photovoltaic (PV) and thermal have been high for many years, both energy sources have seen their values rise in recent years. The graph illustrates the decrease in LCOE over six years – from 2010 to 2016 – for solar thermal and PV compared to other energy sources. 


LCOE Graph (Data)

Specifically, the LCOE of solar thermal decreased by 16% in the 2010-2016 period and PV’s decreased 80%. While thermal is slowly becoming competitive, PV’s cost has fallen sharply and its LCOE is comparable to most other energy sources.

The LCOE for PV has decreased for many reasons, including significant efficiency improvements and subsidies. Research and innovation has seen solar PV in particular reach a record efficiency of 26.6 percent.


For solar energy to reach the likes of coal and natural gas, a few problems need to be addressed, including variability and low energy conversion efficiency. Nonetheless, the significant decrease in solar costs – particularly in PV’s – will lead to an increase in the amount of electricity produced by solar. The question now is how fast will it grow.