Why Solar is Looking Better for Commercial Buildings

In two years, the prices for solar photovoltaic panels have plunged as a result of greater efficiencies in manufacturing and in the technology itself. Increasing competition among a growing number of suppliers has also helped reduce costs.

The forces are expected to drive prices further down in coming years, making solar PV installations a brighter investment prospect for commercial buildings, according to Greg Sheppard, the chief research officer for photovoltaics at market intelligence firm IHS iSuppli. Sheppard explored the reasons why in a webinar for GreenBiz.com this week with Clean Edge Senior Editor Clint Wilder.

Solar power applications are "transitioning from the world of pretty showcases into actual, practical, functional uses on buildings," Sheppard said in the webinar, "Solar Powered Buildings: Worth Another Look as Prices Fall."

Currently, though the market has grown significantly, solar power supplies less than 1 percent of the electricity used in the United States. A capital-intensive proposition, like most renewable energy technologies, payback periods on the high end tend to range from 20 to 25 years.

So, why consider solar now? Sheppard offered six reasons:

  • Prices have dropped enough to be financially advantageous.
  • Your business can lock in lower electricity costs.
  • Your business can then have more predictable electricity costs.
  • You might not need any upfront capital.
  • Many utilities need to hit RPS (renewable portfolio standard) goals and, in some cases, lower "peak time" generation costs.
  • Doing so can help your company achieve sustainability goals.


Clean Edge's recent annual report on clean energy trends, released earlier this spring, found that the global market for solar photovoltaics ballooned from just $2.5 billion in 2000 to $71.2 billion in 2010.

Last year, "the market just exploded," Sheppard said, and now the PV market worldwide is poised to double in by 2015. The U.S. market is expected to grow steadily throughout the period despite a likely blip next year as a result of feed-in tariff changes abroad. Here is a chart that Sheppard included in his talk:

Next Page: Plunging prices.