Solar power may meet 4.2 percent of U.S. electricity supplies by 2020 as lower costs make investments more attractive, according to a report from Bloomberg New Energy Finance.
Investments in solar energy reaching $100 billion during the next decade would boost capacity to 44,000 megawatts, up from 1,400 megawatts today, the London-based research and analysis company said today in a statement.
A drop in costs for both solar thermal technology and solar photovoltaic panels to less than $200 a megawatt-hour has helped increase returns on investments. Commercial rooftop solar systems generate returns of 8 percent to 14 percent in some states and more in states with strong incentives such as Hawaii, Texas, New Jersey and Massachusetts.
“There is a very positive growth story for solar in the U.S.,” Michael Liebreich, chief executive officer of New Energy Finance, said in the statement. “A few more years of support, and then the engine of unsubsidized competitiveness will take over.”
Commercial solar systems will make up about half of total installations, with the remainder split evenly between residential rooftops and large utility-scale plants. About 2.4 percent of households will have a solar system by 2020, the group said.