Reply #36: Good points. The PV panels are an expensive part but only part of the system.

[Statistical]

PV system consists of:
a) PV panels = $2.00 to $4.00 per watt right now (depending on quality, efficiency, size of system & retail markup)
b) Inverter = $0.50 to $1.00 a watt
c) Racking & Wiring = $1.00 a watt
d) labor = $1.50 to $3.00 a watt
--------------------------
Total: $5.00 to $9.00 a watt

While PV panels are likely going to continue to drop in price the other components are much more mundane. Inverters have been around for decades in a variety of aplpications and we haven't seen the price go to $0.00. Racking is little more complicated that metal beams, screws, and bolts. Prices are unlikely to go down at all (inflation in metals means price may even rise).

Labor could go down some if either:
a) it becomes so widespread that unskilled labor can be used
b) some new mechanism for deploying becomes commonplace.

However both of these require something beyond the advance of silicon to see improvement. I am certain we will see quality high end PV available for <$1.00 within four or five years. However even if PV are below the magic $1.00 watt each reduction would have less of an impact on overall system cost.

Going from $4 a watt down to $2 a watt cuts system cost by 23% but going from $2 a watt to $1 a watt only cuts system cost by another 14%. Cutting price down to $0.50 a watt is only another 8% reduction.

Solar has huge potential and installed solar capacity will only rise but predicting that we will see solar completely dominate in 16 years based on price of silicon falling is naive. It assumes:
a) silicon prices will continue to see exponential growth in yields without slowing
b) the non-silicon components will fall in cost by similar margins.

Neither are realistic and those real world conditions will make the growth in solar much slower and harder to predict.