The goals of the Solar Energy Technologies Office (SETO) are to develop the technologies and knowledge base needed to continue the sweeping cost reductions seen throughout the industry since 2010, to improve the ability of solar energy to integrate into the country’s electric grid, and to combine solar technologies with storage, efficiency, and other value-adding technologies that allow solar to contribute to enhanced grid reliability and resiliency.
SunShot Cost Targets
SETO launched the SunShot Initiative in 2011 as a national effort to drive down the cost of solar electricity and support solar adoption. At the time, a dramatic acceleration of cost reduction was needed for solar to become competitive with conventional sources of electricity generation. SunShot was designed to address that need and it established aggressive cost targets for the year 2020, the most prominent one of which was achieved three years ahead of schedule. Learn more about the SunShot Initiative.
SunShot 2020 Targets
In 2011, DOE set targets for solar energy to reach market competitiveness with conventional electricity sources by 2020:
- $0.10 per kilowatt hour for residential solar
- $0.08 per kilowatt hour for commercial solar
- $0.06 per kilowatt hour for utility-scale solar
The 2020 residential and commercial targets were adjusted for inflation (to 2017 dollars), however the 2020 utility-scale target was not adjusted for inflation as wholesale electricity prices have been relatively flat from 2010-2017.
SunShot 2030 Targets
As the solar industry made rapid progress toward the 2020 targets, SETO committed to reaching new cost targets for the upcoming decade, which support greater energy affordability by cutting the cost of solar electricity an additional 50% between 2020 and 2030. The SunShot 2030 targets are:
- $0.05 per kilowatt hour for residential PV
- $0.04 per kilowatt hour for commercial PV
- $0.03 per kilowatt hour for utility-scale PV
These targets are discussed in depth in the SunShot 2030 Goals Paper.
Concentrating Solar Power
The Solar Energy Technologies Office also set 2030 targets for concentrating solar power (CSP) to enable the technology to be competitive with other dispatchable power generators. Combining CSP with thermal energy storage directly addresses grid integration challenges related to the variability of solar energy and allows solar-generated heat to be stored until electricity is needed, even well after the sun sets. Reflecting this increased value of dispatchable solar, the target for CSP peaker plants, which have no more than six hours of energy storage, is $0.10 per kilowatt-hour; the target for CSP baseload plants, which have a minimum of 12 hours of energy storage, is $0.05 per kilowatt-hour.
In addition to these cost targets, SETO is working to address the challenges related to reliably and securely integrating high penetrations of solar electricity into the grid, including studying the integration of solar with energy storage, load control and other distributed energy resources. Such advances in combination with reductions in the cost of energy storage could enable economically competitive solar to be widely deployed across the country while contributing to the reliability and resilience of the electricity grid. Learn more about the 2030 cost targets.
How We Measure
The cost targets set by SETO are measured in “levelized cost of energy” (LCOE), which determines the cost for electricity produced by solar energy systems. LCOE is based upon the sum of the upfront installation price and the present value of the lifetime operational expenses ($) divided by the net present value of the power produced (kilowatt hours or kWh). The assumptions that underlie the 2010 and 2016 LCOE estimates for PV, and the associated SunShot targets, are based upon systems installed in an average solar resource location for the United States (as represented by Kansas City, Missouri), and do not include the federal investment tax credit (ITC) or state or local incentives. The model results shown are in terms of 2016 cents per kWh.
The LCOE benchmarks and targets are derived from models developed by the National Renewable Energy Laboratory (NREL). The details related to installation price are published in NREL's Annual U.S. Solar Photovoltaic System Cost Benchmark report. The additional details and models needed for the full LCOE calculations have been published in the peer-reviewed journal Progress in Photovoltaics, and as part of the On the Path to SunShot series.