Smaller, cheaper, faster: Does Moore’s law apply to solar cells?

From Ramez Naam writing in SciAm Smaller, cheaper, faster: Does Moore’s law apply to solar cells?
Solar may be cheaper than conventional electricity by 2018. This will do many things, (de-carbonization of electricity, etc.), but it will also help electrification of the fleet.

The National Renewable Energy Laboratory of the U.S. Department of Energy has watched solar photovoltaic price trends since 1980. They’ve seen the price per Watt of solar modules (not counting installation) drop from $22 dollars in 1980 down to under $3 today.
Is this really an exponential curve? And is it continuing to drop at the same rate, or is it leveling off in recent years? To know if a process is exponential, we plot it on a log scale.

And indeed, it follows a nearly straight line on a log scale. Some years the price changes more than others. Averaged over 30 years, the trend is for an annual 7 percent reduction in the dollars per watt of solar photovoltaic cells. While in the earlier part of this decade prices flattened for a few years, the sharp decline in 2009 made up for that and put the price reduction back on track. Data from 2010 (not included above) shows at least a 30 percent further price reduction, putting solar prices ahead of this trend.

What’s driving these changes? There are two factors. First, solar cell manufacturers are learning – much as computer chip manufacturers keep learning – how to reduce the cost to fabricate solar.
Second, the efficiency of solar cells – the fraction of the sun’s energy that strikes them that they capture – is continually improving. In the lab, researchers have achieved solar efficiencies of as high as 41 percent, an unheard of efficiency 30 years ago. Inexpensive thin-film methods have achieved laboratory efficiencies as high as 20 percent, still twice as high as most of the solar systems in deployment today.

What do these trends mean for the future? If the 7 percent decline in costs continues (and 2010 and 2011 both look likely to beat that number), then in 20 years the cost per watt of PV cells will be just over 50 cents.

Indications are that the projections above are actually too conservative. First Solar corporation has announced internal production costs (though not consumer prices) of 75 cents per watt, and expects to hit 50 cents per watt in production cost in 2016. If they hit their estimates, they’ll be beating the trend above by a considerable margin.