There are a lot of people saying solar is too expensive and will never make it without a major technology breakthrough. From what I can see, they are wrong. Solar PV is probably the MOST economical solution and the technology available today is pretty close to being economical if widely adopted. There certainly is a clear path for economical feasibility in the next five years. And solar (with other renewable energy) is the ONLY long term (20+yr) solution.
First, let's compare apples to apples. All energy is expensive. All energy we use now is subsidized by the government (Especially if you include the military expenses for assuring a "cheap" supply). The energy companies do a good job at hiding their incentives. Fossil fuels were cheap, but we have used up more than half of the cheap stuff, and will run out of the rest of it in a few years. What is left is capital intensive to get. Not to mention the cost to our environment!
Solar energy is in the infant stages. It is like automobiles in the 1910's and like air conditioning in the 1950's. It is growing exponentially, and just in the last two years hit some levels of economy. In the 1980's, it would cost you $20,000 for 1 kW of solar. In the 1990's, it would cost you $10,000 for 1 kW. Now, our costs are down to $7,000 per kW on the residential scale and $5,000 per kW on the utility scale. These cost will continue to come down slowly, and here is how:
1) PV materials. The largest expense for solar PV is the panels. Panel prices have been high, ~$4/W, over the last few years due to demand outpacing supply. With a slow in the world economy, and a plethora of new Chinese manufacturing, c-Si panels have dropped to $2.50/W (purchased in multi MWs). A study I attended a few years ago showed that c-Si panel prices could be manufactured at $1/W based on technology at the time. Today, some manufacturers have reached that target. The downward trend will continue by just a series of small improvements in the efficiency of existing technology.
2) Installation Labor costs.
About a third of the labor cost of solar is training. People are generally ignorant about solar systems and about a third of a solar installer's efforts are just educating the consumer and all the people with whom he/she has to work. There is no educated work force, so anyone in the business must spend a lot of time and money on training employees. This will change as people get used to solar being a part of everyday life.
There are no building code standards for solar, so a lot of time is spend figuring out how to work through the city codes. Many jurisdictions now require a Professional Engineer to review and stamp any solar installation. Is that needed for an air conditioner or a water heater? There are also TWO approval processes needed for each installation, one with the city/county and one with the utility (unnecessarily redundant). This will get better as city officials become more familar with solar.
Most buildings require a lot of "art" to work panels around obstacles on the Southern facing roof and make the proper structural attachments. Then, a lot of thought about how to tie into an electrical system that wasn't made for solar. This is getting better as architects and builders become more familiar with solar.
With manufacturing scale and a society accustomed to solar, the price of $4,000 per installed kW is easily in site, which comes out to about $0.15/kWh (with NO incentives). This price point is already available today for people is areas that have rebates (Austin, Dallas, Denver, California); and people in those areas who understand economics and have a property on which to place the panels are buying PV - its just smart.
One foolish argument that I see many people make against solar (and wind) is the sole comparison of capital costs. Solar is pure capital cost - operating costs are next to zero. Fossil fuel and nuclear plants have three major cost components, capital, operating and environmental. In addition, transmission and distribution of fossil and nuclear (and wind) energy nearly doubles the cost to the consumer. In the end - look at the final $/kWh the consumer pays.
Another foolish argument that I commonly see is a comparison of yester-year's fossil fuel plant costs (much lower than today) and yester-year's solar costs (much higher than today). Even usually reliable sources make this mistake, including a recent article in Scientific American.
Solar energy with present technology can be cost competitive against other energy resources. Technology improvements that lead to lower cost are a bonus.
I hope all of you will see and understand. I can not convince those who are addicted to fossil fuels and especially not those addicted to revenue from fossil fuels. Please don't let them take you down with them.