Why is solar power so expensive in America?

Why is solar power so expensive in America?

Solar power is now as cheap as traditional energy sources in Italy and Germany, according to a new report. In terms of LCOE — or "leveled cost of energy," which weighs everything that effects a given energy source's price from installation to maintenance — solar has achieved "grid parity" in those places thanks in part to a combination of cheap installation costs, high electricity prices, and government subsidies.

Meanwhile, the cost of solar power in the U.S., though it has fallen off a cliff since the late 1970s, remains relatively high. So what gives? Why can't we have cheap, clean solar power, too?

The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

But the biggest factors keeping American solar from catching up are so-called "soft costs," which include everything from fees and taxes to company overhead. For instance, while German installers added $1.20 per watt to the cost of each panel in 2011, American companies added $4.36 per watt. And according to the Department of Energy, soft costs make up 64 percent of the price tag on installing residential solar systems in the U.S.

Explore More
Jon Terbush

Jon Terbush is an associate editor at TheWeek.com covering politics, sports, and other things he finds interesting. He has previously written for Talking Points Memo, Raw Story, and Business Insider.