Reports of the death of the solar industry are greatly exaggerated. Yes, there have been some high profile bankruptcies of US solar companies -- Solyndra, Evergreen, Spectrawatt -- in 2011. But the solar industry as a whole is on a boom that is only going to increase in coming years, which will transform how we produce and use energy.

Solar has reached scale as a global industry, growing from its first gigawatt of annual installations in 2005 (enough to provide power for about 200,000 California homes) to more than 28 gigawatts in 2011 (enough for almost 6 million homes), according to Bloomberg New Energy Finance projections. Cumulative installations will reach about 40 gigawatts by the end of 2011 -- power for 8 million homes.

Global solar power has grown an average of 68 percent each year over the last five years. This is a doubling literally every 1.3 years. So today's 40 gigawatts of capacity becomes, under the same growth rate, an astronomical 1.3 million gigawatts by 2030. Obviously, the recent rate of growth won't continue because, among other reasons, this is far more power than we need for the entire globe! But even if solar power's rate of growth drops in half to 35 percent over the next two decades, this produces a doubling every 2.3 years and we get 16,000 gigawatts (16 terawatts) by 2030 -- almost as much as the entire world will need by then.

Is this realistic? This rate of growth will surely slow, for a variety of reasons, but the interconnection queue data from an indicative microcosm of the global market, California, suggests that we will see very robust growth for years to come. California's interconnection queue has far more than 50 gigawatts of solar projects waiting for interconnection (studies take some time and then upgrades must be built so the interconnection process can take many years sometimes). Many of these projects won't be built, for various reasons, but even if 1/3 to ½ of them get built we will see a dramatic increase in solar power there.

What about cost? A large part of why solar growth has been so strong in recent years is because prices have been declining dramatically in recent years. Lawrence Berkeley National Lab (LBNL) issues a solar power market report on the US market each year. Its latest report, released this month, shows that behind-the-meter solar project prices dropped almost by half from 1998 to 2010. The first half of 2011 saw yet another 11% drop in averages in California, the biggest market in the US, from $6.4 per watt to $5.7 per watt.

Utility-Scale Solar

Behind-the-meter solar is important but is dwarfed globally by utility-scale solar. The public data for utility-scale solar is much less comprehensive but prices are far lower for this segment due to economies of scale.

Utility-scale solar projects can be from one megawatt to many hundreds of megawatts, compared to a couple of kilowatts up to one or two megawatts for behind-the-meter projects. Average U.S. installed costs for utility-scale solar in 2010 were between $3.8 per watt and $4.4 per watt, according to the National Renewable Energy Laboratory. LBNL data show slightly higher costs in its limited data set. I have reliable anecdotal data that suggest pricing for new projects to be completed in 2012 will be below $3 per watt, reflecting panel prices as low as $1.15 per watt.

What about grid parity? Grid parity depends, of course, on what grid is being considered. With federal tax benefits for solar (which apply also to nuclear, for those who think commercial solar gets a leg up), utility-scale solar projects may be at grid parity now in California.

The trend is very clear, however: we are, if not already there, well on our way to solar grid parity in California and other areas of the country that have high electricity rates. While tax benefits are a substantial factor in the viability of solar projects today, this will change quickly as prices diminish further. And this trend will expand geographically very quickly because solar production is ramping up so quickly around the world as prices drop. 

The Solyndra debacle is unfortunate. But the Solyndra story is a small part of the global solar story, which is one of the few extremely encouraging trends in the U.S. and world today. Massive solar growth will grow domestic jobs, increase energy independence, reduce greenhouse gas emissions and, as we transition to electricity as a fuel for transportation, allow for the de-carbonization of our transportation sector also.

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