Photovoltaic (PV) technology uses optics such as lenses or curved mirrors to concentrate a large amount of sunlight onto a small area of solar photovoltaic (PV) cells to generate electricity.
PV installations can operate for many years with little maintenance or intervention after their initial set-up, so after the initial capital cost of building any solar power plant, operating costs are extremely low compared to existing power technologies. Grid-connected solar electricity can be used locally thus reducing transmission/distribution losses (transmission losses in the US were approximately 7.2% in 1995).
Though the average installed utility system price has dropped significantly in the last few years, it is assumed this rapid reduction has been distorted (McKinsey & Company, Solar Power: Darkest Before Dawn: 2012), as manufacturing capacity and demand have been out of balance with the changes in European and American feed-in tariffs over the last few years. When the cost of labour, equipment, silicon efficiency, glass, silver, silicon processing and aluminium accounted for, prices are appearing to approach a commodity price wall.
A report commissioned by the US Department of Energy (National Renewable Energy Laboratory, 2012) found that although installed PV prices were expected to drop due to increasing competition between installers (as in Germany), the installed prices would not hit SunShot’s prize targets due to PV prices not dropping drastically enough.
Additionally, flat plate systems use a lot of land and tend to overheat in hot countries. Overheating significantly reduces their efficiency, more so than CPV systems. They have lower efficiency of <17% and are approaching theoretical maxima at the premium end.