Dollars per watt ($/W) is a lousy measure of the economics of solar, but it persists.
Most likely, it persists because it seems familiar. We can pay $4 for a watt of solar, or $4 for a Iced Hazelnut Macchiato at Starbucks. Unfortunately, while the analogy may seem apt, this is a lot like knowing you’re getting a Macchiato without knowing if it’s a Tall, Grande, or Venti. The actual energy production from a solar system depends greatly on a number of factors, including location, orientation, mounting structure, shading, string configuration, and choice of inverter.
Nevertheless, dollars per watt persists. You’ll find it even in industry reports like US Solar Market Insight from GTM Research, . .
Knowing that I can’t beat them, I decided to join them. I used dollars per watt to provide a rough guide of how much solar an investor gets when buying the stock of publicly traded companies that own or finance solar: SolarCity (NASD:SCTY), NRG Yield (NASD:NYLD) and Hannon Armstrong Sustainable Infrastructure (NYSE:HASI) in a recent article about solar leases.
Here, I take it a little farther, and look at $/W for all renewables. . . .
Dollars per watt is at best a rough starting point when evaluating a bid for solar on your home, or for evaluating companies that own renewable energy generation. On the other hand, it works well with the intuition we’ve honed with years of trips to the grocery store and coffee shops. That intuition may make these charts useful as you develop your understanding of renewable energy power producers. . . .