RACHEL MARTIN, HOST:
For most of its history, solar power hasn't been seen as real competition by the fossil fuel industry. It was always too expensive to get a real foothold. But now prices for solar have fallen so far, it's become one of the cheapest kinds of energy on the market. Stacey Vanek Smith and Darius Rafieyan from Planet Money's The Indicator podcast have the story.
STACEY VANEK SMITH, BYLINE: Back in 2006, Ben Ho was the lead energy economist under President George W. Bush. And he was part of a team looking for energy alternatives.
BEN HO: And back then, like, solar was almost like a joke.
DARIUS RAFIEYAN, BYLINE: The energy source to beat was coal. It was the cheapest source of energy.
HO: Coal cost around 5 cents or 4 cents per kilowatt hour. Natural gas was also in that range. And solar was, like, a dollar per kilowatt hour.
RAFIEYAN: Solar power was 20 times more expensive than coal. Solar was just never going to happen.
VANEK SMITH: And then something changed - actually, a bunch of somethings.
RAFIEYAN: So for one thing, government subsidies on the state and federal level brought costs down for businesses and residents, got more people to buy into solar.
VANEK SMITH: And then companies that made solar panels started competing against each other to make cheaper, more efficient panels.
HO: And so a series of sort of small process improvements over the past 10, 15 years have brought the cost down, like, a magical amount of money.
RAFIEYAN: From $1 per kilowatt hour 15 years ago to 4 cents per kilowatt hour today.
HO: Which makes it the cheapest form of electricity in the U.S. and also in the world.
VANEK SMITH: Cheaper than...
HO: Cheaper than natural gas, cheaper than coal.
VANEK SMITH: Cheaper than coal.
RAFIEYAN: Mic drop.
VANEK SMITH: (Laughter) Yes, because when that happened, says Ben, everything changed.
HO: Before when, like, solar and renewables were more expensive, it was all about, you know, sort of getting people to, like, sacrifice to do the right thing. And now it's actually just about getting people to save money.
VANEK SMITH: Companies like Facebook and Microsoft have started investing millions of dollars in solar energy. And so has Blackstone, which brought us to the roof of a 20-story brick building in February - a roof that is now covered in solar panels.
KELLY VOHS: We're standing on the rooftop - the Stuyvesant Town. And you're looking at a few of the 9,671 solar panels that we put on our rooftops, to be precise.
RAFIEYAN: Blackstone owns the company that manages Stuytown...
VANEK SMITH: Stuytown.
RAFIEYAN: ...The apartment complex in New York with all the solar panels. And Kelly Vohs is the CEO of that division of the company. And he oversaw this big solar project. Kelly and his team installed the panels last year. And they estimate it will reduce Stuytown's carbon footprint by about 16%. Now that they have these panels up and running, Kelly says, lots of other building managers and businesses have been asking about how they might go solar, as well.
VANEK SMITH: What's the biggest question that you get from people who are considering doing it?
VOHS: Did you make money on it? They want to know, is there a return on it? Is it affordable? - all of those things. And the answer for us was yes.
VANEK SMITH: Blackstone was so jazzed about the results of its Stuytown project, it is investing another $850 million in solar.
RAFIEYAN: But at this point, solar energy still only accounts for about 2% of the energy in the U.S.
VANEK SMITH: Also, the panels need to get more efficient. For all of Stuytown's 9,000-odd solar panels, solar will still only supply about 6% of the energy for the apartment complex.
RAFIEYAN: Still, economist Ben Ho says, now that economics is on its side, he thinks solar has a bright future.
VANEK SMITH: No. No.
VANEK SMITH: No.
RAFIEYAN: Darius Rafieyan.
VANEK SMITH: Stacey Vanek Smith. NPR News.
(SOUNDBITE OF LAPTOP INSTRUMENTAL'S "THE BEATLES - HERE COMES THE SUN") Transcript provided by NPR, Copyright NPR.