I'm a fan of solar and wind. I buy into the optional wind-source program offered by our local utility even though it raises my electricity bill by about 5%.
But when I recently looked into installing solar, got a quote from a local installer, it was going to cost $13k (after federal tax credit/subsidy) to buy and install a grid-tied system. That would replace about 1/2 the 700 kwH / month that we use at our house (gas heat, gas hot water, gas cooktop). Our utility charges $0.135 / kwH. The payback for the installation without counting on any alternative return on investment for the $13k was 16 years. The other assumption is that the solar system requires no maintenance.
Here is some of the information I got from the installer during the bid process:
1. In northern states in the USA, you can figure on about 1,250 kwH per year from 1,000 watts (manufacturer peak rating?) of panels. So if you use 625 Kwh / month, you need 6,000 watts of rated power to replace your usage 100%. That's only 24 250 watt panels, or a panel price of 6,000-$7,500.
2. If your panels do not get 100% equal sunlight, the array will produce at the rate of the most shaded panel. UNLESS you buy the panels with the inverter/converter built into it. Then each panel produces whatever it can, independent of the production of the other panels.
3. Batteries are expensive and they wear out in 10 years. So if you buy a big battery system for $6,000, you're effectively spending $600 / year on the batteries unless you make unicorn-rainbow assumptions about advances in battery technology. For this reason, a grid-tied system is probably going to be about $50 / month more cost effective.
4. Mounting systems for attaching the panels to your roof can cost around $100 per panel.
So, install it if it makes you feel good, or if you live in a place where power costs far more than the $0.135 / kwh it costs where I live. But until the costs drop by 50% or the price of power doubles, I'm not going to buy.
I think Morgan Stanley is probably going to turn out to be wrong. I don't think we'll see solar panel prices continue to drop 20% / year and right now, panel prices are only about 1/3d the cost of a system, the other pieces and the labor are 2/3rds, so even if solar panels dropped 20%, the cost of an installation would drop at best 10%, and more likely something like 6.7%.
Large-scale wind farms look more likely to me.