Posted on 06/22/2007 6:06:55 AM PDT by Uncledave
Solar power costs dropping, nearing competition Thu Jun 21, 2007 3:35PM EDT
By Rebekah Kebede
NEW YORK (Reuters) - Solar energy is fast closing the price gap with conventional U.S. power sources and is likely to drop to near even in cost in many regions in the next few years, industry sources said this week.
Price declines for the clean energy have been driven by the ramp up in production of solar cells and panels and advances in technology that have increased the cells' efficiency.
Under current laws that expire in 2008, installation of solar power systems are subsidized by a 30 percent investment tax credit that helps narrow the gap between the cost of 20 to 40 cents per kwh and typical U.S. retail electricity costs of about 10.5 cents per kwh.
Congress is debating a possible extension and expansion of current solar subsidies as part of a broader energy legislation package.
But much of solar's viability hinges on whether the systems can feed power directly into the grid systems used by utilities, Michael Ahern, CEO of solar module manufacturer First Solar Inc., told Reuters Wednesday at the Renewable Energy Finance Forum.
Currently, utilities can buy power from low-cost coal-fired plants for around 4 cents per kilowatt, and sell the power to households and business at about 12 cents per kwh, although prices can be much higher during peak usage hours, said Ahearn.
However, in a supply-constrained market such as California, Ahearn said, power prices ranged from 12 to 23 cents per kwh, making solar nearly competitive.
First Solar hopes to offer retail energy buyers competitive power prices of 8 to 11 cents per kwh as early as 2010, Ahearn said.
"If we can hit 8 to 10 cents, I think we're going to open some markets," he said.
With power prices climbing and the cost of solar power falling, the outlook for solar energy is bright, said Alf Bjorseth, CEO of Swedish company Scatec.
In some markets, solar energy is already a cost effective source of power, Bjorseth said, and that trend is set to expand, especially in larger markets.
New technologies such as thin film solar modules and the use of nanotechnology will further boost solar energy affordability, according to company executives at the conference.
Tempering that optimism, however, were several challenges to the industry, including a shortage of the silicon that is used to make solar modules, which has hampered industry growth, said Bjorseth.
The regulatory environment may also prove to be an obstacle to solar power, according to Ahearn.
Investing in new solar installations also remained risky because no clear regulatory framework existed to compare how renewables would fare economically over the long-term against more conventional sources, even with federal subsidies, Ahearn said.
(Additional reporting by Matt Daily)
Mainly the cost to the customer is being reduced through gov't subsidy if you can get it. The cost of solar cells does not appear to be moving, hasn't moved in 1/4 century.
Solar will reach cost effectiveness for most people within the next 10 to 20 years or less based on current trends.
If I lived out west in a desert state its a no brainer... here, in the temperate rain forest, its a more dubious proposition.
You heard now - I just copied this off a "solar power cost" query on ask.com:
"Raw silicon crystaline cells are produced near the $3 per watt level now".
Thanks for the ping, bump for later reading
I just want my own nukular reactor and the hell with everybody else.
Like I said, $5 a watt remains. Production costs are not retail costs.
Availability and reliability seem to be the Achilles' Heel of any kind of system that depends on the vagaries of natural phenomena. Just the other night it was bloody hot and humid with not a hint of a whiff of breeze in the air. But I was very happy to get a good night's sleep thanks to the faithful old A/C and the reliable old grid. A windmill would likely have zero output under the same conditions.
Probably the opposite. As the article states, one of the biggest costs was in getting sufficient production capacity. The government subsidies would have helped to create that capacity without generating correspondingly high prices for the buyer.
~ Why aren't using nearly 100% solar power in places like Florida, California, and Hawaii?
~ Why aren't we putting EZ Turf (or another such real-looking grass product) in all public areas? (i.e. islands in intersections, neighborhood parks, parkways along roadsides, etc.) --no water, no maintenance!
We could ALWAYS be/act "smarter" toward conservation.
Bump
I wouldn’t characterize incorporating renewables into the energy mix as making people go back to the choices your grandpa made — water or no water.
These technologies promise to be a good piece of the puzzle and I’m glad we’re pursuing them.
The three largest windows on my house function like a greenhouse. Unfortunately, it's summer and all that does is increase my cooling bill.
Needless to say, I'm currently looking at alternatives to reduce the amount of radiant heat I'm getting in the summer.
I live in CT and drive 20 miles down I-84 to work. I drive passed what's eaily a couple of thousand of acres of frequently mowed grassy median -- the media is 30-40 yards wide for stretches of miles. Why not let trees grow there? For the liberal global warming crew, of which CT is infested, wouldn't this mean less gas used in lawnmowers, millions of dollars of maintenance costs saved, and more trees to absorb CO2, not to mention a prettier drive?
Well, that's the concern. If we rely heavily (and some advocate this, not necessarily you) on energy sources that are inherently chaotic and unreliable, we may be faced with that very choice, although it may not be so much of a choice as a requirement.
The folks in CA got a taste of this a few years ago when they had their electricity shortages. Their choices came down to, blackout now, or blackout later. Thing is, there were people just a few years before agitating for the trashing of the Rancho Seco nuclear plant that used this very argument, that we didn't need nukes to provide the capacity we needed, wind would do as well. Turned out, reality bit them in their a$$e$. During their heat wave, wind-generated electricity in CA averaged about a 5% capacity factor. IOW, when they needed it most, it wasn't there. Contrast that with the nuclear industry, where 90-100% capacity factors are becoming routine.
Do you buy a new car every month? Why not?
For most of us, the reason would be that the expense would not be justified.
The answer to YOUR question is the same. The expense is not justified. Such "solutions" may have become MORE attractive over time, but there are no true savings to be had.
You mustn't base your decisions on highly biased reports of how damaging CO2 is going to be or how limited the world supply of crude oil is.
I worked in a business environment in which a one year payback on investment was considered quite attractive. Two years was also pretty much a no-brainer. But when you calculate a ten year payback, then you are dealing with a situation where circumstances might quickly change and cause the investment to have no payback or possibly even a long term cost that was not anticipated.
When solar energy installations have payback periods close to two years, without the uncertainty of continued government subsidy, then you will see significant activity.
Your points about investments are sound, but to be fair there's no energy generation projects with two year paybacks.
Not gonna happen - we're not going back to your grandpa's off-grid days. California had those brownouts, and continues to have problems meeting demand, due to short-sighted infrastructure investment and power contracting, not because of depending on a chaotic energy resource. Certainly nukes are essential and would have helped them, but it was never the intent that a few hundred megawatts of installed wind energy would displace that base load requirement.
Nevertheless, renewables, given modern technology, can be an attractive piece of the puzzle.
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