Skip to comments.Solar power costs dropping, nearing competition
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)
When there’s a problem, we humans, especially Americans, solve it! All the moaning and wailing about the high cost of gas will stop! All the socialist nonsense that’s pushing the “global warming” myth will end.
If solar power becomes cost-effective, the dependency on middle east oil will end, and the billions of dollars that are wasted on the middle east will stay in the USA, and the USA won’t have to waste the billions of dollars that it pours into the middle east to keep the oil flowing, and the jihadis won’t be receiving trillions of dollars of our money that they use to kill Christians and Jews.
Well, in an effort to find common ground, let me say this. If the energy storage problem can be solved, I've always thought the following would provide a very clean environment with reasonable-cost electricity:
1. Use nuclear units for meeting baseload demand, since they are a reliable, intense energy source that produces humongous amounts of energy at low cost, and
2. Use renewables for production of stored energy that can be tapped to fill in the gaps in the demand curve. This avoids the problem of renewables as an unreliable source of capacity. IOW, think of the renewables as a source of energy, not capacity.
If one is in the business of generating energy, then long term plans with more modest expectations can be successfully pursued. But even here, one can see the significant effect of the political situation.
My comments would be more applicable to incremental improvements to businesses or private installations whose purpose is not related to energy generation.
Thus the reason for my post...see the headline???
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.
Never even thought of this...just thought, why aren't we using the sun, and glad prices are coming down so that more of us can heat our water and make electricity ourselves.
When solar energy installations have payback periods close to two years, without the uncertainty of continued government subsidy, then you will see significant activity.
Again, the reason for my post...glad to see, according to this headline, things are changing, BECAUSE, I just can't imagine...even being a mean 'ol Republican (as "they" think we are)... not making good use of the wonderful sunshine we have here in CA and in FL and HI. It's just a sin that it's wasting away every day.
And, the REAL answer to my fake turf question, you neglected to comment on... THAT answer is that we have too many union members and illegals that need work maintaining our landscapes!
What you outline is sensible and what I think we’re moving towards.
I said NEARLY 100% ;-) where there’s a lot of sun. The sun is getting a bad rap with the skin cancer thang these days. I’m on the PR committee for LOVE THE SUN ;-) (I grew up in Minnesota...can yah tell? ;-)
That says a lot when you think about it. How long will you stay in your present home? If the payback period is too far down the road, you may not be there to enjoy it. I don't expect to stay in this same house more than 5 years, 6 tops. Possibly less if I decide to pursue a new career, or get transferred. Anything that doesn't present a positive cash flow for me within 2-3 years is a waste.
There's some kind of film that you can get that you apply to the windows. It's used in places like Arizona. I Googled and found ScotchTint.
On the lowend you are talking under 3KW, on the higher end probably up to 20KW.
I’m thinking about going solar a little bit at a time, along with a wind generator or two. I’m tired of high electric bills and power outages, but most of all, I hate relying on someone else.
Not only do you need to "buy" into whatever improvements you make, when it becomes time to sell, you will have to get the new buyers to "buy" into those same improvements.
If your solar energy system is dependent upon a bank of batteries, how would you convince the new buyer that the batteries are not on the brink of failure? The risk of such things will cause buyers to expect a discounted price.
I haven't read what the latest expectation is for hybrid car battery systems, but the usable lifetime of such systems plays a major role in the economics of owning such a car. Imagine how the resale of such a car might depend upon an assessment of remaining battery life.
One should be especially skeptical of developments which are so highly emotionally supported by the liberal establishment. These people want so much to believe in global warming as justification for central government control, and in alternative energy as justification for subsidizing its use, that one can barely discern the truth about these matters.
Doubling the price and then taxing the users on top of the price per KWH sounds like a good idea to you?
The solar power system should be valued at about the present value of future generation. You add that to the price of the house when you move. If the system was economical that value would exceed the initial investment. Of course that value is based on assumptions regarding the life of the system and future electric rates, so there is always lots of weasel room.
The solar power system should be valued at about the present value of future generation minus maintenance costs.
“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. “
Please find me a scenario where our need for energy levels off or the world suddenly starts working without energy sources.
It’s not at all a risky long-term investment to develop new sources of competitive energy. The risk, so to speak, is that anything that doesn’t pay off in a year or two won’t result in a promotion or job-hopping opportunity. As a result people chase what can pay now and miss what we desperately need to have ready for later.
How do you think we got into a situation where the crucial resources we need to drive our whole economy are in the hands of 8th-century fanatics who want us dead? Short-term tactical thinking. Pah.
If you have a sizable battery storage system at home, then you're probably talking about an off-grid location where there's no grid-tied option for the buyer. The solar power system would have definite value in the sale.
If you're grid-tied and you want the peace of mind of a back up system, then you're right that the battery system is not going to hold their full value. But a lot of things people put in their homes don't hold their value.
Your main point holds that for a grid-tied location, solar is not a good investment, especially if you carve out the govt handouts. But in certain sunny spots and in certain applications, the equation is getting more attractive. Especially for solar thermal, which is an efficient and trouble-free way to make hot water. Most of the energy in solar radiation is in the form of heat, not light, so this is an effective approach. They already payback in the 3-5 year range in most areas in this country, and with power prices increasing this payback period will shrink further. You're going to see a lot of these coming online. They have already in many parts of the world.
Have you heard of the idea of putting turbines along the highway that are turned by speeding cars. No EZ turf.
I'm not convinced that it is fully applicable to the sale of residential property. Consider that one generally does not recoup near the cost of a finished basement or add-on porch, even though those have value and generally hold that value for decades. I don't think that the cost of a solar power system would fare any better.
Now, if the system were small enough that it could be packed up and moved with me, that would be very positive. Of course, it would still have to pay for itself in just a few years IMHO.
Besides solar power is very green. It will not only increase the value of your house, it makes hippie chicks puddle. And who can put a dollar value on that.