When Will Solar Achieve Grid Parity? We're Already There!

I always chuckle when I read an article in the popular press — or a comment on this site — stating something like "Solar is too expensive and will never be a significant source of electric power." Invariably, these articles or comments are never documented to explain how the author reached this faulty opinion.

I believe that I will prove in this article that UNSUBSIDIZED solar is ALREADY at grid parity today against UNSUBSIDIZED "conventional" power sources. The word "parity" implies "equality," and therefore, the only fair comparison is one where ALL costs are taken into account.

As we all know, the primary sources of electric power in the US are coal, natural gas and nuclear, and it is to these three sources of power that I compare solar. We do obtain some power via hydroelectric sources and some biomass, wind and solar, but these are relatively small (but increasing quickly as to biomass, wind and solar). Here are some general comments about each of these power sources:

COAL

PROS — coal is widely available in the US and will continue to be available for decades to come; relatively inexpensive, although has doubled in price in the past year

CONS — the dirtiest source of power we have, with release of mercury, sulfur and nitrogen oxides, and a large amount of CO2 (double that of natural gas)

NATURAL GAS

PROS — also very abundant in the US and Canada, used to be very cheap, but has also doubled in price in the past couple of years, much cleaner than coal, releases ½ as much CO2 as coal

CONS -- still puts out a lot of CO2, price likely to rise substantially going forward

NUCLEAR

PROS — no CO2 production, uranium fuel is relatively inexpensive (even though it has gone up ten-fold in the past few years, it constitutes a relatively low percentage of the cost of operating a nuclear power plant)

CONS — very high capital cost to build, long lead times to build (close to a decade versus 1-2 years for coal or nat gas power plants), although plants are reputed (and probably are) much safer than they were 10-20 years ago, nuclear plants nevertheless present some risk of nuclear contamination (whether through natural causes or terrorism; nothing is fail-safe) that other power sources do not; and the disposal problem of spent nuclear fuel has not been solved

With the foregoing in mind, let me now make the case that if you were deciding today on which kind of "power plant" (the reason for the quotes will become obvious below) you were going to build tomorrow—and you were willing to consider ALL COSTS and NO SUBSIDIES — you would build a solar "power plant" (NOTE: I am aware that wind may be even cheaper than solar, but that would be the topic for a complete other article that someone should write; my goal here is solely to compare solar to the other three power sources noted above; I will say, very briefly and generally, that the choice of solar versus wind is probably a function of the meteorological conditions at the site of the solar panel or wind turbine, and the cost advantage will depend on how much sun versus how much wind the location gets).

To begin the comparison, let us look at what unsubsidized solar costs today. Last quarter, First Solar (FSLR) announced that its production cost was $1.12 per watt. I will guess that by the third or fourth quarter of this year (the soonest FSLR would provide panels for the imaginary "power plant" we're discussing), FSLR's cost would be well under a dollar. I believe that within a year or two, as polysilicon prices approach $50/kg and efficiencies routinely exceed 20%, other manufacturers will also achieve panel costs approaching $1/watt; obviously, disruptive technologies such as the one Nanosolar is rumored to have may drive the cost substantially under $1/watt). Many people estimate that balance-of-system costs would add another dollar, plus another dollar for installation and another for profit, for a total unsubsidized installed cost of $4/watt, or $4 million per megawatt. Let's add another dollar just to be conservative, and thus, a modest 275 megawatt solar "power plant" would cost a cool $1.4 billion to build.

$1.4 billion sounds like a big number, doesn't it?

Well, it does until you consider "FutureGen," an "almost-zero-emission" coal-fired power plant that was to be built in Illinois. The plant was designed to eliminate essentially all harmful emissions from the plant, including the capture and sequestration of the carbon dioxide. The plant was cancelled when estimated costs for a 275-megawatt plant increased to $1.8 billion. The background of the plant is interesting because the idea for this plant got off the ground ONLY because ¾ of the cost was going to be subsidized by the federal government. In other words, the private sector was only willing to put up $450 million to build the plant, while the taxpayers would foot the other $1.35 billion (it is true that foreign financial support was to offset a portion of DOE's cost-share, but that, of course, does not alter my thesis here which relates to total unsubsidized cost).

On Jan. 29, 2008, DOE pulled funding for the plant, essentially killing the project. Although some people argue that the funding was pulled for political reasons, it seems more logical that the cost of $6.55/watt was the real reason that this project was pulled.

The FutureGen project is clear proof that if we are going to compare apples-to-apples (ie, no harmful emissions from the coal-fired plant as is the case with solar power), coal-fired power plants are MORE expensive to build than solar is TODAY.

Four things make the above case even more compelling. First, it is not clear to me if 30 years of coal were included in the $1.8 billion price tag. I can assure you that I have included 30 years of "sunshine" in the solar project cost of $5/watt. If coal was not included, that would make the coal power plant even less competitive. Even if coal were included in the price tag, I would be interested to know what they estimated the price of coal would be in 10 years, 20 years or 30 years. I can easily tell you what the cost of the sunshine will be in the future (unless the government figures out how to tax us on "sunshine." LOL)

Second, the FutureGen project was a "demonstration project"—ie, we don't know if they could have even achieved the goals of near-zero-emissions for the $1.8 billion price tag. And of course, I don't know what "almost" zero emissions would actually be.

Third, it is likely that the cost of building coal, gas and nuclear power plants will INCREASE going forward, whereas it is almost guaranteed that the cost of building solar power "plants" will decrease.

Finally, it's not clear to me if distribution of the electricity was included in the $1.8 billion price tag. I suspect it was not. If it was not, you can add another hundred million (or even more) for distribution, depending of course on whether rights-of-way are available and what their cost is, distribution distance and power losses.

But for solar, in many cases, there will be very little if any "distribution" cost because solar power "plants" can be decentralized (thus, they are not really "power plants" at all—hence, the quotes in this article). Look at the 250-megawatt "power plant" that was announced on March 27, 2008, by Southern California Edison. SCE will lease 65 million square feet of roof area from owners of commercial buildings and install 1 megawatt per week (250 megawats over 5 years) of photovoltaic panels on those roofs at no cost to the property owners (on the contrary, these owners will collect rent for something they did not think had value—their roofs). The beauty of this plan is that it ALREADY uses existing "distribution" facilities by using the existing wires (that usually bring IN electricity) in reverse, sending power TO the grid when the solar panels are producing power.

Commenting on this project, Governor Schwarzenegger said: "These are the kinds of big ideas we need to meet California's long-term energy and climate change goals. I urge others to follow in their footsteps. If commercial buildings statewide partnered with utilities to put this solar technology on their rooftops, it would set off a huge wave of renewable energy growth."

John E. Bryson, Edison International chairman and CEO, said: "This project will turn two square miles of unused commercial rooftops into advanced solar generating stations. We hope to have the first solar rooftops in service by August. The sunlight power will be available to meet our largest challenge – peak load demands on the hottest days."

As it noted in its press release, SCE's renewable energy project "was prompted by recent advances in solar technology that reduce the cost of installed photovoltaic generation. When combined with the size of SCE's investment, the resulting costs per unit are projected to be half that of common photovoltaic installations in California."

Interestingly, SCE estimates the total project cost will be $875 million (in today's dollars), working out to $3.50/watt. This number is probably lower than my $5/watt estimate because I was trying to be conservative in my estimate (remember the extra dollar I added) and because anticipated price reductions during the 5-year life of this project will probably decrease the cost of the PV installation by 30-50%.

Much of what I said above regarding coal applies to natural gas-fired generation. Carbon capture and sequestration would probably push natural-gas power plant costs to the billion-dollar range, again making gas-fired plants less competitive than solar.

As to nuclear, capital and insurance costs are so high that none of these plants are ever built without significant governmental subsidies, and this is especially true as to spent-fuel-disposal costs (how much has Yucca Mountain costs taxpayers so far? How many more centuries will it take to complete? ANSWER: It will probably never be completed). In addition, lead times to build nuclear power plants are so long that by the time a nuclear plant that is planned today is actually producing electricity, solar-generated electricity will cost half of what it does today, putting the nail in the coffin of nuclear-powered electricity.

Finally, there is a lot of NIMBY (Not In My Back Yard) feeling these days vis-à-vis conventional power plants. Coal plants are almost impossible to get approved, and who wants to have a nuclear plant in their backyard? As the point of this article is better appreciated—that "alternative" energy sources should no longer be considered as "alternative"—NIMBYism against coal, gas and nuclear power plants will only grow.

So there you have it: Behind Door #1, you can pay $1.8 billion for a demonstration, coal-fired power plant that will "almost" eliminate all emissions (maybe, if it all works right), while behind Door #2, you can pay $875 million (UNsubsidized) for 250 megawatts of 100% clean solar power.

I know which door I would pick.

I dunno, but it sure seems to me like we have hit grid parity.

Given that this is an investment site, I have written two other articles that build on what I have said here. My second article ("Solar Power Will Be Transformational In The Next Decade") discusses what I think this means for the solar space in general, and in my third article ("TSL Is the Best Value In The Solar Space"), I have compared 11 solars and concluded that TSL is the best bargain today in that space.

DISCLOSURE: I own a large position in TSL, and a decent-sized position in STP. My CSIQ shares will be called away from me over this weekend since I sold $25 calls against my position about 3 weeks ago, but I may buy more CSIQ on a dip. I am not short or long any other stock.

Comments

[Solar Guy]

Right on Mr. Yetiv! After much due diligence on this subject, I came to the same conclusion. In fact, I am making a presentation to a local government agency tomorrow on a large solar initiative. I am in stealth mode on a start up company to build a solar power plant. Thanks for the endorsement!

[Andrew Ling]

The problem is you're assuming utilities care whether their energy generation is clean or not. It's unbelievable to me that energy companies besides BP haven't jumped all over technologies like solar. Big oil has the most to benefit from renewables since they get the bonus propaganda boost which the pure plays don't need. It's also the perfect marriage because big oil has nothing to invest in with little oil left to be discovered in the world. The most likely reason is that big oil has an aversion to renewables and an us vs them mentality.

[frflyer]

I knew in my gut that solar was cheaper when considering all the costs, both obvious and not so obvioius of fossil and nuclear power. Than you for ennumerating it for us.
I would be interested in what solar plant Solar Guy is talking about. Solar thermal? I wonder what kind of comparison solar thermal would make with conventional power. It would be centralized power, eventually needing upgrades or additions to the grid to distribute it, but for the time being, plants are being built near existing lines. The article in Scientific American Jan. 2008 shows what we could do with solar power plants, both solar thermal and concentrating PV systems.

Scientific American A Solar Grand Plan
www.sciam.com/article....


I like the ideas in this proposal, but would favor more emphasis on solar thermal, where as they emphasize PV plants. And their idea of using underground caverns filled with compressed air to store energy doesn't seem as good an idea as molten salt heat storage, which is to be used in a few plants already planned.

"Hamilton Sundstrand, a subsidiary of United Technologies Corp. [NYSE: UTX], and US Renewables Group have formed a new entity, SolarReserve, to commercialize the concentrated solar power tower technology and corresponding molten salt storage system developed by Rocketdyne. This renewable technology will enable utility-scale solar power generation. It is designed to meet a utility's needs with a single installation capable of producing up to 500 MW of peak power."

"Due to the unique ability of the product to store the energy it captures, this system will function like a conventional hydroelectric power plant, but with several advantages. We will have the capability to store the sun's energy and release it on demand. This product is more predictable than water reserves, the supply is free and inexhaustible, and the environmental impact is essentially zero."

"Hamilton Sundstrand's Rocketdyne segment will provide heat-resistant pumps and other equipment, as well as the expertise in handling and storing salt that has been heated to more than 1,050 degrees Fahrenheit. . . .
According to the company, molten salt loses only about 1% of its heat during a day, making it possible to store energy for long periods of time. The salt is a mixture of sodium and potassium nitrate."

Lee Bailey, managing director of US Renewables Group (USRG)

Go to Green Wombat for several stories about progress with solar thermal power plants
blogs.business2.com/gr.../

[Andrew Ling]

Governments are going the wrong route in subsidizing solar. The correct way to go is either subsidizing research directly or creating a government backed loan program. People don't want to pay $30K upfront for a PV system. Nor do they want to pay $20K up front with subsidies. Subsidizing research directly would maximize benefit to the public whereas finance subsidies would have a major impact on sales and maximize benefit to investors.

[tagthatstock]

solar too expensive?- well yes it is if you are investing the trndiy names like fslr,ldk, (heck name all of them) what do you suppose the google boys suggested to the boys at nanosolar to do with the google investment? i suspect they bought as many/much zinc contracts as possible------prolly a huge reason why nanosolar can 'moat' better in terms of pricing and ascetics of solar (the non bulky look,, and great for those of us in windy areas who dont want high insurance prem's for damaged solar panals)

anyway,, might want to start watching zinc stocks,, $0.99 is CHEAP, zinc 13.05 some goldbugs like MMG 2.00

i believe zinc is the next 'gold' it has more 'work' ahead of it than the shiny metal.

[Jack Yetiv]

To Solar Guy:

Not an "endorsement"... at all. I just call it as I see it!! But, nevertheless, I am glad that reality is meshing with your business plans!

To Mr. Ling:

Alas, I believe you missed the whole point of my article! Utilities DO NOT care about green-ness. They care about MONEY. SCE discovered, lo-and-behold, that going solar was going to be CHEAPER than going conventional. That is what is so interesting about this concept. Everyone is talking about "grid parity" happening in 2010, or 2012, but, in fact, we are THERE.

To Frflyer:

I believe that today, solar thermal (in a power plant) would probably be comparable in cost to PV because it cannot be decentralized and because there is already a lot of congestion on existing distribution lines. It would also take longer to deploy, and require a lot more permitting/regulatory hurdles.

However, solar thermal for your HOUSE or business is far more cost-effective TODAY than PV. I calculate that the payback on my home solar-thermal system (just for hot water, not space heating) will be about 7 years. My PV system was very expensive (includes 2 dual-axis trackers each carrying 18 200-watt panels), and payback on it will exceed 20 years. Of course, I did it to feel good, not as an investment.

However, in a few years, solar PV's payback will be under 10 years, and will be much closer to the payback on a solar thermal system for your house.

The Sci Am article is a great view into the future. The crux of my article, of course, is what can be done cost-effectively TODAY.

The storage idea will be critical a decade down the road when we want solar for more than load-balancing (ie, we want it to produce power even when the sun isn't shining), but for the next 10 years, solar PV will be perfect because it makes a lot of power at times of peak power use, and doesn't make any at night, when power is is much decreased.

Jack Yetiv

[User 169490]

I see a flaw that I didn't see accounted for. A 250 MW coal or gas fired power plant produces 250 MW's. A 250 MW solar plant only produces 250 MW when the sun shines just so. If you are comparing the two, it's strickly apples to oranges in favor of solar in the comparison. The solar plant is kaput at night and half kaput in most locations during the days. The others are generally up and running continually producing that power. Much of the costs for solar, gas and coal are fixed. The investment for solar is dead or degraded as far as producing power - most of the time. Not so for the other two.

[bobp2v]

Being new to this subject--how do you get 275MW at night and on really cloudy days?

[huangjin]

Interesting article, but T.J. Rodgers, founder & CEO of Cypress Semiconductor, which also owns the majority of SunPower, says that if he had the choice of everything, with no subsidies or government interference, he'd build nuclear.
tv.nationalreview.com/...=

[WinstonKotzan]

Interesting perspective, taking into account the environmental costs. However, what are the environmental costs of building a solar panel? What toxic substances are released from their production and disposal life cycle?

[nickgogerty]

Here is a spreadsheet tool for comparing fuel vs. power. might be interesting. It compares 20yr equivalent sources.

nickgogerty.typepad.co...

[Jack Yetiv]

To User 169490:

The solar plant generates power when it is needed--during the day and especially in the afternoon, when AC loads are highest in Southern California (SCE's service area). At night, we have FAR MORE generation capacity than we need. This is why I commented that storage will become an important issue in the next decade, but isn't now because solar can help with peak loads, which is where the grid is short. Please note that a lot of conventional power plants produce a small percentage of their rated power between 9PM and 6AM--so there you also have fixed costs and no production.

As to TJ Rodgers, did he do a cost comparison that INCLUDED the FULL costs of insurance AND disposal of spent nuclear fuel? How did he factor in the risk, small as it may be, of a Three Mile Island or a terrorist getting hold of nuclear fuel (raw or spent) to create a dirty bomb? Did he volunteer for the plant to be built in HIS back yard?

I highly doubt it.

In addition, does he know more than SCE, who actually is rolling out the program I discussed in my article?

As to the embodied energy in building solar panels--that might make a good other article, but what is the embodied cost of building a coal plant (making and transporting concrete, other building materials, etc) PLUS the embodied cost of mining the coal and delivering it to the plant, plus the embodied cost of building transmission lines to deliver the electricity?

The beauty of the SCE decentralized model is that much of what you would normally need to build is already built--the roofs, the wires to transport the electricity into the grid, etc.

I haven't studied it, but I'd be willing to wager that the embodied environmental cost of building panels is FAR less than a coal-powered plant. And those costs happen once in 30 years--whereas mining and transporting the coal for the plants will release CO2 EVERY day for those 30 years.

Finally, who ever heard of a "sunshine" miner dying in a "sunshine mine"? Coal miners, of course, die all the time.

Jack Yetiv

[VintonCounty]

Coal is the winner unless you shackle it with the requirement that the generator not emit CO2, also known as plant food. Why would anyone want to impose that restriction? The Nature Nazis say that manmade CO2 is making Earth warmer. That sounds desirable to me, but consider how the Nature Nazis reached their conclusion about man's effects on climate. They got it from inaccurate computer models. The models compute heat balances, and the associated temperatures, for particular places on Earth. Rate of energy inflow from the superhot sun is computed for an assumed Earth temperature; and also the rate of energy transfer from Earth to space (at nearly absolute zero temperature) is computed for the same assumed temperature. In the models, the correct temperature is the one for which rates of inflow and outflow are equal. The Nature Nazis worry about a temperature change of 1K over a century; so, to be useful, a model must be extremely accurate. No models now are even close to useful accuracy, and they won't attain it within current lifetimes. The punch line is that imposing a CO2 emission limit on coal-fired generators is completely arbitrary.

[WetWarrior]

The article and comments are thought provoking and (mostly) well-researched. But I haven't seen any (credible) information on the "refresh" cost for renewable energy (either solar or wind). I've investigated retail warranties on points-of-failure for solar and wind installs; five years seems to be the longest time frame for power-switching (from conventional grid to installed array) and -storage equipment. What is the length of time any given array remains viable? When do solar panels "wear out?" Wind generators are easier to factor because they have so many moving parts...but the durability of solar equipment remains a mystery (at least to me!).

[e-mail]

[Andrew Ling]

I understand your point Jack I've done the math myself numerous times. The problem is that the $1.8B coal plan is a one of a kind project. They can surely build "clean coal" plants for less if motivated or forced too. How much does a conventional coal plant cost to build?

At present time comparing conventional forms of generation with renewables is like apples to oranges. Either the apples (dirty fuels) need to be hindered so people choose oranges or the oranges (renewables) need to turn into apples by competing on cost alone regardless of emissions.

[TedSpick]

To: VintonCounty: The computer models provided by "nature Nazis" are only corroborative. The important science comes from measurements of global average temperature rise compared to measurements of CO2 increases in the atmosphere and the "fingerprints&quo... of Isotope ratios of radioactive carbon decreasing in the atmosphere because of the fossil fuel source. Time to wake up and stop tossing around false arguments against science.

[GlobalWarmingExaminer]

Nuclear is only expensive in this country due to the lawsuits. Serial lawsuits can effectively keep a nuclear plant from being built indefinitely without an act of congress.

France generates over 80% of their electricity from nuclear power. They have not only the lowest cost of electricity in Europe but also the cleanest air. They also recycle their nuclear fuel so they don't have a disposal problem.

[Jack Yetiv]

Well, one can decry the "nature Nazis" but the reality is that society (at least in the US) is clearly turning away from sources of power that generate electricity and generate mercury, nitogen and sulfur oxides, and CO2.

I, for one, have studied the science and believe global warming is for real, but whether you agree with that sort of doesn't matter: my article talks about "What it is" not "what it should be."

And in the current environment, in the real world, the environmental costs of building power plants are going to be more and more often taken into account, and this trend will only accelerate as PV becomes cheaper, which it will.

SCE could have tried to build a coal, nuclear or nat gas plant. It chose not to because it knew that it would be mired in regulatory hurdles on the first two--and probably couldn't get them off the bground even if it tried). As to nat gas, SCE probably decided the CO2 would still be an issue to deal with, plus nat gas is becoming very pricy.

So it decided, after taking everuthing into account, that solar would be easiest to get built, would be cost-effective and would earn it environmental plaudits

Jack Yetiv

[buyitcheap]

The other big issue is the loss of electricity in transmission - these solar plants, which I think is just fine, can't lose 10-12% of their electricity just because they need to send it down a wire - really big gains can be made in composites for a quick 10% increase in available electricity as wires get replaced.

[GeorgeJurgensen 01]

The difference is the solar plant will effectively generate at the nameplate capacity an average of 4 hours a day, maybe a bit more mounted on a rotating axis. Coal, Nuclear, and NG plants can operate very close to 24/7/365. Factor in storage costs, backup plant costs etc. to make a fair comparison, and don't forget the environmental costs of those back up supplies.

In short, your comparison compares solar peak output ratings with other plants peak power ratings. You should compare average power output which increases the cost of solar by a factor of 5 or 6. but does not change the cost of the other plants which produce continuously, approximately 101-102 weeks of every 104, and more for NG.

NG plants can also ramp up and down relatively quickly to meet variable demand.

[tuj]

I'm sorry buy you're completely wrong on the solar argument. Its not an apples to apples comparison with coal because coal provides FIRM power, solar does not. The cost differential on the open market between a firm and non-firm product is material, as well as the ancillary services related to having a coal plant (up/down reg, voltage reg). Solar has terrible density and high capital costs. Utilities would rather build combined-cycle units that burn nat. gas because the capital cost is much cheaper and the emissions, while not zero, are much less than coal.

Your argument that the 'distributed' nature of solar somehow eliminates the voltage and transmission constraints is misinformed. If you looked at the recent surge of wind generation in West Texas, you could see that the transmission problem is actually HUGE and causes massive congestion when the wind blows.

Instead, utilities will take that $1.8B and build 2GW of combined cycle plants that produce FIRM power and are eligible for ancillary services, rather than a pitiful 275MW of NON-FIRM power.

[Chris K]

While I really like and want to promote solar technology, this author is clueless as to how to do cost comparisons, and apparently about photovoltaic solar energy in general. Notwithstanding that his cost example for coal was for an overly expensive plant that was cancelled, his estimated cost for PV installations was half of what it actually is. According to www.solarbuzz.com/Modu..., PV panels are currently around $4.80/watt of output capacity (which is only about 1/4th of that if averaged over a day). That accounts for about 50% of the installed cost of a PV system. So, just for starters, the current installed cost of a PV system is around $9.60/watt. If we assume 6 sun-hours per day average [it depends in where you live], then we get a continuous output cost (for comparison with other power plants) of $38.40 per watt, or $38,400 per KWH of average generating capacity. That is what would need to be used for an "apples to apples" comparison of generating capacity.

The author appears to have not realized that the photovoltaic cells themselves are not the panels--there are extra costs to manufacture those, and to transport and market them (and profit), then they must be installed, and that takes a lot of labor as well as materials (including the inverter, cut-off, etc.), and the sun doesn't shine all the time. Efficiency also decreases over time, up to 20% in 20 years.

Without subsidies, PV is nowhere near on parity. Even with subsidies, it's typically still a little behind, but yes, costs should continue to go down. And there are other reasons to use solar--to help reduce CO2 emissions, to encourage this technology further, to help the grid at the point of peak demand, and to decentralize power generation. I'm personally planning on getting PV panels on my own house--maybe after the prices come down just a little more, combined with substantial subsidies in my state (CT), I would almost break even on the deal.

[zawy]

It has been clearly demonstrated and backed by FSLR comments that solar is not competitive with coal or nuclear until installation costs have reached $1.5/Wp. The biggest error in your article is that you seem to equate a solar Wp with watts. Over the 25 years or so for a solar system, there is only 6 kWh/day for each 1kWp installed in sunny locations whereas a coal or nuclear plant is producing 24kWh/day for each 1 kW installed. So first you need to multiply your solar costs by 4 to be comparable. Then consider nuclear plants last 40 years and cost about $3/W installed, which is 2 times cheaper than $1.5/Wp of a solar installation since
1W = 4 x 1Wp
In other words, you have to install 4 Wp of solar to get the same output of 1 W installed of coal or nuclear. Then consider nuclear lasts 60% longer. These advantages are offset by the fuel, disposal, regulatory, and maintenance costs of nuclear. In short, it has been well-documented that $1.5/Wp installed solar is equal to 5 cents/kWh in sunny locations and assuming 25 year lifespan and 5% loan on the capital costs. 5 cents/kWh is the same costs utilities get from coal and nuclear, using the same 5% loan scenario.

Coal puts out far more radiation than nuclear. Nuclear plants can be built in 4 years, at least outside of the U.S.

[Jack Yetiv]

I am struck by the commentary which spouts off the same aged information obtained from various sources but disregards the CURRENT information provided by SCE and DOE.

SCE said it was going to cost $875 million to install 275 megawatts--$3.50 per watt which INCLUDES panels, transportation, installation, etc. ALL IN. And I presume this includes PROFIT because I doubt that SCE is going to get this done by non-for-profit companies. If some commenter knows better than SCE what SCE's cost will be, please tell me.

DOE said the Future Gen plant was going to cost $1.8 billion. If you know better than DOE--who was going to pay 3/4 of the project--then tell me that too.

As to the comments that I apparently don't know that the sun does not shine 24 hours, let me give you some information. My dual-tracker system produces power about 10-14 hours per day in the summer in Northern Nevada, most of it at peak power production--and during the season of the year when peak loads are encountered.

But more importantly, we DO NOT NEED plants that make power from 9PM to 6AM, so the fact that a nat gas or coal plant can do so is IRRELEVANT TODAY. Many nat gas and coal plants power down at night.

In 10 years, it WILL be HIGHLY relevant, but it is not today.

To Tuj:

Your comments about wind distribution costs are correct. Alas, my article was about solar per the SCE model, not wind in west Texas.

To Chris K:

If you have a better number for building an emission-free coal or nat gas plant, please send me the link. You won't be able to do so because it does not exist.

Also, if we're not at parity, what is YOUR explanation for why SCE decided to install 275MW of solar rather than coal or nat gas?

To Zawy:

FSLR has said what it said because it did not take the environmental costs into account because if it had done so, it would get the kind of comments you read above. Once society starts valuing those environmental costs, FSLR will be able to start talking about all costs. But it can't lead on the issue.

Please provide me data showing that nat gas or coal plants produce power 24 hrs a day. I will bet that the vast majority DO NOT, and I will bet you the average for coal plants is no more than 15-16 hrs per day and for nat gas, probably 12, maybe 13-14, because nat gas is (today) more expensive.

As to nuclear building outside the US--that has nothing to do with my article, which was focused ON the US. In this country, you would be lucky to get a nuclear plant going in 10 years. And whether we like it or not, that's reality.

Jack

[VintonCounty]

To Tedspick:
I had two reasons for saying the Nature Nazis depend on computer models:
1. Data are quite inadequate to demonstrate human effects on climate.
2. Without a model you don't know the temperature effect of a change in CO2 concentration. I'll make just two comments on data.

First is that accuracy is mostly terrible, and conflicting concllusions are drawn from data. Consider correlations of CO2 concentration (from ice cores) and temperature (from unreliable indirect values). Some see a correlation and say it supports the claim that increasing CO2 concentration causes increasing temperature. Others say the correlation is better with a time lag (T effect trails), supporting the view that temperature changes cause the CO2 changes.

The other data comment is that accuracy for the last century is inadequate to support the associated claims. To detect a temperature drift of 1K/century, which the Nature Nazis claim, requires an extraordinary temperature measurement program (which did not exist). It gets worse. To detect a correlation with temperature over that 100 years requires far better accuracy, which is totally infeasible. An example of what may charitably be called inaccurate data is a comparison of surface and air temperatures. Over about the last 50 years the surface temperatures have increased, but not air temperatures (according to measured values). That is a problem for the Nature Nazis, because the greenhouse mechanism predicts the air will warm before the surface.

To Yetiv:
Concentrations of Hg and S in coal combustion products can be greatly reduced with "scrubbers." It's expensive, but much cheaper than removing and disposing of CO2. So, to a first approximation, coal is the cheapest way to make electrical energy in absence of onerous CO2 regulation.

The result of a scientific study is a conclusion, not a belief. Believing pertains to religion. You may have "studied the science", but it did not influence your attitude.

You emphasize that SCE chose PV generation. I'll comment. Regulated utilities typically must get approval for any major capital expenditure from a state utility commission. Along with the approval, the commission promises to allow electric rates sufficient for a guaranteed return on invested capital (ROIC). If the CA commission approved PV (which surely it did), SCE would not care whether PV is cost-competitive. So SCE's choice might only indicate CA goofiness.

To all:
This discussion has two ethical questions hiding in plain view.

1. Is government justified in forcing us to use a particular type of electrical power generation? The Declaration of Independence and the U.S. Constitution both say the national government cannot impose such political choices on us. Congress routinely ignores those stuffy documents, of course. Those who care about this should understand how things work. The subsidy on PV generation, for example, is, I think, a production tax credit. A production tax credit may not literally be a subsidy, but it distorts the market like one. Also, Congress tends to use sneaky methods. If there are choices A and B, and Congress wants us to use A; it may achieve that result by imposing burdens on use of B. Taxing CO2 emissions, if it happens, would be such a burden.

2. Is it moral to advocate (mandatory) government actions that make Americans less prosperous? Friends of farmers recently did that by mandating use of ethanol in motor fuels and precluding any source but American corn. The propaganda drums are beating to change American opinions about electrical energy, so be alert.

[tuj]

Jack: You continue to neglect the fact that solar is non-firm power. Granted, it does have the advantage of being coincident with peak loads, but ultimately when a generation portfolio exceeds 20% non-firm power, it leads to massive problems in regulating the ACE. Unless you propose building massive storage facilities, which are of equally massive cost, renewables cannot comprise the bulk of our power needs.

[Bill Hewitt]

Great article. You hit that ball right out of the park. Thanks.

[GeorgeJurgensen 01]

It doesn't matter when "you say" we need power, the solar plant does not generate power at its rated capacity, but only 1/5 to 1/6 of that amount. I'll concede you may ignore availability and storage issues at this stage. However you should compare actual generation not peak capacities.

[Jack Yetiv]

OK. So both Tuj and Mr. Jurgensen concede that today, because solar is such a small percentage of the generation portfolio in the US (approx. 1%), the fact that it does not produce all day is irrelevant.

Cool.

That's all I was saying in my article. So we are in agreement.

I believe (as I stated in the article or in my comments) that once solar is over 10% of the generation portfolio), my math doesn't work.

BUT BY THEN, SOLAR WILL BE LESS THAN 1/2 OF ITS CURRENT COST, IF NOT LESS, WHEREAS NAT GAS AND COAL WILL HAVE GONE UP.

SO I WILL BE IN 5 YEARS, SOLAR WILL STILL BE CHEAPER!

Jack

[tuj]

Perhaps you do not fully understand how the electric grid works. Supply and demand must be balanced. Any difference is the ACE (Area Control Error). Ideally this is always zero.

So lets say the sun suddenly stops shining, or the wind stops blowing. The ACE swings negative because demand remains constant, and other power must be put into the system, or there will be blackouts. That power must be FIRM and SPINNING, meaning that is reliable power, and its quickly available (within 5-minutes). Its also has to be quickly responding power. Nukes don't work for this, because they do not change their generation quickly. Some coal plants can do it, and combined-cycle and combustion turbines are excellent. Pumped storage also works.

So like I said, unless you have a massive increase in storage, you're going to need coal or gas-fired units online all the time. And like I said, when you exceed 20% of the total generation as non-firm power, you create huge problems trying to balance the grid. It can tolerate a 1GW swing, but not a whole lot more.

[tuj]

I am not saying solar isn't relevant, but I am trying to say that there is a maximum practical limit to its penetration in the energy market. That limit applies to all forms of non-firm power.

You also assume that integrating solar power into the grid is non-trivial, which it is not! Injecting power to the grid requires a transformation to AC power, as well as phase regulation and synchronization with the grid. This requires control electronics, transformers, etc. The distribution problem or 'micro-scale' power concept has not yet been solved, and it is likely that appropriate control electronics will keep solar penetration constrained to either DC applications or large installations.

[zawy]

Jack, I got lucky and found a reference. It says coal operates at 71% of capacity and nuclear operates at 90%. 71% of 24 = 17 hours, almost 3 times more than solar cells in a 6 kWh/d/m^2 area.

www.geo-energy.org/pub...

[Jack Yetiv]

Tuj, you and I do not disagree, so I don't know why you don't think I understand power generation. You said:

"I am not saying solar isn't relevant, but I am trying to say that there is a maximum practical limit to its penetration in the energy market. That limit applies to all forms of non-firm power."

I COMPLETELY AGREE.

But at 1% of overall power generation, solar isn't even close to the limit. You must agree with that.

Also, you are mistaken that "Injecting power to the grid requires a transformation to AC power"--as if that is some power plant requirement. The inverter--which is an essential component of almost all solar PV systems--already does that. And in fact, it does it so well that the solar power is indistinguishable in wave form (both phase regulation and synchronization) from the power already on the grid.

SO THERE IN NO NEED FOR ADDITIONAL "control electronics, transformers, etc".

To zawy:

Your aticle is a good find--coal 71%, solar, 24-33%, nat gas 30-35.

Coal only runs a little over twice as much (not 4) as solar, and nat gas (because it is far more expensive) is run just a little more than solar. In many areas, they use nat gas for "peaker plants" because as Tuj points out, nat gas can get spinning very quickly and can up and down-regulate in real time. Those plants sit idle much of the time--just like solar will until we solve the storage problem.

Jack

[Jack Yetiv]

Another $1.8 billion price tag for a supposedly clean-coal plant that will supply LESS peak power than SCE's plan at more than twice the cost.

www.kansascity.com/279...

Jack

[zawy]

Jack, stop fudging everything! 24*0.71/6= 2.666 so solar is "almost 3" and not "a little over 2" times more expensive per W installed than for coal. The real competitor that investors should be interested in is nuclear which is 24*.9/6= 3.6 times more nuclear energy per W installed over solar W installed.

[Mikmac]

Yea lets look at nuclear. We will just let our children and there children worry about the, so far beyond what should be called toxic, waste that will be created. Do some research on the waste facility out west the government built that was so poorly done that it is in danger of irradicating the most upper part of the northwest United States if it breaches into the river there.


On Apr 24 08:11 AM zawy wrote:

> Jack, stop fudging everything! 24*0.71/6= 2.666 so solar is "almost
> 3" and not "a little over 2" times more expensive per W installed
> than for coal. The real competitor that investors should be interested
> in is nuclear which is 24*.9/6= 3.6 times more nuclear energy per
> W installed over solar W installed.

[Jack Yetiv]

Zawy, where do you live? I'll let the NRC know you would like a nuclear power plant in your back yard, and that you have the bankroll to insure the plant and to dispose of the spent fuel. Also, long before your nuc plant makes ONE KWH, solar will sell for less than HALF its present cost.

I did NOT fudge the numbers. I used the percentages in the article you found.

Besides, Zawy, regardless of our present opinions about nuclear (pro or con), the reality is that these plants will be very difficult if not impossible to build in this country.

We're not France.

Jack

[Solar Guy]

Jack, thank you for the time you've invested in responding to all the people in this article. Very educational for us all as this is what I consider the most important issue of our time (followed closely by availability of clean water), and as a society we have to make the right decisions for the future of our children and the planet. You've done us all a great service as this is a hot button, emotional issue with a lot of different opinions. I will be using a lot of this content for economics of solar in my presentation to a local utility company soon. They are in a quandary about which direction to go with a new power plant to meet growing power needs, and afraid Governor Crist will veto both coal and nuclear options. The SCE decision to go solar makes a compelling business case and is clearly a testimonial on the future energy generation choice for our country.

Keep up the good fight, and May God Bless You!

[Jack Yetiv]

Despite four long articles this week, I have only written a small percentage of my thoughts on the topic. One area I did not get into but something to keep in mind is this:

If SCE was going to build a 275 MW nuclear plant, the first KWH would come out in 10 years--if at all. If it was going to be a coal plant--probably 3-4 years (if at all) depending on how long of a delay was caused by the environmental/legal challenges. Nat gas plant, maybe 2-3 years, agains depending on legal challeneges.

And these times frames ALL ASSUME that there are existing distribution lines with capapcity to carry the 275 megawatts. If there are not, add more time and money.

Now, look at SCE's plan for distributed solar. They are going to be installing 1 MW per week, starting in Aug, FIVE MONTHS after deciding to go this route. That means the first KWH's out of SCE's "power plant" will begin flowing in 5 months after project launch, giving the utility a very quick return on its investment.

Also, keep in mind that the conventional plants require the FULL dollar investment to be paid before the first dollar of return. On the other hand, for SCE, they can spend $3.5 million for their first megawatt of installation (plus probably $10-20 million for planning the project), and they immediately get a return--and the grid gets electricity sooner, as well

Finally, if your wind resource is good where you are and there are distribution lines available, wind turbines will be cheaper today. But I suspect that within a year or two, that will no longer be the case.

Jack Yetiv

[Solar Guy]

Good supporting economic analysis and puts it in context. Thanks Jack!

[John FRobbins]

Mr. Yetiv,

Your analysis is really good in some respects, and you make
many excellent points, but I hope you'll consider some of my amendments to your presentation. I agree that we need to think more straight and logically about all our options. Too much uneducated advocacy and self-serving commercial marketing mixing into too many of our current energy discussions. I offer 3 amendments:

1) $4/watt for PV is ONLY THE PV generators, not the installation
labor, racks, wires, controls, switches, grounding or any of the other
typical stuff which raises almost all "decentralized&qu... (home or small biz
scale) PV projects to $8 to $12 per watt. On the other hand, your pricing of coal powerplants includes not just the coal-fired generator, but all the labor, controls, wires, switches, etc., which are associated with the powerplant's construction. I don't say any of this to dissuade about solar or favor more coal, just to keep the pricing discussion apples to apples.

2) Your $/watt examples don't include any of what Amory Lovins would call "negawatts", in that it's widely accepted that the $/watt of building any kind of new power capacity is almost always more than the $/watt of freeing up inefficient or wasted power by conservation or efficiency. For instance, replacing a 100w bulb with a 25w CFL frees up watts at about 1% of the cost of PV to generate new watts. I replaced my desktop computers with
notebooks in prep for converting my office to PVs back in 2000, doing that because the cost per watt of freeing up negawatts via the computer conversion was lower than my solar cost/watt.

HOMEPOWER magazine has addressed this many times, encouraging
PV advocates to implement much grander-scale efficiency when considering PVs because most of our current "appreciation&quo... for efficiency economics is based on expectation of way cheaper energy than PV. Certainly, we should also think like this with conventional energy, since the CFL $/watt is also cheaper than the coal $/watt. It's why we should phase out incandescent bulbs in most applications. Again, I don't say this to discourage PV, just to keep this discussion fair and logical. Power supplied must exceed power needed. It's an equation with variables on both sides of the equal sign.

3) You make PV sound like it is equal to coal, nuke and ngas
generation in all respects. But a Westinghouse power engineer wrote an op-ed last year (I think in Transmission & Distribution magazine) where he tried to encourage energy engineers to educate politicians that all sources of power ARE NOT EQUAL. He said he was writing his op-ed because so many politicians were jumping on the "renewables portfolio" bandwagon, as when states mandate a certain % of renewables in the grid power mix. He went on to explain how various powerplants are different.

A nuke or coal-fired plant is likely on 24-7. It takes days to cycle down and back up a nuke, as much as 10-14 hrs for a coal plant, so these are commonly "baseload" generators left on most of the time. A ngas plant is likely turned on and off frequently, commonly used to handle short-term peaks in electric demand, since a ngas turbine can be cycled down and back up in abt a half hour. On the other hand, PVs only generate when the sun is shining. Even in southern Arizona, even using a tracking array, that's only half the typical day or year, at best. In the Ohio Valley where I live and work, it's maybe 20% or 25% in the best case, since we have abt 50% cloudiness. Since the advertised "watts" on PVs is typically the "peak output", not the average output which might be two-thirds or three-fourths of peak, the real expected utilitization factor for PV is typically down in the teens%. By utilization factor, I mean: what is the typical expected output of the generator compared with its rating x 24 hr/day x 365 days per year? For
a coal plant, it's often 80% or so, 5 times typical PV in the Ohio Valley. I'm talking about grid-tied PVs without batteries, not the older-style setup as I have for my office, with batteries for backup, with NO GRID BACKUP. Batteries add 20-25% higher cost to PV systems, but if you are using the electric grid for backup instead of batteries in my often cloudy region, it's only fair to add the cost of the electric grid to the cost of your PVs! That can make the real cost of grid-tied PV more than the cost of either PVs with batteries or just the conventional grid.

Again, I don't say this to discourage PVs. I have and rely on them myself, design systems for my clients. I say this to keep the discussion honest and fair.

4) Finally, I think consumers must learn that their power costs will continue to rise, regardless of how it's generated. Sure, the cost of PVs has been dropping, but the labor and materials associated with installations is growing very fast. Just look at the price of copper wire! Or technical labor! This is my 25th year as a home designer and energy consultant. Whether done by DIYers or professionals, I'm not seeing PV system prices at the consumer level going down in real terms. Even where subsidied, PVs are very expensive.

I made my system cost more affordable, cutting total conversion costs by 50% or so, by (1) reducing the amount of power I needed in my office and (2) installing it myself. Neither hurt my work proficiency. In fact, it made me a better designer and consultant. I've operated my off-grid office since November 2001.

I recommend to anybody interested in understanding these issues to buy, install and operate at least a small system themselves. Consider it a great learning opportunity! Might also become a great job opportunity, we certainly need more consumer-level energy expertise in this nation!

John F Robbins CEM CSDP
859-363-0376
johnfrobbins@insightbb...
johnfrobbins.com
MorningView, KY 41063-8748

[frflyer]

Solar power plants in the southwest deserts would put out power far more than 4 hours a day.
And solar thermal can store heat to generate at night. We will need more off peak electricity, for charging electric and plug in hybrid cars. As the grid is cleaned up and beefed up, electrics and plug in hybrids will make more and more sense.

"Ausra is developing thermal energy storage systems which can store enough heat to run the power plant for up to 20 hours during dark or cloudy periods."

"All of America's needs for electric power – the entire US grid, night and day – can be generated with Ausra's current technology using a square parcel of land 92 miles on a side. For comparison, this is less than 1% of America's deserts, less land than currently in use in the U.S. for coal mines."

I agree with the need for distributed energy through PV solar etc., but solar plants in the southwest can play a big part also. California has 355 megawatts coming from small pilot solar thermal plants in the Mojave desert. They were built in the 80s and early 90s.

Ausra is building a factory in Nevada to mass produce components. And they are building a 175 megawatt plant near San Luis Obispo.

Schott is building a plant to produce solar "receivers" for thermal plants.

Brightsource just signed to build 900 megawatts of solar thermal plants in the Mojave.

"Utility giant FPL has filed plans with California regulators to build a $1 billion, 250-megawatt solar power plant in the Mojave Desert.
FPL tends to be tight-lipped about its plans but in a recent interview with Green Wombat, FPL Energy senior vice president Michael O’Sullivan acknowledged the company is bidding on contracts with utilities throughout the Southwest."

"Hamilton Sundstrand, a subsidiary of United Technologies Corp. [NYSE: UTX], and US Renewables Group have formed a new entity, SolarReserve, to commercialize the concentrated solar power tower technology and corresponding molten salt storage system developed by Rocketdyne. This renewable technology will enable utility-scale solar power generation. It is designed to meet a utility's needs with a single installation capable of producing up to 500 MW of peak power.
We will have the capability to store the sun's energy and release it on demand. This product (molten salt) is more predictable than water reserves, the supply is free and inexhaustible, and the environmental impact is essentially zero."
from Green Wombat

Abengoa Solar's 280 MW parabolic trough project with 6-hour molten salt storage for the investor-owned utility Arizona Public Service will be designed to supply the late afternoon and evening electric load of the Arizona summer.

Two larger plants have been approved for the Mojave Desert at 355 and 500 megawatts.

Google has funded, start up solar thermal company, eSolar.

It's already happening. They need tax credits, so they can attract investors, in order to scale up their operations.

Why is everyone worried about the intermittency of solar and wind?

"There are areas in Denmark and Germany who use more than 40 percent of their electricity from wind. From what I have read, they are less concerned about the intermittency than we are in the United States even though we aren't at 1 pecent yet. Why? Because we are told by the fossil fuel guys, hey, can't use wind, can't use solar, what about the intermittency. If wind gets up to 40 percent of the electricity we use and solar gets up to 40 of the electricity we use, the other percents of electricity we need can be made up from the fossil fuel plants that are still there. If they are run less at full power, they can last a long time. That can be your electricity `battery.'"

gristmill.grist.org/st...