Solar Electricity as Cheap as Coal Electricity

Photon Consulting has issued a report claiming that, by 2020,

by 2010, the cost of solar will be below the price of grid electricity for at least 50 percent of OECD residential demand, equivalent to around 1,500 GW of solar power. This is much larger than the 15 GW of cell/module production PHOTON Consulting anticipates for 2010

Photon’s analysis is that solar is, at a true cost of under 25 cents / kwh, competitive in high price electricity markets.  Photon seeks solar at “10¢ to 15¢ per kWh by 2010″.

In 2006, the production of solar electricity from a typical 4 kilowatt (kW) rooftop system in Germany cost 30 cents per kWh, in Spain it was 19 cents, and in California it was 22 cents. By 2010, Photon Consulting estimates that solar electricity will be produced for 18 cents in Southern Germany, 12 cents per (kWh) in Spain, and 13 cents in California.

Photon sees a 20+ % reduction in production costs for solar PV systems over the next three years.

2 responses to “Solar Electricity as Cheap as Coal Electricity

  1. Including the fuel surcharge, my primarily coal-generated kWh charge is 8.4c/kWh from AEP/SWEPCO.

    I used 36,600 kWh of energy last year. At 40% thermal efficiency (quoted here), one ton of coal produces 2460 kWh of electricity, so my house was responsible for 14.87 tons of coal being consumed. At 2.6 tons of CO2 per ton of coal, that means my house is responsible for roughly 38.6 tons of CO2.

    With a carbon tax of $20 per ton of CO2, that comes to an additional $771.40 per year of carbon taxes. Divided into 36,660 kWh, that raises my bill by 2.1 cents per kWh, to 10.5c/kWh.

    Even with the carbon tax at $20/ton, it’s a net fiscal wash, assuming no hiccups in solar development and realization of an optimistic prediction. As an aside, a projection about solar with a company with the word “Photon” in the title should raise flags, as should a projection about coal from a company with the world “Bitumen” in the name.

    Solar still has a long way to go. And talk about illustrating the effectiveness of low-cost alternatives to solar and wind…makes a bit less enthusiastic about making the switch.

  2. Darren,

    Actually, we’re in agreement in many ways. I posted this when I meant to save as a draft.

    I am, as well, skeptical of this. Like your point about Photon. For me, it was a pricing issue. I had not included in much of my skepticism, such as that 10-15cents is not as cheap as coal electricity for much of the United States, at least.

    Re you calculation, believe that you are somewhat optimistic about the CO2 footprint. The 40% thermal efficiency is at the origin, but does not account for the roughly seven percent (nationwide average, as I recall) transmission loss and other inefficiencies related to getting the electricity to the home.

    Thank you for the substance of your post/add to this.

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